Brief Information On Strategy Evaluation

The goal of strategy evaluation is to uncover any limits that may exist in implementing strategies and/or to detect deviations. It is evident that when a strategy is established, it is impossible to anticipate all the difficulties and events that may occur in the future during the implementation stage. As a result, managers must analyse the process of implementing a strategy before revising it or fine-tuning the execution methodologies. 

What is Strategy Evaluation?

Strategy managers must regularly analyse and track the progress of the strategic actions taken to implement the strategy. 

The part of strategic management in which managers endeavour to ensure that the strategic option is correctly implemented and fulfils the enterprise’s objectives is known as strategy evaluation.

In this, managers analyse or appraise the performance progress of implementing strategy, attempting to identify any deviations in actual performance from the selected strategy that has been implemented. Finally, appropriate actions are taken to make the strategy work.

Why The Need for Strategy Evaluation and Control?

Strategy managers must analyse and track the progress of the strategic actions taken to implement the strategy regularly. 

Systematic review offers adequate knowledge for identifying any gap between actual and planned activities. Managers can then take necessary actions based on this information.

The need for strategy evaluation and control is discussed in the following points:

1. Getting data for remedial actions: Businesses operate in ever-changing contexts. Internal and external forces change at a rapid and dramatic pace. These modifications have an impact on the strategy’s implementation. Regular evaluation of the plan as it is implemented gives useful information for taking the right actions.

1. Maintaining track of activity progress: Strategy evaluation aids managers in keeping track of the organisation’s progress in strategy implementation. If growth appears to be slow, something goes wrong, or new changes in the organisation’s external circumstances arise, it is necessary to take the right actions and make changes.

1. Identifying flaws: No one can guarantee that a strategy will work or that it is the most accurate strategy. As a result, the strategy should be scrutinised for faults. The managers determine whether the strategy works by reviewing the results and considering other prospects. If a fault in the strategy’s implementation is discovered, they take steps to correct it.

1. More proactive managers: Implementing an assessment system keeps managers in a systematic check, forcing them to recognise the significance of assessing the impact of changes in their organisations’ settings. It serves as a reminder to them not to rest on their laurels. It gives them the impression that today’s achievement is no guarantee of tomorrow’s success.

1. Creating a sense of commitment: When all managers and employees are involved in the process of continuously analysing strategy, they become committed to supporting the organisation in moving toward its goals.

The Characteristics of Effective Strategy Evaluation and Control

To be efficient and useful, a strategy-evaluation system must meet specific criteria. Following are the fundamental characteristics of a successful evaluation system: 

1. It should be economical: The actions associated with strategy evaluation must be cost-effective. Wastage will occur if they are not cost-effective. To gather information, a balance must be struck between getting too much and getting too little. Too much data and too many controls frequently cause more harm to an organisation.

1. It should have meaning: An effective strategy-evaluation plan must have meaning such that it must be tied to the goals for which the strategy was chosen.

1. Providing valuable data: The data gathered during the evaluation process must be sound. Managers can’t make decisions based on redundant information.

1. Providing information on time: The evaluation process should be set up in such a way that it can offer timely information. Information that is not delivered on time may be considered void since it cannot be used when it is needed.

1. Providing a complete picture of what transpired: The activities should be able to give a factual picture of what is going on in the organisation when it comes to strategy implementation.

1. Redirecting to the appropriate people: The system should be able to redirect to people who are responsible for taking data-driven actions. As a result, rather than simply supplying information to provide it, it should aim to facilitate.

1. Extensive and detailed: The strategy evaluation process in large enterprises should be extensive and detailed. Because there are so many departments and divisions, excellent coordination is required.

Strategy Evaluation Example

For example, the following companies are all undergoing strategy changes with global implications:

• With 26 plants throughout the world, Massey-Ferguson is contending for leadership in the farm-equipment market.
• The leading producers of electrical equipment in the world, General Electric and Westinghouse Electric Corporation are transforming their policies.
• Singer Sewing Machine Company is trying to maximise the value of its extensive assets.

 Conclusion

We understand from the topic of strategy evaluation and control that managers cannot avoid the task of analysing strategy. If they manage to escape, they will almost certainly fail. In light of this, we have emphasised the importance of strategy evaluation by discussing several key factors. The components of an effective strategy evaluation system, as well as the process of making remedial modifications, can be studied in-depth by the reader. Further, several techniques for strategy evaluation such as gap analysis, SWOT analysis, value chain analysis etc. can be explored.