There is a cluster of concepts and practices that form the core of strategic management as a transferable discipline and set of skills that can be applied across a wide range of enterprises. The material I wish to present and the way I present it is very much shaped by my personal experience as a contractor and consultant, practitioner and researcher, practicing, speaking and publishing in the technical side of software and systems engineering and engineering management, leadership and strategy.
I credit the Australian Institute of Management (AIM), the Australian Institute of Company Directors (AICD) and the Company Directors Course (CDC) that I have completed to diploma level for contributing to my understanding of management, leadership and strategy (encouraged by my father); in addition to my long-standing memberships of the Institution of Engineers Australia (IEAust), Institution of Electrical and Electronic Engineers (IEEE) and IEEE Computer Society that have added much to my foundation technical background of my undergraduate degree in Electrical and Electronic Engineering, and postgraduate studies in Physics and Mechanical Engineering at the University of Western Australia.
The AICD CDC was for me a master class with some of the top executives and directors in Perth attending and just a handful of independent and small-company directors like myself. For many of the senior attendees I am quite sure that much of the material was well known and perfectly well understood by them beforehand however I like to think they gained something from the interaction with the presenters, each and expert in the subject-matter they presented during the week of full-time, intensive tutorials, case studies and discussion.
The management structure of organisations is key to understanding the role played by managers in formulating and executing strategy. The board of directors (BOD) of an organisation are tasked in Australia by the Corporations Act to act with due diligence and in good faith for the best interest of the members, usually understood to be the shareholders. The BOD will often take a different approach in startup and some high technology companies however in most mature organisations they will appoint management and delegate certain authorities to that management. Usually this is done via a managing director (MD) or chief executive officer (CEO) who is formally appointed as a staff member who also sits on the BOD as an executive director by virtue of his employment contract (as distinct from other directors who are appointed by the members-shareholders).
The key roles of the MD or CEO include the appointment of other managers and staff, the formulation and execution of strategy, the institution of processes and systems to manage the organisation and organisational risks, the negotiation, authorisation and signoff of contractual and other agreements, the preparation of reports and oversight of the day-to-day running of the organisation. At the same time, the BOD may retain certain authorities including the right to approve the appointment or dismissal of certain senior managers, for example the chief financial officer (CFO) or chief information officer (CIO) among others, the right to contribute to, vary or accept the strategy put forward by the CEO, the right to speak with senior officers of the organisation, the right to approve or deny contracts or agreements above a certain monetary limit or other conditions, the right to receive and ask questions about reports on business operations, the management and mitigation of business risks including both financial and nonfinancial risks.
Which brings us to engineering management, human resources, technology and the management of innovation which define the focal point of our discussion on strategic engineering management. In most management text books and reference guides the management of innovation and technology gets a relatively cursory treatment whereas human resources is rightly regarded as a central facet of management and leadership. Our focus here should be on the management of engineering and technology, the people aspects of innovation in regard to strategic management while acknowledging and reflecting on the close and - relationship between strategic management and project management in this sphere.
It is useful to consider intellectual property, business secrets, patents, copyright, trademarks and design registrations over processes and documents that give a business the edge, so-called core competencies that distinguish one company that excels in its fields of excellence from its relatively mediocre competitors. The knowledge portfolio of an organisation and the management of that knowledge is paramount to the mature organisation retaining its competitive advantage. Knowledge management includes metadata descriptions and the capture of process definitions and guides, best practice quality systems (ISO 9000, six-sigma, CMMI, and so on) and extends to the development of an innovative culture where the best and brightest are attracted and retained by the employer of choice who provides a culture of excellence in an exceptional workplace environment.
Patents are legally-sanctioned, restricted monopolies over the innovative process characterised by the description and statement of claims in the patent application. More to be said here, including perhaps some of my own experiences in the preparation of patent documentation for third parties and considerations for high-technology, software and other engineering companies.
