STRATEGIC EVALUATION IMPORTANCE AND SYMPTOMS OF MALFUNCTIONING OF STRATEGY

 

 

 Importance of Strategic Evaluation

Strategic evaluation helps the organisation to find the flaws in the current implementation and to make suitable changes where necessary. Following points determine the importance of strategic evaluation :

1) Performance Measurement : 

The strategic evaluation process provides the organisation a set of both qualitative and quantitative criteria against which the performance of both individuals as well as the organisation can be measured. The qualitative criteria contain soft factors like skills, competencies and flexibility whereas the quantitative criteria contain more hard factors like the return on equity, ROI, profitability, etc.

2) Helps in Analysis : 

The basic premise of strategic evaluation is that the environment of the organisation is dynamic. Some amount of variability between the performance and the standard is natural and expected. Regular exercise of 'strategic evaluation helps the organisation to gauge the success of the adopted strategy and to incorporate any changes where required. A positive difference between the performance and the standard will show that the strategy is working and the organisation needs to carry on what it is doing whereas a negative difference will mean that there is a shortcoming in the strategy and that changes need to be made.

3) Corrective Actions : 

The organisation can take remedial action on their points which are identified weak areas by strategic evaluation. For example, if it emerges that the lack of skills of the employees is a major hurdle behind the failure of the strategy to meet objectives, then a massive training program can be initiated by the organisation. Similarly, if it is found that the organisation has set unrealistic sales targets, then course correction can be attempted. 

4) Reassessing Goals : 

The evaluation of the performance of the organisation could also lead to a questioning of the goals and objectives of the organisation. For example, the under performance of a team to implement the strategy could be due to factors like lack of team support, change in market dynamics or faulty strategy definition.

5) Alerts from Threat : 

Strategic evaluation also makes the organisation future ready. It identifies issues and problems in the initial stage so that the organisation can take steps to tackle the same in the first step itself before they become too big to conquer. Strategists need to combine the virtues of patience and rapid action.

Symptoms of Malfunctioning of Strategy

The following are some signs that the strategy of the organisation is not working :

1. Company is not performing as well as other companies or the industry.

1. The company is repeatedly not meeting the objectives like Return on Investment (ROI), profitability, market share, etc.

1. Corporate culture is not in sync with strategy.

1. The strategy is not being implemented properly.

1. There is a lot of infighting and organisational conflicts in the organisation.

1. The management of the organisation is a chronic under performer despite changes being made.

1. All departments in the organisation are not meeting their goals. While some are performing others are failing.

1. The top management of the organisation is regularly involved in issue resolution and policy problems.

1. The resources of the organisation are being overtaxed.

1. The organisation is taking very high levels of risk for lesser rewards.

1. Strategy is not in sync with changing environment.

1. The strategy implementation has been done with no consideration to the time horizon and generates the risk of being obsolete.