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Learn about the importance of strategic control during strategic implementation.
Table of Contents
Whether your organization is using one or all four of the previous techniques of strategic evaluation and control, each involves six steps:
What are the organization’s goals? What elements directly relate to your mission and vision? It’s difficult, but you must prioritize what to control because you cannot monitor and assess every minute factor that might impact your strategy.
What will you compare performance against? How can managers evaluate past, present, and future actions? Setting control standards—which can be quantitative or qualitative—helps determine how you will measure your goals and evaluate progress.
Once standards are set, the next step is to measure your performance. Measurement can then be addressed in monthly or quarterly review meetings. What is actually happening? Are the standards being met?
When compared to the standards or targets, how do the actuals measure up? Competitive benchmarking can help you determine if any gaps between targets and actuals are normal for the industry, or are signs of an internal problem.
Why was performance below standards? In this step, you’ll focus on uncovering what caused the deviations. Did you set the right standards? Was there an internal issue, such as a resource shortage, that could be controlled in the future? Or an external, uncontrollable factor, like an economic collapse?
Once you’ve determined why performance deviated from standards, you’ll decide what to do about it. What actions will correct performance? Do goals need to be adjusted? Or are there internal shifts you can make to bring performance up to par? Depending on the cause of each deviation, you’ll either decide to take action to correct performance, revise the standard, or take no action.
The entire strategic planning, implementation, and control process takes significant effort and thought. It requires a lot of buy-in from your leadership team. It also requires employees to understand why their actions are important and continuously work toward achievement of goals—even if those goals shift over time.
A Balanced Scorecard helps tie your overall strategy to those day-to-day activities, giving more clarity about the what and why of strategic implementation to the entire company. You’ll be able to do both operational and strategic control within one framework, linking the two processes and getting everyone on the same page.
The Balanced Scorecard approach can provide a clear prescription as to what companies should measure during implementation to enact strategic control.
Organizations that use a Balanced Scorecard to track and manage their strategy also tend to use Balanced Scorecard software—like ClearPoint—because it simplifies the data collection, analysis, and reporting tasks entailed in tracking performance.
But ClearPoint also serves as an effective strategic control tool. It includes multiple features that can help you better evaluate your performance and easily shift gears when necessary. For example:
You don’t need to spend hours combing through reports to understand your performance. In ClearPoint, you can use RAG status indicators to show progress at a glance.
For everything you need to evaluate—whether it has to do with an objective, a measure, or a project—you simply set a target (for instance, X% increase in your customer base) and ClearPoint will automatically evaluate and display your current status based on actual performance.
You can also dig into that evaluation and see the supporting metrics associated with it. Once any new data is uploaded, statuses change automatically.
Armed with this information, you could further investigate the causes of a red or yellow status marker.
It may require some thinking around how to resolve a particular challenge, or it could indicate a fundamental flaw in your target, supporting processes, or strategy.
KPIs are vital to understanding performance. In ClearPoint, you can use our measure data tables to track actual values against target values (as shown below), and even add additional columns to show variants. If some measures need adjusting, they can easily be changed.
You can also create KPI dashboards that consolidate all your KPIs in one place for a more holistic view. You can quickly identify which metrics have fallen below target and which ones are trending upwards, and move forward with quantitative information in hand to decide what's next.
All these options for tracking KPIs make it simple to identify problematic time periods and execution tactics, and dig deeper to address potential issues.
The BSC approach requires a deliberate thought process around your high-level goals (“objectives”), the actions you’ll take to reach them (“initiatives” or “projects”), and how you’ll know if they’ve been achieved (“measures”). These elements can be linked together in ClearPoint, so everyone knows how their work is contributing to the overall plan (and how well they’re performing).
For example, if one of your objectives is to become an employer of choice in your geographic area, you might have linked measures related to employee retention, employee satisfaction survey results, number of new applicants, etc.
