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The Strategy Management Office (SMO), also referred sometimes as the Office of Strategy Management (OSM), is the team responsible for managing the Corporate Strategy of the organization.
The ultimate role to execute Strategy lies with the line managers and employees, but without a core command and coordination office (i.e. the SMO), Strategy is either skipped from key processes or the processes are ineffectual across business units, causing poor Strategy execution.
This presentation is the second in a series of 3. It dives deep into the 9 cross-functional processes that should be run by the Strategy Management Office. These are split into 3 categories:
>> CORE PROCESSES
1. Scorecard Management
2. Organization Alignment
3. Strategy Review
>> DESIRABLE PROCESSES
4. Strategic Planning
5. Strategy Communication
6. Initiative Management
>> INTEGRATIVE PROCESSES
7. Planning/Budgeting
8. Workforce Alignment
9. Best Practice Sharing
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SMO Series: Strategy Management Processes
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Framework Primer
SMO Series: Strategy Management
Processes
Presentation created by
Scorecard
Manageme
nt
Organizatio
n Alignment
Strategy
Reviews
Best
Practice
Sharing
Strategic
Planning
Workforce
Alignment
Strategy
Communi-
cation
Initiative
Manageme
nt
Planning/
Budgeting
Strategy
Management
1
2
3
4
5
67
8
9
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Contents
Overview
SMO Overview
Core Strategic Management Processes
Templates
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This presentation dives into the 9 cross-functional processes run by the
Strategic Management Office
Presentation Overview
There are reported Strategy implementation failure rates that hover around 60-90%—
companies set Strategic Plans with specific targets but few achieve them.
The Strategy Management Office (SMO), also referred sometimes as the Office of Strategy
Management (OSM), is the team responsible for managing the Corporate Strategy of the
organization.
The ultimate role to execute Strategy lies with the line managers and employees, but without a
core command and coordination office (i.e. the SMO), Strategy is either skipped from key
processes or the processes are ineffectual across business units, causing poor Strategy
execution.
This presentation is the second in a series of 3. It dives deep into the 9 cross-functional
processes that should be run by the Strategy Management Office. These are split into 3
categories:
CORE PROCESSES
Scorecard Management
Organization Alignment
Strategy Review
This deck also includes for you to use in your own business presentations.
1
2
3
DESIRABLE PROCESSES
Strategic Planning
Strategy Communication
Initiative Management
INTEGRATIVE PROCESSES
Planning/Budgeting
Workforce Alignment
Best Practice Sharing
4
5
6
7
8
9
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Contents
Overview
SMO Overview
Core Strategic Management Processes
Templates
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There are 9 cross-functional processes that should be run by the Strategy
Management Office
SMO Overview – 9 Key Strategy Management Processes
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There are 9 key Strategy Management Processes, categorized under 3 groups:
Scorecard
Management
Organization
Alignment
Strategy
Reviews
Best Practice
Sharing
Strategic
Planning
Workforce
Alignment
Strategy
Communi-
cation
Initiative
Management
Planning/
Budgeting
Strategy
Management
1
2
3
4
5
67
8
9
Desirable
SMO
Processes
Integrative
Processes
Core Processes
Source: Creating the Office of Strategy Management, Kaplan, Norton, 2005
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The desirable SMO processes already exist—by increasing the role of the
SMO, these processes become more tightly linked to Strategy execution
SMO Overview – Roles and Responsibilities
The Integrative Processes are those that are run by the senior management whereas the
SMO integrates Strategy for these processes.
The Desirable SMO processes are performed by existing organizational units. These processes should eventually be incorporated
into a central organization with strategic focus. The integrative processes fall under the natural domain of other functions where
the SMO plays a coordinating role, ensuring that the processes are closely incorporated with the enterprise Strategy.
The chart believe delineates whether SMO should or should not run each of the 9 key Strategy Management processes.
