Strategy Framework: How to assess the performance of your strategy

by Cascade Team, on Sep 23, 2021

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Strategy is a living process. Organizations that are adaptive in their strategic plan are 79% more likely to have set up metrics and systems that enable quick evaluation of their strategy.

It’s meaningless to adapt your strategy if you haven’t figured out what works and what doesn’t. Organizations with adaptive strategies have tailored the review process of their plan to their individual needs. They have made reporting an organizational habit and have committed to it.

In this article, we’ll lay out the process of making your strategic process more adaptive and, through the success stories we’ve shared, you’ll find tips and ideas to apply to your reporting habits.

Align metrics with objectives

Objectives alone don’t drive execution

Most leaders know that setting SMART goals are essential to achieving results in their business. So they translate the focus areas of their organization into specific, measurable goals with a clear deadline.

However, this practice is not adequate to achieve the desired outcomes. If it was, then there wouldn’t be an “execution problem” in strategy.

Plans are populated with potential or desired outcomes. “Increase revenue by 20% by next quarter”, “Increase the conversion rate of our website up to 15% by December 31,” or “Lose 7 kg by April 31”.

These are all common goals, easy to measure, and intuitive. However, they’re only lag measures. They give you insight into past behavior and activities. They have no capability of telling you how the future will turn out.

If you hit your quarterly revenue goal, you have no guarantee that you will hit the next one, too. It’s indicative that you did something right, but not that you’ll keep doing it or that it’ll work the next quarter.

Although goal-setting is straightforward, determining the actions that lead to achieving these outcomes and executing them is a different story.

The teams that can’t find the necessary actions that drive the progress of their goals struggle and most likely fail to achieve them.

Most teams, however, are able to define exactly what they need to do to drive results. What constitutes their struggle is focusing on them. They get caught up in the daily, urgent matters and fail to act in what matters most.

That’s why it’s so important to define the actions and metrics that drive progress on each goal. Once the team adopts the belief that they will achieve their goals by doing those activities, they engage and focus on them.

It becomes easier to shift through the daily noise and focus on what matters.

Teams that pull through allocate uneven amounts of time and resources to doing the things that matter most. And that’s because of the metrics they use. They track what matters, the actions that drive progress.

💡Objectives and outcomes don’t work without aligned and focused actions.

The two qualities of aligned metrics

So, how do you define those actions that need disproportionate attention?

Although without smart goal-setting, no plan is feasible, its execution needs measures with two qualities: predictability and influenceability. Metrics with both of these qualities are called lead metrics.

Predictability means that the metric is capable of predicting whether or not you’ll achieve a certain goal. If the metric is progressing fast enough, then consequently, you will hit your goal.

Influenceability means that you can directly influence that metric. For example, if your goal is to “reach $12 million revenue” by the end of the year, then “reaching $1 million revenue per month” is not an influenceable metric. It’s predictive but not directly influenceable.

Instead, “offer an extra service on each sale” is a lead measure. You can directly influence it and it predicts whether or not you’re going to hit your goal.

First of all, it’s important to underline at this point that those measures are actions, not outcomes. If your goal is to lose weight, no matter how SMART you make it, you won’t achieve it unless you define the actions you need to take. 

Following a diet and exercising are obviously those necessary actions.

True, but they’re also poorly stated that way. If it was so simple, everybody would lose weight with little effort. But, that’s not the case. Not everyone achieves weight loss by simply committing to it.

To succeed at your goal, translate the actions into more specific and measurable activities. Instead of saying “I’ll exercise more,” start measuring how many times you go to the gym. Or start measuring how many miles you run per week.

What makes those activities so much more effective is that they force you to measure actions you can directly influence. When your goal is to “go to the gym three times per week,” it’s easy to find three days in your calendar to schedule it. You can’t do the same with the aspiration “I need to exercise more.”

These activities are also far more powerful in predicting whether you’re going to meet your goal and lose weight. If you are hitting your weekly goal consistently of getting three times to the gym, then you don’t need to step on the scale to know whether you’re losing weight. Nor would you dread to do it.

If your goal is to write a book, a lead measure that determines your success could be the hours of undistracted work you dedicate each week or the number of words you write per day. Both you can directly influence and they are predictive of whether you’ll hit your goal on time.

💡The difference between execution and hope is lead metrics and focus.

Success Story

The Georgia Department of Human Services employs tens of thousands of employees and handles a billion-dollar budget. In 2004, B. J. Walker was appointed to run the department.

One of the key moves was to enforce a system that took away the focus from lag measures that state entities were using and brought it to lead measures. She transformed the way managers were leading.

