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Infomating the Strategic Management Process
A destinationKM.com White Paper
Posted Apr 19, 2001
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strategy-making in a large organization can be best described as a "messy" process. Formulating and enumerating effective strategic goals involves significant consensus building and active leverage of the organization's collective knowledge. Implementation of the strategic goals involves performance and assessment management linked to contextual variables. strategic alignment in such an organization can be assisted by the use of modern data management tools and information visualization methods.

The adoption of a small number of simple and intuitive knowledge management techniques can provide the framework for capturing, storing, linking, and disseminating the type of tacit and semi-structured data inherent in the strategy-making process. In particular, the confluence of innovative database schemas and extensive use of information graphics enables a strategic management information system to not only encode data about the strategic goals and organizational entities, but also data about goal interrelationships.

The following example is excerpted from the authors' recent strategic management activities at a large public University. Universities are unique in that they have a history of shared governance, distributed resource management, individual autonomy, and continuous technological innovation and diffusion. These characteristics lead to an organization that is persistently federated and therefore enacts a variety of goals and initiatives at many bureaucratic levels. Building synergy and crafting alignment, therefore, can be quite a challenge.

As part of a comprehensive strategic management initiative that also included a universally adopted formalism for precisely specifying and articulating goals, we created a knowledge taxonomy that enabled goal leaders and executives to specify the relationships among the strategic goals at one level in the organization and the strategic goals at a higher, level in the organization. The values in this taxonomic set were designed to be intuitively descriptive, mutually exclusive, and collectively exhaustive, but in a fuzzy kind of way. The three values chosen as most suitable to this environment, which we affectionately labeled "alignment metrics", are as follows:

"Aligned" - Goal contributes in a significant way to the accomplishment of one or more higher level goals. The aligned goal increases the effectiveness and/or the probability of success of the higher level goal(s). Aligned goals create synergy.

"Complementary" - Goal does not directly contribute to a higher level goal but is seen as providing outcomes that are consistent with the intention of one or more higher level goals. Complementary goals are generally related to the same university values and therefore serve a common purpose.

"Distinctive" - Distinctive goals are neither directly related nor ancillary to any higher level goal. These distinctive goals contribute to a specific purpose or outcome that is unique to a particular unit but are consistent with, and support the mission and values of the organization.

These words and their corresponding definitions have proven general enough to be able to be applied broadly and foster rigorous discourse throughout the institution, but specific enough to facilitate the dynamic encoding of complex interrelationships in a relational database management system. We designed and developed a custom application prototype called the "Goal Management System" (GMS) to assist in this endeavor. GMS is a web-based, thin-client application that captures goal interrelationships directly from individual goal leaders, determines alignment linkages in terms of "strategic breadth" and "strategic depth," and automatically generates a variety of comparison tables and diagrammatic artifacts from the database. Figure 1
shows a typical "strategic depth" (or "alignment thread", if you will) diagram of goal interrelationships.

GMS also has facilities for incorporating traditional performance management techniques, such as comparative benchmarking and charting progress towards goal attainment. But it is the alignment metric diagrams that hold the most potential for fostering strategic thinking and engendering pervasive and persistent strategic management in a visible way throughout the University. For the first time in the institution's history, goal leaders, senior executives, and other stakeholders have the potential for employing an information system that addresses the seemingly intractable problems of increasing organizational complexity and goal statement equivocality. The three-valued knowledge taxonomy permits a richer and deeper understanding of goals, relationships, and thematic junctures than would ordinarily be possible. "Aligned" goals are drivers of strategic stability, "complementary" goals hold potential to further collaborative investigation, and "distinctive" goals highlight areas that are particularly unique and valuable. This goal taxonomy can also be used to form the basis for program evaluation, resource justification, and a variety of other long range (linear extrapolation) and strategic (punctuated change) applications.

As a component of an enterprise-wide, strategic management information architecture, GMS functions both as a knowledge repository and a computational center for the algorithms required to build the horizontal, vertical, and lateral strategic path diagrams. This system may also help remove unnecessary organization "walls" and permit the conceptual and specific understanding of strategic goals beyond the traditional "span of control" and line-staff ratios that usually constrain and shape the information boundaries of many large organizations.

A system such as our GMS prototype provides several additional benefits to an organization. It can be used to cognitively link performance management measures and alignment management metrics with a single system interface. Typically, the former is more "quantitative" and the latter is more "qualitative". The use of both, or maybe more important, the use of the resulting intersections of both, are critical factors in leveraging widespread computing and networking investments, developing a supportive culture that can enact strategic goals, empowering disparate and often divergent organizational units, and nourishing the intrinsic spirit that enables individuals to adopt the principles of strategic management successfully in an organization.

Intensive use of information graphics is useful in other strategic activities as well. For example, automatically-generated diagrams depicting relative communication frequency between individuals (similar to the "social network analysis" paradigm of the behavioral sciences disciplines) gathered from say, internal email addresses, may be useful to make traditionally invisible or nebulous organizational relationships more visible and clear. Also, and maybe surprisingly, a significant amount of financial information can mapped onto a hieratical or network (or probably more realistic, a hybrid between the two) organizational model to augment the annual capital budgeting process with context, direction, and other qualitative data.

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