Source: Creating the Office of Strategy Management, Kaplan, Norton, 2005
Scorecard Management – Design and report on the BSC measures
2 Organization Alignment – Ensure all business and support units are aligned with the strategy
1
3 Strategy Reviews – Shape the agenda for management strategy review and learning meetings
Strategic Planning – Help the CEO and executive team formulate and adapt the strategy
5 Strategy Communication – Communicate and educate employees about the strategy
4
6 Initiative Management – Identify and oversee management of strategic initiatives
Planning/Budgeting – Link financial, human resources, information technology, and marketing
to strategy
8 Workforce Alignment – Ensure all employee’s goals, incentives and development plans link
to strategy
7
9 Best Practice sharing – Facilitate a process to identify and share best practices
Strategy Management Process SMO Role
CFO, HRO,
CIO, CMO
HRO
CKO
Key
SMO must run the process
SMO should run the process
X SMO integrates strategy to a
process run by someone else (X)
CFO: Chief Financial Officer
HRO: Human Resource Officer
CIO: Chief Information Officer
CMO: Chief Marketing Officer
CKO: Chief Knowledge Officer
Core
Roles
Desirable
Roles
Inte-
grative
Roles
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The Strategy Management Office has a pivotal role in achieving integration
and alignment
SMO Overview – Strategy Integration and Alignment
Due to SMO’s coordination, previously incongruent, disarranged, or missing management
processes are performed in an integrated fashion to deliver tangible results.
The SMO is responsible to ensure that all management processes are cohesive and are in perfect alignment
with the Strategy.
Enterprise strategy
planning
Organization
planning
Strategic manage-
ment process
Management
control & learning
Workforce
planning
CEO/Executive Team
Annual Cycle
Q2 Q3 Q4
Financial planning
Planning/Budgeting
Budgets
Plans
Initiatives
Finance
IT
HR
Employee alignment
Personal goals
Employee incentives
Personal development
Develop business and support unit scorecards
Align the organization
Corporate and business units aligned
Business and support units aligned
Board of Directors aligned
Q1
Strategy reviews
Initiative management
Best practice sharing
Strategy communication
Review and update strategy
Clarify vision
Develop the corporate scorecard/ strategy
map
Define corporate strategy
BSC Team Projects
LOB Leaders
Support Unit Leaders
CFO, HRO, CIO, CMO
HR
Chief Knowledge Officer
Corporate
Communication
4
1
2
1
7
8
3
6
9
5
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Contents
Overview
SMO Overview
Core Strategic Management Processes
Templates
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OVERVIEW
The SMO facilitates in translating the updated Strategy into the
scorecard map and objectives during the annual Strategy meeting
Core SMO Process – Scorecard Management
The SMO in coordination with the internal audit department ensures the authenticity and
consistency of the data reporting processes.
ROLE
The responsibilities of the SMO during the Scorecard Management process entail:
Lead the discussion about whether the executive team wants to change any BSC measures.
Upon approval of the yearly objectives and measures, the SMO coaches the executive team in identifying strategic
initiatives required to achieve targeted performance on the BSC measures.
Conduct trainings on the BSC management system during the year, and serve as the central organizational
resource to educate, coach, and support local project leaders about the BSC methodology and tools.
Appoint the metric owners and people that collect and report the data with the desired frequency, and oversee the
process of data collection and reporting.
Select the BSC software system to draw information automatically from data warehouses.
Standardize Balanced Scorecard terminology and measurement definitions across the organization.
Operating managers tend to skew the data to report a better outlook of the effectiveness of their short-term
initiatives and results, the SMO is primarily responsible for the integrity of the reported BSC data.
The organizational Balanced Scorecard is inherently owned by the SMO, which has a significant role
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OVERVIEW
The SMO assists the organization in developing a consistent view of
Strategy—e.g. the identification & realization of corporate synergies
Core SMO Process – Organization Alignment
Organizational alignment is typically not managed as a process, the SMO enables the
development and communication of Balanced Scorecards across the entire organizational
ladder.
The SMO is responsible for the following tasks during the organizational alignment process:
Defining, on the corporate scorecard, the synergies to be created through cross-business behavior at lower
organization levels
Linking business unit strategies and scorecards to Corporate Strategy
Linking support unit strategies and scorecards to business unit and corporate strategic objectives.
Linking external partners, such as customers, suppliers, joint ventures, and the board of directors, to the
organization’s Strategy
Organizing the executive leadership team’s review and approval process of the scorecards produced by the
business units, support units, and external partners.
ROLE
Realizing organizational alignment is the key discriminator between successful and unsuccessful
implementers of the Balanced Scorecard. This helps creates focus and coordination between
complex business units.
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OVERVIEW
Strategy Review meetings are essential to evaluate the Balanced
Scorecard and outcomes of Strategy
Core SMO Process – Strategy Reviews
The SMO has a pivotal role in the Strategy Review process—from updating the top
management, to monitoring progress on plans, to setting agenda for the meetings.