She closed the gap between the vision and the front line and enabled the Georgia Department of Human Services people to act on what really mattered proactively and effectively. The department managed to reduce the repeat cases of child maltreatment by 60%.

The Cascade platform provides unique visibility on the goals and KPIs of every strategic initiative. You can easily observe your metrics and replace them with more specific, predictive, and influenceable ones. 

Demo Cascade  The world's #1 strategic execution platform. Create a best-practice strategic  plan, share it with your team, and ensure it’s on track with intuitive  dashboards and tools. BOOK A DEMO

Report on what matters & commit

Determine your individual reporting needs

You can’t succeed if you’re not evaluating the performance of your strategy. A big part of treating the execution of your strategic plan as a learning process is its review.

The first thing you need to determine is the most important metrics you need to regularly pay attention to. The reality is that you can’t follow every single thing you track.

The good news is that you don’t have to. Regardless of your industry, a few crucial metrics can paint a clear picture of the progress of your organization’s strategy.

Determine what these are ahead of time. As soon as you have your strategic plan ready, define the few crucial metrics you’ll be regularly reporting before the meetings are scheduled.

You can’t be deciding at the last minute what is reporting-worthy or not. If it isn’t clear by then what you should be tracking, then you’re not engaging with your organization’s strategy enough.

While you’re defining the crucial metrics, determine the frequency of your reporting needs. Not all metrics are meant to be reported at the same time. Find out the interval for each crucial metric that makes reporting it meaningful.

That is to say, it’s indicative of progress during that time interval and at the same time, it’s not neglected due to inertia.

💡Define the few critical metrics from the start and how often you should review them.

Balance the objective with the subjective

Choosing objectives, metrics and projects is not the whole story. Many of these derive from judgment calls.

Once these things have been chosen, people will try to align their activities with them. So, if the objectives and metrics you choose are not the right ones, people’s alignment will be wasted.

Therefore, the facts and the judgment calls must be accompanied by a story — the argument and the thought process that led to that call.

Facts and data are never enough. They need a human touch to interpret them. And the right interpretation, the right story, builds great strategies and great stories. That’s the reason people are so important in business. They make the judgment calls.

Balance the objective facts and numbers with the subjective stories and arguments of your people. Have them express their view so you can get a clearer image of how things are progressing.

Commit to regular reporting

The actions that we have described above are a few steps further than what the majority of organizations are doing.

However, none of these will make any significant difference to the execution of your strategy if you don’t exercise one simple quality: commitment.

That is by far the most underestimated principle of assessing your strategic plan. Letting go of regular reporting is the most common mistake businesses make and one of the most costly. 

By committing to regular reporting, you manage to stay on top of your plan. Even if your commitment is to something small or simple, it goes a long way in building alignment amongst your teams.

Through commitment, the metrics will become powerful reminders that push people to focus on what matters most. It’s not that people can’t tell what’s noise in their day-to-day work, it’s that they don’t act on what matters enough.

💡Commitment to regular reporting on a few crucial metrics leads to focus and alignment.

Success Story

One of our clients, Proven Investments has used the platform to improve its tracking and reporting capabilities. The people in Proven Investments had trouble efficiently reporting on their strategic initiatives and reviewing their strategic plans at the subsidiary and group levels.

Since they adopted Cascade as their strategy execution platform, they have enjoyed aligned, focused, and efficient team contributions to their strategy. And when it comes to reporting, Nerisha Farquharson, the company’s Proprietary Funds & Financial Services Vice President, said “Cascade allows us to instantly run executive-level reports and views that replace the old and tedious preparation process almost entirely.”

Focus on what’s next

The fundamental qualities of reporting

Since you are committed to regularly reporting on the most important metrics of your business, you must do so in a manner that induces meaningful decisions.

The most fundamental quality of a great report is its clarity. Effective reporting doesn’t include shifting through clouds of irrelevant information. Nor a struggle to connect the presented values to operations and departments.

Effective reporting is concise, clean, and easy to read.

Accuracy is the second fundamental quality of a great report. If a report is clear but delivers unreliable information, then it is useless. It can’t inform decisions or be used to assess the performance of the strategy.

Many important aspects of an organization are indeed hard, time-consuming, labor-heavy, or plain impossible to accurately keep track of.

For example, tracking whether the workers in a factory wear their protective gear as per the regulations is very labor-heavy. On the other hand, it’s the most accurate metric of safety incidents.

Thus, it’s imperative to find alternate ways to include them in your strategy evaluation process, like trusting your people to honestly keep track of certain activities they do.

💡Make your reporting clear, accurate, and holistic.

Analyze your results and focus on the next steps

Every reporting meeting needs to have a predetermined agenda. Decide ahead of the meeting what will be presented and what are the challenges you’re tackling.

