Your strategic plan is a living document

Your strategic plan is a living document

Every organisation that has developed a strategic plan needs to look at how the business is performing against the plan. A strategic plan is a living document and therefore business executives should constantly evaluate and review performance.
Sir Winston Churchill said, “However beautiful the strategy, you should occasionally look at the results.”

After a company has prepared a strategic plan and is in the process of implementing it, it is important to assess how that strategy is performing. The process of evaluation and control should therefore be in place at every stage of the strategic management process to ensure that the strategy is working as envisaged and this will assist in anticipating and correcting any deviations or weaknesses in the system.

The process of evaluation involves collecting information about how the strategic plan is progressing and then decide on an appropriate action once the evaluation results have been produced. If everything is going well then the organisation can continue doing what it is doing or even do better.
However, if the evaluation shows that there is adverse performance then the trouble spots should be eliminated. An adverse performance could be a result of an ambitious plan that might need revision downwards or it could be a result of inability by employees to follow the implementation process properly, in which case there might be a need to upgrade their skills.

Strategic evaluation helps to provide direction as it enables management to make sure that the organisation is heading in the right direction and that, where needed, corrective action is taken.
Strategic evaluation also provides guidance to everyone within the organisation as to what is happening, how they are performing in comparison to what is expected, and what should be done to maintain the good performance or how to improve performance.

Lastly, strategic evaluation inspires confidence if performance is good resulting in everyone within the organisation being motivated to maintain and achieve better performance to impress key stakeholders like customers, the government and shareholders. The motivation is even enhanced if performance is linked to rewards.
The evaluation process follows the following steps: firstly you have to set SMART objectives (that is, objectives that are specific, measurable, achievable, realistic and time-bound), the second aspect is to evaluate actual performance against the set objectives, and lastly take the necessary action based on the results of the evaluation.
When setting objectives it’s very critical that the organisation identifies the critical success factors, those activities that the organisation should perform well to satisfy its customers. Such activities, if performed well, will ensure the success of the strategic plan. Performance objectives should then be set for such critical areas.

It is very important to ensure that the objectives are realistic and are attainable. One way of checking if the objectives are realistic is to benchmark them with another organisation in the same industry or outside the industry if that organisation performs similar activities. When benchmarking with an organisation you should set targets that are equal, or are better than, what the competition is offering.
When setting performance objectives it is very critical that the organisation focuses on measuring how employees are performing, how the equipment is functioning and more importantly how money is used.

Performance should be looked at from five dimensions, namely, the volume of work completed, how well a task was done, whether the task was done according to expectations, whether employees were creative enough to find new or better ways of doing things.
Once the objectives have been set the evaluation process can begin by collecting the required information and compare the actual performance against the standard and determine what action is necessary.

Strategic evaluation does not only concentrate on how well things are progressing vis-a-vis the strategic plan but it also does interrogate how good the strategic plan is. If the strategic plan is flawed, corrective action should be taken very swiftly and decisively before an organisation spends huge sums of money implementing a bad strategy.
There are a number of ways to assess how good your strategic plan is. The first method looks at how the strategy is aligned to the external environment and the internal environment. The other method evaluates the strategic plan by considering the following key questions, namely:
Is the strategy internally consistent?

Is the strategy consistent with the environment?
Is the strategy appropriate in view of available resources?
Does the strategy involve an acceptable degree of risk?
Does the strategy have an appropriate time-frame?
Is the strategy workable?

What is the position of our competitors in comparison to ours, and what are the implications of this on our strategic approach?
How might our competitors react to the strategy?
How competent is the strategist who put the strategic plan together? Do these people have the necessary skills?

When reviewing a strategic plan one can use one of these two approaches. Firstly, you can do a functional review where each function reviews its strategy against the above criteria, or secondly you can use a thematic approach where you review the performance against the main strategic theses like financial, people, operations and marketing.

About the writer

Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy (ACCA P3), advanced performance management (P5) and entrepreneurship. He is the Managing Consultant of Shekina Consulting (Pty) Ltd and provides advisory and guidance on leadership, strategy and execution, corporate governance, preparation of business plans, tender documents and on how to build and sustain high-performing organisations. For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com, WhatsApp on +266 58881062 or call on +266 62110062.

 

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