A. INTRODUCTION
SDS Consulting is skilled in supporting organisations in assessing and articulating their strategies. Our understanding of our client’s needs is rooted in careful analysis and an awareness of the socio-cultural context of their work. We believe that all organisational strategies should be constantly reviewed and revised. As the internal and external environments of an organisation change, so should the strategy to aid in the organisation’s survival and growth by constantly adapting in a dynamic environment.
B. WHAT IS STRATEGY EVALUATION?
Strategy evaluation is the process by which organisations assess how well a strategy plan has/is been implemented and its success. The process involves assessing the appropriateness of the strategy in the current environment of socio-economic, political, and technological innovations.
C. IMPORTANCE OF A STRATEGY EVALUATION?
SDS Consulting works with clients to ensure that the implementation of a strategy will help the organisation achieve its objectives. The evaluation step in the strategy management process helps in improving the strategy, distinguishing between what works and what does not, and contributing to the ongoing development and adaptation of the strategy to the changing conditions and complexities. In addition, strategy evaluation also helps in,
• Checking the validity of the strategic choices the organisation makes.
• Assessing whether the decisions made during the strategy implementation stage meet the intended strategy requirements.
• Providing insight and experience that can be used in reformulating or planning new strategies.
• Sheding light on issues caused by changes in the internal and external environment and take precautions and avoid making wrong decisions.
D. STRATEGY EVALUATION PROCESS
SDS supports its clients throughout the strategy evaluation process by comparing the actual performance of the organisation with desired results and provide the necessary insight into the corrective action that needs to be taken to improve the performance of the organisation. We have described the evaluation process below.
Step 1: Establish standards.
We start by determining what standards to set, how to set them, and the terms used to express the standards. To do this, we identify: –
• The key areas of performance which are usually based on the key performance areas pertaining to strategic requirements. Standards should be set within these identified key performance areas.
• The special requirements needed to perform each of these key tasks can be used to determine the type of standard to be set.
• Performance indicators that can satisfy these special requirements can then be identified for evaluation. These indicators are set based on quantitative or qualitative criteria to make measuring performance easier.
o Quantitative criteria – With quantitative criteria, performance can be evaluated by comparing how the company has performed against its past achievements.
o Qualitative criteria – With qualitative criteria, performance is evaluated by assessing factors such as core competencies, capabilities, risk-bearing capacity, workability, and flexibility.
Step 2: Measure Performance.
Measuring provides a snapshot of the outcomes achieved relative to the milestones created. SDS supports clients to set clear and quantifiable goals at the onset, we then use the set goals to serve as the benchmark against which the actual performance is evaluated.
Step 3: Analyse Variances.
SDS understands that it is important as part of the strategic evaluation process to analyse achievement and shortcomings. We analyse variance both quantitatively and qualitatively where we calculate the degree of variance and look at why the client has exceeded set goals or has fallen short. Evaluating the actual performance against the set goals will reveal whether: –
• The actual performance matches the budgeted performance.
• The actual performance differs from the budgeted performance in a positive way.
• The actual performance differs from the budgeted performance in a negative way.
Step 4: Take Corrective Action.
SDS works with clients to take corrective actions by one, re-formulating the strategic plan, this might require starting at the beginning of the strategic management process. And Two, development of multi-annual strategies for the entire organisation and individual programs. We do this through facilitation of brainstorming sessions, workshops, and stakeholder consultations. We ensure that the strategy implementation and accountability plans are connected to M&E systems, collaboration tools, the Theory of Change and existing or future work plans.
E. STRATEGIC EVALUATION TECHNIQUES
The following are the basic strategic evaluations techniques that you can use to examine these factors and make well-informed strategic decisions.
1. Gap analysis. A gap analysis identifies and measures the gap between your current state of organisational performance and the desired state. It can be utilised to evaluate various aspects of the organisation.
2. SWOT analysis. A SWOT analysis assesses the current situation -both internal and external environments – of an organisation. It helps you gain insight into the internal landscape by analysing strengths and weaknesses, and insight into the external landscape by scanning opportunities and threats.
3. Value chain analysis. This analysis examines the set of activities the company performs to produce and market a product or service. It helps identify which activities are most valuable to the company and which needs to be improved to help perform better.
Compiled by,
Wanjugu Mathenge,
Project Associate,
SDS Consulting.
