Strategy evaluation is an essential part of the strategic management process. It is the process of assessing 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. 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. Managers can use strategy evaluation to assess the suitability of the current strategy in today's dynamic world with socio-economic, political, and technological innovations. Strategists should set tolerance limits between which the variance between actual and standard performance can be accepted.
If the strategists discover that the organization's potential does not match the performance requirements, then the standards must be lowered. The purpose of strategy evaluation is to ensure that the strategic plan yields the desired results and, if not, to identify where and why the performance is not sufficient. This entire process is iterative and must be repeated periodically, not only when the strategy does not meet the objectives, but also as part of a proactive approach and continuous improvement in strategic management. Let'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. The best strategies are those that are agile to meet the needs of the company, with areas of focus that are constantly changing, always guided by the general vision. Therefore, in this case, strategists must discover the causes of any deviation and take corrective measures to overcome it. Strategy evaluation contributes to better decision-making, improves performance and increases the likelihood of achieving strategic objectives.
Celebrating success when a strategic objective is achieved remarkably not only boosts morale but also sends a strong message that executing the plan is really important. To ensure that your strategy evaluation process is successful, it is important to have a clear understanding of your goals and objectives. You should also have a well-defined timeline for achieving those goals. Additionally, you should have a system in place for measuring progress against those goals. Finally, you should have an effective communication system in place so that everyone involved in the process is aware of any changes or updates. In conclusion, strategy evaluation is an essential part of any successful strategic management process.
It helps organizations identify potential problems, make informed decisions, and stay on track to achieve their strategic objectives. By having a clear understanding of your goals and objectives, setting a timeline for achieving them, measuring progress against those goals, and having an effective communication system in place, you can ensure that your strategy evaluation process is successful.