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The evolving
role of SMD
Paul Brown
University College Northampton, Northampton, UK
Abstract
209
Received May 2004
Accepted May 2004
Purpose To validate conceptual frameworks for strategic management development. Also, to test
the hypothesis that the objectives and design of a strategic management development programme
need to match the organisations level of commitment to strategic management and the degree of
maturity of its strategic management processes and competencies, in order that the programme can be
effective in enhancing the strategic capability of the organisation.
Design/methodology/approach Earlier work by the author (based on literature review and one
case study) had generated two conceptual models which could help in the understanding of strategic
management development. One provides a life-cycle typology matching an organisations level of
commitment to strategic management with the design of an effective strategic management
development programme. The second provides a causal network showing how strategic management
capability may be developed. In this paper case study research is reported from six organisations to
provide data, which are mainly qualitatative, to test the hypothesis and conceptual models.
Findings Both the life-cycle typology and the conceptual models are supported by the further case
study work. It was also found that the dominant strategy-making mode in the organisation can
influence the potential for strategic management development. Where the command mode of strategy
making is dominant the strategic aspects of a management development programme are inhibited
because this is not consistent with the command culture.
Research limitations/implications The generalisability of the findings is constrained by the
small sample size of six organisations. However, given the paucity of theory in the field of strategic
management development, the findings contribute to the conceptual understanding of this subject.
Originality/value The models proposed give insights into the complexities of strategic
management development and can be used to inform analysis and planning of more effective
strategic management development interventions.
Keywords Strategic management, Corporate strategy, Management development
Paper type Conceptual paper
Introduction
For over 15 years it has been contended that management development (MD) has a
strategic role to play in organisations. Constable and McCormick (1987) recommended
that MD should be an integral part of strategic plans and strategic change. Cannon
(1994) proposed that MD needed a renewed emphasis on its impact on corporate
performance and improved competitiveness. Thomson et al. (1997) reported that MD
was lagging behind and derived from change rather than helping to shape it, and was
inadequately linked to organisational strategies. These UK findings were mirrored in
US studies (e.g. McClelland, 1994; Seibert et al., 1995).
Such findings drove attempts to identify best-practice in MD, especially for senior
managers who were thought to be most able to influence strategy and performance
(e.g. Cannon, 1995; Hussey, 1996; Bolt, 1993; Burack et al., 1997; Michael, 1993;
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Osbaldeston and Barham, 1992; Seibert et al., 1995; Horwitz, 1999; Boshyk, 2000; James,
2001).
While considerable consensus emerged from such studies and there was a strong
empirical and practitioner foundation, there was a paucity of conceptual frameworks
and theory to help explain the phenomena described. The emphasis was on practice
from well-known and well-regarded organisations which were thought to be doing
something right. Such theory and conceptual frameworks as did exist were mostly
from mainstream MD thinking, which did not necessarily emphasise the strategic
contribution of MD. A few models were helpful in positioning different types of MD,
some of which had a strategic role (e.g. Patching, 1998; Talbot, 1997). However,
exploration of the contingency factors that might help determine which type of MD is
best suited to a particular situation remained under-developed.
This research was designed to make a contribution towards filling some of these
knowledge gaps, thus increasing the understanding of whether and how MD can
realise its strategic potential.
Strategic management development
The writer has defined strategic management development (SMD) as:
Management development interventions which are intended to enhance the strategic
capability and corporate performance of the organisation.
Case study research (Brown, 2004) has demonstrated that SMD can act as a catalyst for
change at a strategic level, contributing to the generation and adoption of new strategic
management processes and strategies (as well as being associated with change
management and strategy implementation) (see Figure 1).
This causal network shows how strategic drift (the organisation getting more and
more out of step with its environment, with accompanying organisational performance
problems) can act as a trigger for the generation or renewal of a SMD programme
(SMDP). This can help increase commitment to strategic management in the
organisation, which can be seen as an intervening variable in the creation of new
strategic management processes and competencies. Consequently the development of
enhanced capability in strategic management occurs both directly from SMD and
indirectly through the new strategic management processes. Strategic implementation
teams, which may sometimes be a formal part of SMD (e.g. with delegates working on
projects) both deploy and develop further the new strategic competencies. This model
is probably most applicable in situations where commitment to, and capability in,
strategic management are low and at first the network of interrelationships is likely
to be underdeveloped and incomplete. As the organisation gains in strategic maturity
so the role and design of SMD might be expected to change.
This analysis (see also Brown, 2004) gave rise to the main hypothesis for this
research:
The objectives and design of a strategic management development programme need to match
the organisations level of commitment to strategic management and the degree of maturity of
its strategic management processes and competencies, in order that the programme can be
effective in enhancing the strategic capability of the organisation.
