Before I Hand Over The Key To Strategic Initiative Management...

 

In my last blog I promised a “cohesive, articulable structure to address superior strategic initiative management ideas,” and I fully intend to do so. But first I need to cut through some of the fuzzy language associated with concepts such as “strategic initiative management,” and I will do so by pointing out what strategic management is not.

As I have often stated previously, Strategic Management is one of three distinct types of management, the others being Asset Management and (of course) Project Management. Each of these types has different goals, methods, and information streams needed to achieve those goals. As far as I know, I’m the only business writer to assert such a structure. So, how do I know that this assertion is valid? Here’s how.

Asset Management =

Asset management seeks to maximize shareholder wealth, and its primary information stream comes from the general ledger. I know this because that’s what they drilled into my skull in graduate school.

Project Management =

Project management seeks to deliver project work under the customers’ expectations/contract parameters of scope, cost, and schedule. Its primary information feed comes from reports generated via Earned Value and Critical Path methodologies. I know this because of decades working in the industry, three books authored and hundreds of columns, articles, and blogs, plus my three PM-centered professional certifications.

Strategic Management =

Strategic management is all about gaining market share, either by establishing new markets or out-competing your competition in existing ones. Strategic management’s information streams tend to be less objective, and more predicated on market analysis and polls.

Okay, so how do I know these are distinct types, and not mere gradations of the huge body of management science codex? Here’s how.

Asset Management ≠ Strategic Management

Asset Management is provably different from Strategic Management due to corporate behavior during hostile takeovers. A hostile takeover occurs when one company buys up the competitor’s shares – at inflated prices – in order to gain a majority ownership and force the company to liquidate. The acquiring company almost always incurs great expense to even attempt this tactic, and the target company’s shares jump in value; however, from a Strategic point of view, it’s worth it to eliminate the competitor, i.e. gain market share. Recall the objective of the Asset Manager, to maximize shareholder wealth. If Asset and Strategic Management were simpatico, then no acquiring company would ever attempt it, since shareholder wealth is (temporarily, with luck) driven down, and no targeted company would resist, because their shareholder wealth increases, usually significantly. The fact that acquiring companies attempt this tactic regularly, and targeted companies resist, proves that Asset and Strategic Management are different in type.

Strategic Management ≠ Project Management

Strategic Management is notably different from Project Management from observations of how monopolies work. Monopolies – for a variety of reasons – have no competition in their particular markets, and are therefor under little (or no) compunction to even attempt to meet customer expectations. But in those instances where their monopoly basis suddenly goes away, their behaviors change dramatically. Think the performance of cable television after satellite television became widely available, the “Baby Bells” telephone companies when cell phones came along, or government-run department of motor vehicles after licensed, private providers are allowed in to the market. Clearly, if market share is not an issue, they couldn’t care less about the customers’ expectations of scope, cost, and schedule, proving that Strategic and Project Management are different in type.

Project Management ≠ Asset Management

Project Management is provably different in type from Asset Management in that the information streams are irrelevant one to the other. Your typical PM doesn’t care whether the copier is purchased or leased, and your accountant is completely unaware of the schedule variance on a given project. As stated previously, Asset Management is all about return on investment, whereas Project Management is about delivering scope, on-time and within budget constraints.

With these definitions as the foundation, the structure of Strategic Initiative Management…

…will have to wait until next week, as I am out of room. Besides, did anyone really expect a fair addressing of the subject to fit inside 800 words?