Strategy evaluation is an essential part of the strategic management process. It helps to assess the effectiveness and efficiency of a strategic plan or initiative, and serves as a fundamental feedback mechanism for determining whether the strategy has achieved its intended objectives. In this article, we'll explore the comprehensive steps involved in evaluating a strategy, from understanding what the company wants to achieve to recognizing how the companies differ and deciding what the company will do to solve the problems. Before evaluating a strategy or policy, it's important to create a set of standards that can be used to measure the progress and objectives of the strategy.
Managers can also assess the suitability of the current strategy in today's dynamic world, with socio-economic, political and technological innovations.
Steps of Strategy EvaluationThe strategy evaluation process involves several interconnected steps that are continuously repeated to ensure that the strategy remains effective and relevant. These steps include:
- Identifying what the company wants to achieve and the factors that must be considered to set the objectives.
- Deciding how the objectives will be measured.
- Understanding how the companies differ.
- Determining what the company will do to solve the problems.
The evaluation of the strategy aims to ensure that the strategic plan yields the desired results and, if not, to identify where and why the performance is not sufficient. Therefore, in this case, strategists must discover the causes of the deviation and take corrective measures to overcome it. At this step, the company must figure out how to fix the problem and start addressing it. The periodic evaluation of the implemented strategies will allow you to develop new strategies, discard what has not worked, adjust and take corrective action when necessary.
Example of Strategy EvaluationLet's consider an example of evaluating strategies in the context of a technology startup that has set a strategic goal of increasing its market share by 25% in the next two years.
If strategists discover that the organization's potential doesn't match performance requirements, then standards must be lowered. This example demonstrates how strategy evaluation can help a company identify potential problems, make informed decisions, and stay on track to achieve its strategic objectives. It contributes to better decision-making, improves performance and increases the likelihood of achieving strategic objectives.