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role of SMD
211
Figure 1.
Causal network showing
how strategic
management capability
may be developed
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Commitment to
strategic management
Organisational features
Role of SMDP
Low (level 1)
Emerging (level 2)
Developed (level 3)
Mature (level 4)
Table I.
Evolving role of SMD
Competencies in strategic
management defined and being
developed
Cascading of organisational
strategy to managers own units
Norming stage of teambuilding
Strategic implementation through
project teams and cascading of
change projects
Succession planning and cascade
development of strategic
management competencies
Performing stage of teambuilding
strategic management commitment and/or capability, for example, the reactor and
defender styles of Miles and Snow (1978).
In contrast the prospector and analyser styles (Miles and Snow, 1978) require
stronger strategic management commitment and capability. That organisations may
operate in similar environments, but have different levels of commitment to strategic
management, was demonstrated in the case of small American banks studied by
Newkirk-Moore and Bracker (1998). It was found that business performance was
highest when levels of both commitment to the strategic planning process, and the
frequency of strategic planning training, were high.
The aim of this research, therefore, was to test the hypothesis and life-cycle model
using a small number of case study organisations. There will be limitations to the
generalisability of the funding because of the sample size. However, this methodology
does allow the gathering of rich qualitative data, and the use of qualitative approaches
to test theories has been defended by Van Maanen (1983) and Yin (1990).
Strategy-making modes
Some explanation is now given of strategy-making mode, which was to emerge as an
important variable in the study. Hart (1992) produced a typology of five
strategy-making modes which has gained wide acceptance as a theoretical model.
The typology has implications for SMD in outlining alternative processes for strategy
formulation with which SMD might interact, and identifying strategy-making modes
which engage multiple levels of management.
In the Command Mode strategy is made by a strong individual leader supported
by a few top managers. Analysis and option evaluation is used to provide deliberate,
fully formed, ready to implement strategies. Other people in the organisation are
good soldiers who execute the strategy. This might work in an industry
environment that is relatively simple and hence can be understood by one or a few
people. The organisation will probably be relatively small, so that one person can still
maintain effective control.
In the Symbolic Mode top management creates a clear and compelling vision, which
gives meaning to the organisations activities and provides a sense of identity for
employees. This long-term vision can be translated into specific targets and there is an
implicit control system based on shared values. Speeches, persuasion, new projects and
recognition provide focus and momentum to guide the creative actions of individuals.
The flexibility of this mode is said to suit dynamic environments, and larger more
differentiated organisations which may be growing or re-orienting through proactive
strategies (such as prospector or analyser (Miles and Snow, 1978)).
In the Rational Mode there is a more comprehensive system of formal strategic
planning with written strategic and operating plans. There is upward sharing of data
and a high level of information processing and analysis. Detailed plans and
well-developed control systems are seen. It is likely to be found in larger firms
defending established strategic positions in relatively stable environments (defender
strategies).
The Transactive Mode employs strategy making based on interaction and learning
rather than the execution of a predetermined plan (which is precluded by the inability
of top management to understand a complex environment fully). Features of this mode
are cross-functional communication, feedback and learning, and dialogue with key
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Table II.
Organisations included in
the sample
Organisation
Sector
A
B
C
D
E
F
Number of employees
23,000
11,500a
13,000
4,500
5,000
1,200
In the interviews with senior human resource development managers, two sets of
questions were asked to assess the organisations commitment to strategic
management and to evaluate their SMDP (see Appendix).
These data were supplemented by further information from the postal
questionnaire and company documentation (e.g. annual report, web site, MD
prospectuses).
The results for one company will be described in detail to illustrate how the analysis
of data helped identify strategy-making modes and position a company and its SMDP
in a life-cycle stage of Table I.
Case study company A
Strategic planning in company A is well developed. There are clearly documented
plans, at corporate and divisional level, covering a five-year period, which are revised
annually. Corporate plans are produced by a central strategy team reporting to the
chief executive. Each divisional plan is produced by the divisional senior management
team (including the general managers of business units), which has someone with
specific responsibility for strategy. That person and the divisional managing director
present the strategic review to the main board. The strategy-making process has a
strong upward (from divisions) thrust and a demand for entrepreneurship at business
unit level, exhibiting features of Harts Rational and Generative modes.
There are systems to support the strategic management process the annual
resource planning and development cycle provides a resource plan to link to the
strategic plan (though it does not strongly incorporate human resource planning apart
from senior management succession planning and talent spotting).
The strategic process is supported by statements of mission, values and key
strengths. Overall the organisations strategy is thought to be durable over time, and
communication of it is good at corporate and business unit levels, but less so at
divisional level where there is often uncertainty about how the different business
units fit together, what the synergies are, and where we should be looking to expand
capability.
