Evaluating Strategy

By Bill Dann, BoardGrowth Founder

Those of you who have used our Vision Navigation® strategic planning process know that we include in each project the question of whether the effectiveness of the strategy can be measured. We call this part of the process “defining a metric”.  What we are trying to do here is not measure whether or not you have reached your goal or target for the project, but whether doing so made a difference.

How we came to this

Adding the metric to our process came about 15 years ago, when we began working with a new client and asked the board whether a certain strategy they were employing was effective.  The board’s goal was to improve educational outcomes for its shareholders, and they had chosen to use some of the organization’s profits to do so.  Their strategy was to invest in supportive services for their students on the campus of the state university.  They had been doing this for ten years.
We simply asked, “How is this going?” No one knew the answer.  We then asked, “How would you know?”. Answer, “By the number of graduates”.  Question, “How many have you had?”  Answer, “We don’t know”.  A bit of research was done, and the answer was “zero”.  Had they known this years earlier, no doubt the board would have urged management to alter the strategy to realize a return on their investment.

We continued to ask the question of other groups we worked with and often found the same results.  That is, board and management only knew if what they wanted to implement was, in fact, being implemented, but they hadn’t measured whether it was working.

So, we added the metric to our planning process and also added an Instrument Panel (a series of metrics to measure to overall health of the business) to our product offering.

Your responsibility

As responsible stewards of the assets or your organization, you need to know whether the strategies you are investing in are working.  If not, you need to revise or get off them.  If they are working, you should consider additional investment in them.  But, you have to have sound data to make this judgment.

An effective metric

A sound metric is one that measures frequently (preferably monthly) whether your strategy is working. Why monthly?  The real value of a metric is in giving you good data to evaluate your strategies early on, so that you know whether you are making a sound investment of time and money.

Here are some criteria to consider in developing a metric:

  • Choose to measure the “why” behind a strategy.  What is the purpose or “why” behind a strategic project on your plan?  Is the project serving that purpose?  For example, a “why” might be reducing staff turnover, and the strategy chosen to influence turnover is implementing flex time. Your metric would measure staff turnover before flex time and after to assess the impact of that strategic project on the “why”.
  • Choose to measure a specific strategy to assess its impact.  For example, let’s say you are implementing a new marketing campaign to attract new customers.  Choose a measure that can definitively show you whether your marketing campaign is bringing in new customers vs. some other factor such as word of mouth or a more aggressive sales campaign?  To do this, choose a metric that isolates out all the other potential reasons for a change in the numbers and gets to the effectiveness of your strategy alone.
  • Choose a measure that is cost-effective to produce.  For example If you are wanting to measure customer satisfaction through a customer survey, consider the cost to survey your customers on a frequency that will really help you.  If it is cost-prohibitive, determine a different, more cost-effective method to assess customer satisfaction.

The bottom line

As an exercise, ask yourself this question, if an investor, shareholder or source of grant funds came to you and asked you to make the case for why the organization should continue a strategy or program you are now investing in, could you answer the question with hard data?  If not, then you should talk with management about putting in place metrics to evaluate your strategies.

Although the math behind a metric can be intimidating, creating charts of significant strategic measures is important to knowing your success and progress toward your vision. We would like to help you set up a few key metrics for you to begin exploring this valuable tool.  If you are interested, contact us.