We began this series of blogs with an outlined map of the overall Strategic Planning Process. So far we have covered Step 1: Establishing Vision & Objectives for Success, Step 2: Environmental Scan, Step 3: Strategy Formulation and Step 4: Strategy Implementation. With Steps 1-4 done, you are ready for Step 5: Evaluation & Measurement.
Before you implement any parts of your strategy, do yourself a favor and put in place a measurement for it. After all, you are putting together a plan to improve some element of your business; do you not want to know if you have moved the dial? Imagine trying to lose weight without measuring your caloric intake or at the very least jumping on the scales. Remember you are spending precious time, energy and resources to implement your strategy so you owe it to yourself to evaluate and know how it is working (or not working) and if any changes or improvements are required.
Revenue is not the only measure of successful strategy. Money may be a longer-term result. For example, you hired a new staff member to improve workflow and provide leverage so you can make more money. You will want to measure how much time you are able to spend on more critical money-making activities per week or perhaps the efficiency and error rate of how the new person is performing their tasks. While ultimately a new hire should create more revenue, in the short term you may need to look at other indicators to know what is really happening.
Here is a 5-step process for evaluation and measurement:
Define parameters to be measured
Define target values for those parameters
Compare measured results to the pre-defined standard
Make necessary changes
Too often, plans are developed and communicated and then nothing further happens until the next planning cycle. Effective plans have measures associated with them to determine whether the plan’s realization has been successful. Summarize regularly to evaluate success and make corrections or changes to the plan and plan assignments, as needed. This is an important practice for strategy implementation.