These organisational features provide evidence of progression to the highest level of
commitment to strategic management (CSM) in Table I. The features of level 3 such as
the embedding of systems for strategic debate and decision making, and systems and
processes to facilitate strategic management, have been seen to exist. Indicative of level
4, there is a continuous (annual) strategic review and a high commitment to strategic
management is apparent from for example the central strategic planning team and
the divisional senior managers who have particular responsibility for strategic
management. The company has reported impressive growth and strong and
improving financial results this may be taken as evidence of the effective
implementation of strategy.
There are some areas where improvements in commitment to strategic management
might be sought but these shortcomings can be viewed in the context of the continuing
development of strategic management, which was evident in the company.
There are three different MD programmes that operate at senior or strategic level.
The core senior management programme is targeted at those newly appointed to the
senior management team of a business unit. Formal training inputs are phased to cover
strategic management, implementation and control, while simultaneously each
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delegate works on a strategic plan for his/her own business unit. This is then presented
to the sponsoring senior management team. The strategic planning project is
fundamentally a learning process . . . but there should be some stuff in there that is
really capable of being adopted. However, because delegates are relatively new in post
there can be issues of peoples ability to get a platform or have the authority to take
some of the ideas forward. To help encourage the implementation of ideas there is a
review after four to five months to look at progress made. There is no formal link
between the project and the annual performance appraisal process. One of the benefits
of the programme is in bringing delegates together from disparate parts of the
company and some of the best projects have actually looked at harnessing capabilities
from different bits of the company to create a whole new business opportunity.
This programme clearly uses real strategic business issues as learning vehicles, and
does sometimes produce direct business benefits from the projects. While the
interaction between delegates is a key element this is not formalised within the
structure of the programme greater group involvement in the project work could be
beneficial. Also greater linkages with the performance appraisal system might help
provide support for the development and implementation of ideas.
Another programme, attracting 400 middle managers, is clearly aligned to one of
the main elements of the companys strategy. Described as more of an OD
intervention, the emphasis is on defined behavioural skills associated with building
strategic partnerships with clients, change management and entrepreneurship. It is
intended to break down internal barriers so that all of the companys capability can be
brought to bear on any particular clients needs. Learning networks, line manager
mentors and personal learning contracts are used. Participants work on live business
issues with inter-module assignments and are encouraged on residential modules to
experiment with new behaviour in a safe environment.
When mapped against the SMDP dimension of Table I the requirements of level 3
are seen to have been met. The defining and developing of strategic management
competencies (such as strategic partnership skills), and the cascading of organisational
strategy to managers own units (in the core programme) are evidenced. There is less
evidence that the use of MD for strategy implementation is strongly present, since the
interventions described are mostly concerned with learning rather than real strategy
implementation. Where real strategy implementation is attempted it is somewhat
disconnected from the mainstream strategic management process and does not carry
the full support of other senior managers and directors. Nevertheless, this programme
does have a strong strategic focus, and strategic management competencies are being
cascaded within the organisation e.g. through the line managers
coaching/mentoring role. Also, the companys MD programmes do clearly support
succession planning. In these respects a number of the hypothesised conditions for
level 4 are met. Overall the programmes have some strong strategic roles, and advance
beyond level 3, though not fully meeting the level 4 role of SMDP in the typology. The
evaluation of the programmes indicated that they were successfully contributing to
strategic capability.
Analysis
Table III analyses possible objectives for MD programmes (derived from literature
review) that were included in the postal questionnaire, sub-dividing them into those
Strategic
Functional
The evolving
role of SMD
217
Table III.
Classification of
objectives in SMDP
with a strategic emphasis and those with a more functional or operational emphasis.
The interpretation of strategic used here has included change management,
innovation/creativity and entrepreneurial behaviour as well as other strategic
management aspects. It was evident from the interview analysis that some of the SMD
programmes did not have a strong strategic focus, and this concept was
operationalised as the SMD score.
The SMD score (maximum 4.0) was derived from the postal questionnaire results to
reflect the extent to which strategic objectives for the MD programme were set and
achieved. This can be contrasted with the functional management development (FMD)
score (maximum 4.0) which measured the extent to which functional/operational
objectives were set and achieved.
Table IV shows the results for each of these variables. The data indicate that for
organisations B and C the programme was not designed to have a strong strategic
effect. The other four organisations all scored above the midpoint on the scale for
strategic objectives. The indication that in B and C the programmes did not have a
strong strategic role was supported by the interview data. For B, the programme
(which was organised at group level) was not deemed to be very successful and did not
Strategic
management
development
score
Organisation
Functional
management
development
score
2.6
2.8
B
C
1.7
1.7
1.8
2.3
3.0
2.2
E
F
2.6
2.4
3.2
2.0
Commitment
Strategy-making to strategic SMDP
management level
modes
Rational
generative
Rational
Command
rational
Command
rational
Rational
Symbolic
rational
SMDP
enhances
strategic
capability
3/4
4
4?