Never start it with an unclear agenda or unset finish time. Force the conversation to remain focused on the matter at hand.

Compare the results week to week, month to month, or any other period that makes sense to your organization. Dissect the results and figure out the actions that drove progress or stagnation.

Diagnose any problems that you’re facing and ask tough questions. Tough, not personal. A tough question sets clear expectations of the answer. It doesn’t attack anyone and it shouldn’t.

Otherwise, it creates distraction and urges people to hide mistakes or shortcomings. That would be detrimental to the accuracy of the report and that is not something that you need at that time. Or any time, for that matter.

Apart from comparing internal metrics and results, you should always include some external benchmarks in your performance evaluation. For example, your sales might have increased month to month, but not as much as the industry’s overall performance indicates.

Armed with that knowledge, you can correctly identify the short increase as a problem indicator instead of a success indicator. That’s why it’s valuable to benchmark with external metrics.

Once you have reviewed the progress of the previous period, veer the discussion towards the next steps. Once the meeting has ended, everyone attending it should be able to answer with ease the questions “What are our next moves?”

Only with an unbalanced orientation towards what’s essential can you drive the successful adjustment of your strategy. The intense focus on acting on the few crucial matters separates the organizations that adapt their strategy and those that remain stagnant.

💡Get the right insights from your reviews and focus on acting on them.

Success Story

NASA is the most famous government agency in the world. And for a good reason. Nasa has achieved some remarkable feats, like landing the first human on the moon.

The agency’s remarkable achievements are partly due to its relentless focus on the next action. When, for example, they were tasked with the first moon landing, everything else became less significant.

Everyone was focused on executing this project and our next steps to getting closer to our goal. It wasn’t hope or luck that got us to the moon. It was an intense focus and disproportionate attention to the next necessary actions.

In our platform, the users can import their own tasks and KPIs and break their projects into actionable items. The difference to task managers is that every item is aligned with its respective project and progress is automatically updated.

Question relevance

Focus starves the unimportant

It’s inevitable that during your reporting meetings, certain goals will be behind. At some point, you will be faced with metrics that have slowed, stopped, or even decreased.

If you’re focusing on what’s important and executing the essential activities, you should not haste into believing that there is a problem. 

If you’re following the guidelines we described above, you’re inescapably allocating your resources unevenly. This means you are starving the parts of your business that yield low returns to nurture those that yield higher returns.

Therefore, if certain metrics and results repeatedly suffer over time, then they’re probably not relevant. If they were, then you’ll be focusing on them.

Of course, there isn’t a perfect process or plan. There might indeed be a problem that has invaded you or that certain activities are neglected.

However, the principle still stands. Whenever a few goals or metrics are not performing well, question their relevance. Ask yourself whether you should be tracking these and what value they represent for the organization.

New things are a threat to your focus

If you focus on what brings the most value, then everything else is expected to fall behind.

However, the most persistent and powerful obstacles that will violently try to claim and divert your focus are the new things that will come up.

You’ll need to be constantly on the lookout for every shiny, brand-new opportunity that arises. Fresh ideas and new and “better” ways of doing things will come up that will demand your resources.

They will lay claim to your time and attention. They will try to disrupt your focus with the pretense of an “emergency.” These are your biggest threats to aligning your actions and metrics with the desired outcomes and aspirations.

Whenever those threats appear, question them. Be intentionally negatively biased towards them because they’re tempting. Dissect them and be very hesitant to adopt them.

💡Question the relevance to your plan of everything that demands your attention and resources.

Success Story

Steve Jobs, the founder of Apple, once said, “Deciding what not to do is as important as deciding what to do.”

His ability to focus immensely on the few crucial things enabled him to build a lasting and successful company.

He taught his top employees the importance and necessity of focusing immensely on just a few projects and objectives. He knew that trying to take hold of every new, shiny opportunity would drag the company and its people down.

In Cascade, every goal’s current status is easily visible. In a matter of a few clicks, you can determine the goals and KPIs that are overdue. This allows you to start a review process to check its relevance to its respective plan.

A quick summary

Your strategy is an iterative process. Bring it to life by reviewing it and adapting it. Below, we have collected our guidelines for evaluating your strategic plan, so it leads to focused action and alignment:

  • Define lead measures to drive progress on your goals
  • Determine and commit to your reporting needs
  • Extract the right insights from your reports and act on them
  • Question anything that diverts you from the plan

In our next and final article on our strategic framework, we’ll discuss how to refine your strategy and accelerate your teams.

If you want to improve the evaluation process of your strategy, book a demo with us.

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