Strategic management
Strategic managers can build corporate commitment to life cycle management by ensuring that it is reflected in the company's corporate policy and strategic direction, and informs strategic planning.
Profile
Strategic managers establish corporate direction, striking a balance between longer-range considerations and day-to day operational demands. They rely on knowledge of financial, technical, and marketplace conditions and trends.
More specifically, strategic managers work with executive teams and boards to set the long-term strategic direction of a company through the preparation of corporate business and financial plans. Strategic management may also involve implementing corporate review and communication processes, as well as playing an active leadership role.
Current Practice
Environmental and social considerations may influence strategic management decisions, but are typically seen as stand-alone or 'add-on' cost factors. Strategic managers may also be involved in planning responses to critical stakeholder environmental issues (e.g., forestry practices).
Moving towards Life Cycle Management
Strategic managers often have the power to broaden the typical criteria used in strategic planning by including life cycle considerations. Taking life cycle issues into account shows environmental commitment. It also reduces the risk of being blind-sided by unforeseen liabilities or stakeholder environmental concerns, and may prevent losing ground to a competitor.
Applying the LCM framework to Strategic Management
THINK:
Consider what kinds of environmental issues or social impact might become significant at various points in the life cycle of the company's product(s). Consider different business models that provide the same value and service to the consumer that you currently provide.
ASK:
When making decisions regarding business strategy and product, services or other investments, ask your organisation and stakeholders for additional life cycle information, such as life cycle maps with key environmental and stakeholder issues, and key risks identified at relevant life cycle stages. Engage stakeholders and environmental experts to develop knowledge of current and emerging concerns.
ASSESS:
Where specific investment decisions are being made, consider authorising more detailed life cycle studies, or more detailed cost accounting (see Management Accounting job function description).
ACT:
Invest in measures that address significant environmental and stakeholder issues, and key risks across the life cycle of your product or service. Adjust the company's existing product mix in light of life cycle issues. Apply life cycle considerations in choosing new products or production systems.
Strategic managers can use life cycle thinking to:
- Support strategic planning about the company's business strategy and product mix (e.g., deciding on new products, and choosing between investing in product improvement or exiting from the market).
- Identify and address environmental concerns which may be associated with a product, recognising that products are open to scrutiny at any stage of their life cycle (e.g. campaigns against sanitary products have been launched based on the use of chlorine at the pulp processing stage and the current concern about many electronic products due to their "standby" electricity consumption during their useful life).
Related Strategies
LCM is not an alternative to an Environmental Management System (EMS), but it can complement an existing EMS or an approach to developing one. Developing an environmental policy, setting goals, and tracking progress towards those goals, are all part of an EMS. A company with an EMS that embraces LCM will benefit from a better understanding of the product's and business' life cycle and associated environmental impacts. This awareness can help focus improvement efforts, provide a framework for measuring and tracking results, and guide continuous improvement and the communication of results.