1
1
2
1/2
2
1/2
U
U
Table IV.
Overall summary of
results
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have a direct strategic linkage to the division. In C each manager had an individually
tailored development plan and there was little group activity. The diversity of
individual programmes meant that there was not a common strategic focus in MD
activities, and there was more emphasis on job performance and succession planning.
It is also worth noting that only in the cases of D and F were the strategic scores higher
than the functional scores, indicating that even A and E (as well B and C) were
apparently placing greater emphasis on the functional objectives of their programmes.
To assess the strategy making modes, level of commitment to strategic
management, and SMDP level similar analysis to that described for organisation A
was conducted.
From the qualitative evaluation of the programmes (as illustrated with organisation
A) it was concluded that those of A, E and F were contributing to the development of
strategic capability in the organisation, but this was much less apparent in B, C and D.
Hypothesis testing
Table IV provides a basis for testing the main hypothesis, by examining the
relationship between the organisations CSM (CSM level) and the design of the SMD
programme (SMDP level).
It has been seen that in the cases of two organisations (B and C) the senior MD
programmes do not have strong strategic aims. For B, although the organisation has a
strong commitment to strategic management, the MD programme was commissioned
at group level and has no direct links with the divisions strategy. While this may not
be an optimal situation, it seems that it is tolerated because the slow-changing
environment in which B operates has not provided sufficient stimulus to move to a
more strategic form of MD (as reflected in the low SMD score of 1.7). Thus there is
mismatch between CSM and SMDP levels (shown as level 4 and level 1 respectively).
However the SMDP at B is not considered to be very effective and would probably
benefit from further development to a higher level on the typology. This is consistent
with the hypothesis, i.e. because of the mismatch between CSM and SMDP levels the
programme is not effective in enhancing strategic capability.
In the case of C, the organisation apparently has a high CSM level. From the
interview data many aspects of Level 4 were seen. However, because the dominant
strategy-making mode is Command there is little participation by managers in the
strategy formulation process. This aspect is therefore also absent from the SMDP
which was judged to be at level 1. The programme does not have prominent strategic
management aims and this is probably a reflection of the Command style. This
situation may be acceptable because although the organisations environment is
dynamic it is not especially complex. There is not a strong international dimension,
and the organisations activities are focused in financial services rather than being
diversified. Therefore the executive directors may be able to monitor environmental
trends and competitive action and make the key strategic decisions needed. The
evidence from C is that the hypothesis is supported.
The Command strategy-making style is also exhibited by D. Again it was found
that the senior MD programme does not contribute significantly to strategy
formulation, which is consistent with the Command style. Hence although there is a
high commitment to strategic management (Level 4) this is not reflected in the SMDP.
Like C, D has apparently been able to prosper under a Command mode (and in both
The evolving
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may assume a more dominant role in that evolution. This was recognised in Figure 1
where new strategic management processes were seen to arise from the recognition of
organisational performance problems, and from an increased commitment to strategic
management. These effects were seen in several of the organisations including D and
E. Other aspects of the causal network could be recognised in the case studies. At E
strategic drift was a trigger for the decision to take an SMDP initiative. That strategic
capability could develop through the work of implementation teams and other new
strategic management processes was apparent at D.
It is therefore concluded that the causal network (Figure 1) has further empirical
support though the effects may only be partially apparent in any one organisation.
The diagram does appear to be useful in portraying the non-linear and multiple cause
relationships that might typically be found, but cannot claim to be exhaustive or
totally accurate in any one case, because of the uniqueness of each set of social
interactions.
Generalisability of the research
Given the small sample size it is necessary to question the representativeness of the
organisations studied and the generalisability of the findings. Within the small sample
the hypothesis was not supported in two organisations because of the effect of another
variable (mode of strategy making). It might be speculated that in a larger sample other
independent variables may have been detected.
All of the samples studied were large organisations based in the UK. No inferences
can be drawn about whether small private sector companies, voluntary sector
organisations, or non-UK organisations would have yielded similar results. The
sample included only one public sector organisation, which may not be representative
of that sector as a whole.
Thus the generalisability of the results is limited. The results have, however, given
valuable insights into the relationships explored. This new knowledge should be
employed sensitively when considering its applicability to other organisations. The
life-cycle model might be used to inform analysis and planning of MD, helping in the
diagnosis of organisational needs and in the design of more effective SMD
interventions.
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