An Overview of the Strategy Evaluation Process with Examples

The process of strategy review is sometimes disregarded in the larger strategic management process. After the flurry of activity in the early planning stages, followed by the reality check of executing your strategy alongside business-as-usual, strategy evaluation is sometimes overlooked.

When this occurs, strategies soon become obsolete and out of sync with the changing face of the organisation.

On the contrary, when an effective strategy review process is in place, firms may profit from insights and lessons learned from previous performance to support more efficient decision-making.

What is Strategy Evaluation?

Strategy assessment is the process of analysing a strategy to see how successfully it has been implemented and carried out. It is an internal analytical tool that should be utilised as part of the organization’s overall strategy analysis when making strategic choices.

Typically, the strategy evaluation process consists of answering questions like:

Are we on track to meet our key business objectives?

How far have we come towards achieving our vision?

Are our strategic focus areas still relevant?

Which of our objectives has been completed?

Do we have enough projects to achieve unfinished objectives?

Are our KPIs still useful for tracking progress towards our goals?

Where did we fall short of our objectives? Why did this occur?

At the absolute least, you should assess your plan twice a year—or better still, quarterly. Even if you believe your current firm strategy is ‘too far gone’ and requires a fresh start, you should do a comprehensive strategy review to determine what went wrong and utilise this knowledge to develop your new plan.

The error that individuals frequently make when it comes to strategy execution is viewing their plan as a linear series of actions. In practice, the strategic planning process involves ongoing iteration and modification, with strategy evaluation playing a critical role in determining strategy creation.

A good strategy should never really ‘end’. Rather, it should morph into something more ambitious and sophisticated as goals are met.

Steps for a Successful Strategic Evaluation Process

There is no one-size-fits-all approach to strategy review, therefore we invite you to consider your technique. However, after working on many ideas with our customers, we recommend the following stages for a successful review process.

Step 1: Evaluation starts at the beginning.

It may seem counterintuitive, but you should start your strategy review process at the planning stage. Strategy assessment is fundamentally the process of determining:

What did we do well?

How can we improve on what we did well?

What did we learn about ourselves and the outside world along the way?

Steps to a Successful Strategic Evaluation Process

To track progress towards the goals, they established the following KPIs:

Market Share Growth

Product Adoption Rate

Sustainability Ratings

By establishing specific KPIs that create a standard and enable the measurement of real results, EcoWise will be able to answer essential questions during the strategy assessment process:

Did we fulfil our KPIs?

Why did we fall short?

Was this even the correct KPI?

Step 2: Establish consistent procedures and tools.

To avoid seeming repetitive, successful strategy evaluation necessitates preparation that extends beyond the establishment of appropriate KPIs. You’ll also have to arrange your strategy rhythm’—things like:

How frequently will we assess our progress towards our goals?

What standardised set of reports will be utilised across the company?

What amount of information should we include in our written remark on progress versus the plan?

It’s important to determine these types of things up front and implement a regime of meetings and reports throughout the organization.

We refer to this process as your strategy rhythm’ since it should serve as the foundation for your organization’s actions and be maintained on a regular and consistent basis throughout the calendar year.

Step 3: Let teams analyse their strategies.

Empowerment is crucial in the strategy review process. Rather than relying just on the leadership team to evaluate your plan, engage stakeholders from other areas and departments to produce their assessments of how the team did in comparison to the strategy.

Give them a simple framework to do the study and answer important questions like:

Did we achieve our goals?

What was it that enabled us to succeed?

What problems caused us to fall short?

Were our goals well-defined, and did they get us closer to realising our ultimate vision?

Ideally, you’ll have your teams present with the tools you established in step 2. This includes any previously agreed-upon strategic dashboards and standardised reporting.

Step 4: Take Corrective Action.

Steps 4 and 5 (below) are fairly interwoven and should be completed mostly together. If you discover that you aren’t fulfilling one of your goals, you should do two things:

Begin by determining if the original purpose is still appropriate.

