Strategic management is an approach to leadership that involves clearly articulating a company's overall mission, and then setting a series of strategic objectives, or quantifiable goals, to chart progress. Success is measured in reference to these strategic objectives, which can be re-evaluated over time as unforeseen circumstances and opportunities arrive. Strategic management is an effective approach to leading a company because it emphasizes clarity and specificity, making use of concrete reference points and facilitating day-to-day decisions that are consistent with a larger vision.

Vision and Mission

Strategic management bases day-to-day decisions on big-picture ideas about what a company believes in and what it wants to achieve. A company vision is a statement about its beliefs and ideals. For example, the vision of an urban farm might be, "We believe that everyone is entitled to fresh, healthy food." A company mission is a broad statement about how the business will achieve its vision. This same urban farm might articulate its mission by saying, "Our mission is to grow fresh produce in unused green spaces and make this produce available to residents of low-income neighborhoods."

Strategic Objectives

Stragtegic objectives are measurable goals that are consistent with a company's mission and vision. They provide concrete milestones for evaluating progress. Strategic objectives should be based on careful research about opportunities and possibilities, and they should be both challenging and achievable. "To grow substantially over the next year" is not a measurable goal, but "To grow 20 percent over the next year by opening six new accounts" is specific and quantified. The latter goal will enable a company to effectively determine whether it has achieved its strategic objective.

SWOT Analysis

A SWOT analysis is an invaluable tool used in the strategic management process. It is an acronym for "strengths, weaknesses, opportunities, threats." The process of carefully evaluating a company's position relative to each of these considerations helps to understand its position relative to its competitors, and also to create strategic objectives that build on strengths, compensate for weaknesses, make the most of opportunities, and respond proactively to threats.

Strategic Management Process

A successful strategic management process should involve employees as well as managers. Management make take the lead in establishing the company's vision and mission, but employees working in the trenches are more likely to have a realistic idea of what they can achieve and how they can achieve it. Involving employees in the act of developing strategic objectives also helps to keep them engaged. The development process forces them to think critically about big-picture questions, and employees who have had a hand in developing strategic objectives will be more emotionally involved in the process of working towards these goals.