Steven Covey's Eighth Habit otherwise widely and long known, if misunderstood, as encouraging entrepreneurial employees, technical advocates and potential leaders to find their voice, to speak and and be heard by the organisation. The culture shift that is required by management to encourage and stimulate such an innovative culture can be a great challenge for traditional leaders to inculcate in their colleagues and for the forward-looking leader to persist in propagating through their organisation. As W. Edwards Dening, the doyen of Japanese post-war statistical quality control, has emphasised that, "The problem is at the top; management is the problem," insofar as aspirational leadership has to come from the top while recognising that business transformation is part of everybody's job.
HBR Spotlight, March 2007, Leading Clever People by Rob Goffee (london.edu) and Gareth Jones (london.edu) points out that clever people want to work without artificial impediments being put in the way of their way. Their perception of management is shaped by the efficacy with which they can acquire the resources they need to get the job done without undue process constraints or other rules getting in their way. While their focus is on getting the work done in their technical areas of expertise it is paramount that management listens to the concerns and learns from the though leaders in their organisations. Whether by instituting formal or informal forums, ensuring they are informed of various nontechnical issues of relevance, invited to key meetings, and so on, it is important to get input and buy-in from them.
There are a raft of other issues that may be peripherally considered part of strategic management or rightly outside the direct scope but certainly within the consideration of general management. Doubtless there is significant overlap between general, operational, strategic, project and change management. Change management - people, process, technology - applicable to all scales of business, enterprises, industries. The organisational objectives set out in the charter or constitution; default constitution or statement of specific objectives, esp. nonprofit organisation, clubs and associations that may have specific and often narrowly-focused objects.
Risk management is complementary to strategic and project management; whereby reputational risk may be considered at the top of the list of risks to be managed; including mandatory compliance with relevant legislation and regulation - exp. Companies Act, Trade Practices Act (TPA), Occupation Health and Safety (OH&S); ASIC and state consumer affairs, business registration and licensing; ASX Governance Principles for list public companies.
The culture of an organisation permeates every layer of management, divisional and work groups - safety culture in utilities and miners; corporate values and organisational culture from directors and executive, throughout all tiers, from the top-down. Risk management; processes, systems; education, monitoring and sanctions; business, financial and reputational risks; corporate social responsibility (CSR) and triple bottom line. Governance - corporate, financial and IT; annual agenda, audit plan for finance, IT and systems. Strategy assessment: integrity model (CASFA), horizons model.
Financial considerations: NPV and payback period, risk-free interest rate, cost of deferral 6 delays, opportunity cost and organisation potential.
http://en.wikipedia.org/wiki/EABOK
http://en.wikipedia.org/wiki/Porter%27s_cluster relevance to local tech parks, Aust Marine Complex, gaming/iVec and Uni courses. More to be said on this matter.
Case Studies:
- new and existing businesses - like business and marketting plan but not the same (subset or overlap?)
- new city; new winery; new product; new process; new plant
- infrastructure work (eg. Subiaco and East Perth redevelopment authorities; LandCorp); public/private partnerships (PPP) and risk sharing; new or shared mining infrustructure
- controversy over Fortesque access to BHP rail infrastructure
- issues and planning; energy-efficient bauxite/alumina, nickel and low/high grade iron processing (haematite/magnetite)
- ore crushing, fines, magnet separation, pelletising; copper and lead processing
- coal gassification, carbon sequestration, alternative energy, wind (leader), solar, geothermal
- nuclear, environment impact, policy risk, uranium mining and processing policies; government regulation, Environmental Protection Authority (EPA)
- Woodside Pluto on Burrup, Aboriginal art destruction and relocation
- Japanese LNG gas prices, Chinese contract, spot versus long-term contract; price of energy
- trading carbon credits, carbon caps and cost of capital, relocation of plant to lower regulated countries
- climate-change greenhouse warming science, IPCC and hockey stick controversy; CO2 capture
- SCADA/PLC upgrades; OPC and open-source == proprietary, sole source and multivendor; platform security and robustness
- evolving relationship of control systems and IT (eg. Western Power, Water Corp)
- BHP Billiton value proposition for mooted merger with Rio Tinto
- Western Power proposed Eneabba to Moonyoonooka 330 kV transmission line
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