If so, take appropriate action to rectify any issues.

Assuming you are still confident that the objective you have established is correct, you must develop an action plan to get back on track.

There are several reasons why you may be unable to achieve your goals, ranging from seemingly easy concerns such as:

Insufficient deployment of resources, whether human or financial

Conflicting priorities

Ineffective tracking of objectives.

Misalignment or comprehension of the purpose.

Alternatively, your difficulties may be more complicated and relate to:

Increased competition.

A major capital shortage

Regulatory pressures

Lack of internal innovation.

Whatever the situation, the sooner you recognise these challenges, the sooner you can begin to take remedial action to guarantee a more successful plan execution, bringing you closer to your targeted goals.

How can I detect the problem?

During the strategy assessment phase, you may utilise tools and frameworks to get additional insight into internal and/or external variables that may be impeding your success.

For example, a SWOT analysis may help you identify your strengths and areas for growth. Identifying your shortcomings is critical to determining what is holding your plan behind.

Another great practice is to do a competitive analysis to learn what your rivals do better. By comparing your strengths and shortcomings to theirs, you may see where you have a competitive edge and where you need to improve.

Step 5: Iterate the plan.

There are two instances in which you should repeat your plan as part of your strategy evaluation—one of which is much more positive than the other:

Scenario 1: When you reach your goals

In an ideal environment, your strategy changes as you achieve some or all of your strategic goals. Your strategy is not set in stone; it is adaptable and can take unforeseen turns.

For example, you may achieve some targets more early than expected. When that occurs, you should not wait for the complete plan to unfold. Instead:

If you’ve completed all of your goals, it’s time to consider if your larger emphasis area is complete. If not, it is time to set new goals within that target area.

Or, if you’ve completed all of your emphasis areas, it’s time to consider if you’re getting closer to your goal. Otherwise, new priority areas should be implemented.

Scenario 2: When You Fall Short of Your Goals

Now, picture a hypothetical scenario in which you did not achieve all of your objectives. However, just because you missed a target does not imply that you must take quick corrective action.

One of the primary effects of good strategy assessments is the recalibration of Key Performance Indicators (KPIs).

Returning to the example from Step 1, suppose EcoWise successfully released five new goods, but this did not result in significant market share gains.

In this scenario, it implies that the initial KPI may not have been accurate. But you wouldn’t have known that without the KPI in the first place.

Step 6: Celebrate accomplishments.

We kept the most enjoyable aspect of the strategy review process for last: celebrating success.

Given that your plan will never be ‘complete,’ it’s critical to celebrate milestones along the road to keep your workforce motivated and engaged. Enjoy the first time you reach a KPI or goal area!

Celebrating the achievement of a strategic objective not only boosts morale but also conveys a clear message that the plan’s implementation is critical.

Strategy Evaluation Framework Example

Consider how a supply chain firm would approach the examination of its quarterly supply chain plan:

KPI analysis: First, they review their KPIs to determine which targets they have achieved and which are still in process.

Team performance report: The teams begin working on performance reports, which will provide insights into their accomplishments and areas that require extra effort.

Further analysis: When particular KPIs fall short, they conduct a more in-depth investigation to determine the core reasons for these performance gaps. In certain circumstances, they even recognise that the initial KPIs may not have been the ideal match.

KPI evolution: After successfully meeting a KPI, they alter and offer a new one to move closer to critical business indicators.

Centralised observability is the key to effective strategy evaluation.

Adaptability, evolution, and constant development are essential components of strategic company management success. A critical component of this journey is the ability to acquire a comprehensive, centralised perspective of your plan.

Centralised observability is critical in effective strategy evaluation, allowing organisations to:

Real-time monitoring of key performance indicators and goals.

Understand how teams collaborate to achieve the broader company goals.

Quickly identify locations that may require modifications.

Foster a culture of openness and accountability by allowing teams to understand how their efforts affect the overall plan.

This unified perspective simplifies the process of assessing strategy effectiveness and provides invaluable insights for more effective decision-making.