The roles and responsibilities of the SMO during the Strategy Reviews process are:
To brief the CEO, in advance of the Strategy review management meetings, about strategic issues identified in the
latest Balanced Scorecard.
– The briefing shapes the agenda of the meeting so that the focus remains on Strategy review and learning,
rather than just on short-term financial performance and fire-fighting.
To observe the meeting and determine the action plans.
To follow up after the meeting to ensure the implementation of action plans.
As the Board of Directors plays a critical part in analyzing and directing the Strategy, the SMO with the assistance
from the Chief Financial Officer prepares information briefs and agenda for board meetings.
ROLE
The monthly management meeting provides the basis for overseeing the Strategy Management
process. It provides a way to review Balanced Scorecard performance and tweak strategic
interventions. The process also entails underlying hypotheses testing, learning, and commencement
of new initiatives.
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OVERVIEW
Strategy is not an annual event—we should constantly communicate,
test, and modify the formulated Strategy to gather concrete feedback
Desirable SMO Process – Strategy Planning
The BSC data should be regularly discussed by the executive team at management
meetings—Strategy needs to be modified if the hypotheses are found invalid.
The following are the key roles and responsibilities during the Strategy Planning process:
The SMO should gather and scrutinize the strategies that arise internally from the organization so that the
executive team can consider adopting innovative ideas suggested by employees.
The executive team should analyze the existing Strategy regularly. This encompasses testing hypotheses about
cause-and-effect relationships between internal actions and their impact on customers and shareholders. The
Balanced Scorecard (BSC) metrics provide consistent evidence to validate the hypotheses.
In many organizations, the Balanced Scorecard project originates outside the SMO. As the project team assumes
the broader responsibilities to sustain the process, it operates separately from the Strategy planning office. To
avoid duplication of effort and any barriers between planning and execution, such separation should be removed
and eventually companies should integrate the 2 functions into a single SMO.
ROLE
Strategy formulation and Strategy execution are a cyclic process. The Strategic Planning process
encompasses external and internal competitive analysis, scenario planning, conducting annual
Strategy meetings, and coaching the executive team on strategic options.
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Effectively communicating the Strategy to people across the board
is vital for the organization
Desirable SMO Process – Strategy Communication
Employees should hear about the Strategy directly from the CEO—the SMO should
assist in creating the Strategy message delivered by the CEO.
OVERVIEW
Efficient communication with employees about Strategy and the Balanced Scorecard metrics,
objectives, and interventions is critical to engage employees in achieving strategic goals. In
decentralized decision-making environment, the SMO communicates the BSC to the people to
influence deeper understanding of the company’s Strategy in all departments and functions.
ROLE
The following are the key roles and responsibilities during the Strategy Communication process:
The entity responsible for the Strategy communication process varies from enterprise to enterprise. At some
places, the corporate communications department creates and conveys the messages utilizing multiple methods
and mediums. The SMO plays a coordinating role at such places that includes evaluating the content and
frequency of messages.
Organizations where the corporate communications group has limited focus on Strategy, the SMO takes a primary
responsibility for communicating Strategy to employees there.
The SMO must consistently ensure that training and education programs about the BSC are included in employee
education programs, such as those run by the corporate university, and in new employee training and orientation
programs.
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OVERVIEW
Ideally, the strategic initiatives should be managed discreetly from
everyday operations
Desirable SMO Process – Initiative Management
The SMO tracks and presents the progress of projects at management meetings.
The following are the key roles and responsibilities during the Initiative Management process:
The executive team ascertains strategic initiatives—e.g., total quality management programs or technology
investments to improve operations and customer service—during the annual planning process. They should
regularly assess and re-prioritize entire portfolio of strategic initiatives.
The SMO examines all strategic initiatives and ensures that they are being managed appropriately. They should
be mandated to eliminate the projects that are offering no strategic value.
The SMO ensures that all strategic projects have adequate resources and importance.
For strategic initiatives that are actively managed by an existing organizational unit, the SMO, acts as a
coordinator, reports to the executive team on the project status, and intercedes only in case of behind schedule or
over budget projects.
ROLE
Strategic initiatives are discretionary interventions—usually cross-departmental and inter-
organizational—to help accomplish strategic objectives. The strategic initiatives drive change and
deliver positive results.
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OVERVIEW
A proactive SMO has a profound role in effective planning and
budgeting—consistent with the Strategic Plans
Integrative Process – Planning and Budgeting
The SMO also makes sure that the marketing plans are consistent with the Strategy’s
customer value proposition and targeted market segments.