If at any time your objective changes (or a measure or initiative is no longer serving your strategic plan), it’s simple to remove those linkages and create new ones in ClearPoint. (Imagine, for instance, that a global pandemic has widened the playing field for talent, making your geographic area less relevant.)
Below, you can see the measures associated with one of the objectives.
An important step in the strategic control process is to set standards—something you’ll compare your performance against. ClearPoint has a measure library that allows member organizations to view and automatically pull peer data into their accounts for calculations, charts, and benchmarking.
When you can see what other ClearPoint customers in your industry are tracking and reporting on, it may spark ideas for your own strategic plan for how to better your organization.
Putting strategic control in place is critical to a successful strategy implementation. Without proper controls, your strategy won’t have the gut checks required to ensure it remains relevant, on track, and performing at or above standards.
ClearPoint Strategy enhances your strategic control processes by providing a comprehensive platform that seamlessly integrates evaluation and control mechanisms into your strategic management.
Our software facilitates real-time data tracking, RAG status indicators, and customizable dashboards, allowing you to monitor and adapt your strategy with agility.
By linking objectives, initiatives, and measures, ClearPoint ensures that your strategic plan remains aligned and responsive to internal and external changes. Experience the efficiency and effectiveness of ClearPoint Strategy—schedule your personalized demo today.
Strategic control is important because it:
- Ensures Alignment: Keeps the organization’s activities aligned with its strategic goals and objectives.
- Monitors Progress: Provides a framework for tracking the implementation of strategies and ensuring they are on course.
- Identifies Deviations: Detects deviations from the strategic plan early, allowing for timely corrective actions.
- Improves Decision-Making: Supplies data and insights that inform strategic decisions and adjustments.
- Enhances Flexibility: Allows the organization to adapt to changes in the external environment effectively.
- Boosts Performance: Ensures resources are used efficiently and strategic initiatives are executed successfully.
The strategic control process involves:
- Setting Performance Standards: Establishing benchmarks and performance indicators aligned with strategic goals.
- Measuring Performance: Collecting and analyzing data on actual performance against the set standards.
- Comparing Performance: Comparing actual performance with the benchmarks to identify variances.
- Analyzing Deviations: Investigating the causes of any deviations from the standards.
- Taking Corrective Action: Implementing measures to correct deviations and get back on track towards strategic goals.
- Reviewing and Adjusting: Regularly reviewing the control process and adjusting strategies and controls as needed to remain aligned with organizational objectives.
Strategic control is the process of monitoring and evaluating the implementation of an organization’s strategic plan to ensure that strategic objectives are achieved. It involves setting performance standards, measuring actual performance, comparing it with the standards, analyzing deviations, and taking corrective actions to align activities with strategic goals.
A strategic control system is a set of procedures and tools used to monitor the implementation of an organization’s strategy and ensure that strategic goals are met. This system typically includes:
- Performance Indicators: Metrics that measure the progress of strategic initiatives.
- Feedback Mechanisms: Processes for collecting and analyzing performance data.
- Reporting Tools: Dashboards and reports that provide real-time insights into strategic performance.
- Corrective Actions: Procedures for addressing deviations from the strategic plan.
- Review Processes: Regular evaluations of the strategy and control system to ensure ongoing alignment with organizational objectives.
Effective strategic control systems are crucial in today's economy because they:
- Enhance Agility: Enable organizations to quickly adapt to market changes and competitive pressures.
- Ensure Resource Efficiency: Help in the optimal allocation and utilization of resources, reducing waste and maximizing returns.
- Drive Competitive Advantage: Allow organizations to stay ahead of competitors by ensuring strategic initiatives are executed effectively.
- Support Innovation: Foster a proactive approach to identifying and exploiting new opportunities.
- Mitigate Risks: Provide mechanisms for identifying and addressing potential risks early.
- Improve Stakeholder Confidence: Enhance transparency and accountability, building trust among stakeholders and investors.