The following are the key roles and responsibilities during the Planning and Budgeting process:
The SMO collaborates with the finance department to ensure that budget targets are in line with those established
in the Strategic Planning process.
The SMO ensures that financial plans and budgets incorporate funding and personnel resources for strategic
initiatives. Many strategic initiatives are often cross-functional and cannot be financed through the budgets of
functional departments.
The SMO coordinates with the human resources office to ensure that staffing, coaching, and resource
development initiatives are in line with the skills needed.
The SMO helps the IT department in the identification and selection of systems, tools, and programs that are of
significant value to achieve BSC strategic goals.
ROLE
Linking budgeting, human resources planning, technology investments, and marketing initiatives to
Strategy is critical for the organization and this is where a clearly laid out SMO assists. Lack of an
operational SMO renders the functional plans too tactical, and implementation of an integrated
Strategy difficult.
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OVERVIEW
The SMO is of immense help in augmenting the human capital
processes and linking employee development to Strategy
Integrative Process – Workforce Alignment
The SMO aids in achieving improved human resource functions by linking employee
development to Strategy.
The following are the key roles and responsibilities during the Workforce Alignment process:
The human resources department and the Strategy Management Office should have a mutual goal and work
collaboratively to link employee focused processes to Strategy.
– This ensures alignment of employee goals and objectives, rewards, recognition, and development plans with
the strategic objectives and making Strategy everyone’s responsibility.
ROLE
Setting achievable employee goals, realistic compensation, and robust personal and leadership
development are all employee focused processes that the human resources unit often finds
challenging to achieve. The development of human capital is significantly improved when these
processes are aligned with the Strategy.
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OVERVIEW
The SMO role also encompasses communicating best practices
across the board
Integrative Process – Best Practice Sharing
In organizations lacking a designated chief learning officer, the SMO plays a key role in
transferring ideas and best practices throughout the organization.
The following are the key roles and responsibilities associated with the Best Practice Sharing process:
The SMO should facilitate the identification and communication of best practices throughout the organization.
– This entails helping ideas reach across departmental, functional, and business unit boundaries.
In organizations with a strong and active chief knowledge or learning officer, the SMO plays a coordination role in
this process.
ROLE
Innovation and ideas on improving strategic outcomes can spark anywhere in the organization.
These ideas are worth considering, and are applicable to various units and functions.The content on this page has been partially hidden.
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Contents
Overview
SMO Overview
Core Strategic Management Processes
Templates
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Insert headline
9 Key Strategy Management Processes – TEMPLATE
Insert bumper.
Scorecard
Management
Organization
Alignment
Strategy
Reviews
Best
Practice
Sharing
Strategic
Planning
Workforce
Alignment
Strategy
Communi-
cation
Initiative
Management
Planning/
Budgeting
Strategy
Management
1
2
3
4
5
67
8
9
Desirable SMO
Processes
Integrative
Processes
Core Processes
Source: Creating the Office of Strategy Management, Kaplan, Norton, 2005
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Insert headline
SMO – 9 Key Strategy Management Processes – TEMPLATE ALTERNATE
Insert bumper.
Desirable
SMO
Processes
Integrative
Processes
Core
Processes
Organization Alignment
Scorecard Management
Strategy Reviews
Strategic Planning
Strategy Communication
Initiative Management
Planning/ Budgeting
Best Practice Sharing
Workforce Alignment
2
1
3
4
5
6
7
9
8
Strategy
Management
Source: Creating the Office of Strategy Management, Kaplan, Norton, 2005
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Strategy Management
Insert headline
9 Key Strategy Management Processes – TEMPLATE ALTERNATE
Insert bumper.
Planning/ Budgeting
Best Practice Sharing
Workforce AlignmentOrganization Alignment
Scorecard Management
Strategy Reviews
2
1
3
Core Processes Desirable SMO Processes Integrative Processes
Strategic Planning
Strategy Communication
Initiative Management
5
4
6
8
7
9
Source: Creating the Office of Strategy Management, Kaplan, Norton, 2005
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Flevy (www.flevy.com) is the marketplace
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Flevy was founded under the principle that
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recreating the same foundational business
documents. Our vision is for Flevy to
become a comprehensive knowledge base
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from startups to large enterprises, can use
Flevy— whether it's to jumpstart projects, to
find reference or comparison materials, or
just to learn.
Contact Us
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