In this article, we’ll walk you through the various components of a strategic control process and how an organization might apply them.
Strategic control is a way to manage the execution of your strategic plan. As a management process, it’s unique in that it’s built to handle unknowns and ambiguity as it tracks a strategy’s implementation and subsequent results. It is primarily concerned with finding and helping you adapt to internal or external factors that affect your strategy, whether they were initially included in your strategic planning or not.
The various components of the strategic control process generate answers to these two questions:
In many senses, strategic control is an evaluation exercise focused on ensuring the achievement of your goals. The process bridges gaps and allows you to adapt your strategy as needed during implementation.
In contrast to the large amount of data and extended time frame required for strategic controls to take effect, operational controls monitor and evaluate day-to-day functions to correct any problems as soon as possible. Operational controls may be either manual or automated, and can involve people, processes, and technology. When successful, they flag potential risks, identify misalignments between plans and actions, and effectively implement changes to stay on course with your strategy.
For example, if there are technical malfunctions or performance is below expectations, operational control processes can initiate a course correction quickly. This could include updating an IT system or retraining particular employees, respectively. Or, imagine a factory that produces widgets. If the number of widgets drops below expectations or the error rate rises above expectations, a process control alert should be triggered to make the proper operational change.
Strategic control, on the other hand, might then evaluate whether your hiring criteria and employee onboarding processes need adjustment in order to achieve your strategy.
There are four primary types of strategic control:
Every organization creates a strategy based on certain assumptions, or premises. As such, premise control is designed to continually and systematically verify whether those assumptions, which are foundational to your strategy, are still true. These are typically environmental (e.g. economic or political shifts) or industry-specific (e.g. new competitors) variables.
The sooner you discover a false premise, the sooner you can adjust the aspects of your strategy that it affects. In reality, you can’t review every single strategic premise, so focus on those most likely to change or have a major impact on your strategy.
This type of control is a step-by-step assessment of implementation activities. It focuses on the incremental actions and phases of strategic implementation and monitors events and results as they unfold. Is each action or project happening as planned? Are the proper resources and funds being allocated for each step? This process continually questions the basic direction of your strategy to ensure it’s the right one.
There are two subcategories of implementation control:
This is the assessment of specific projects or thrusts that have been created to drive the larger strategy. This early feedback will help you decide whether to continue onward with the strategy as is or pause to make adjustments.
You can pre-determine which thrusts are critical to the achievement of your goals and continually assess them. Or, you can decide which measurements are most meaningful for your thrusts or projects (such as timeframes, costs, etc.) and use that data as an indicator of whether a thrust is on track or not, and how that may subsequently affect the strategy.
During strategic planning, you likely identified important points in the implementation process. When these milestones are reached, your organization will reassess the strategy and its relevance. Milestones could be based on timeframes, such as the end of a quarter, or on significant actions, such as large budget or resource allocations.
Implementation control can also take place via operational control systems, like budgets, schedules, and key performance indicators.
When something unexpected happens, a special alert control is mobilized. This is a reactive process, designed to execute a fast and thorough strategy assessment in the wake of an extreme event that impacts an organization. The event could be anything from a natural disaster or product recall to a competitor acquisition. In some cases, a special alert control calls for the formation of a crisis team—usually comprising members of the strategic planning and leadership teams—and in others, it merely means activating a predetermined contingency plan.
Strategic surveillance is a broader information scan. Its purpose is to identify overlooked factors both inside and outside the company that might impact your strategy. This process ideally covers any “ground” that might be missed by the more focused tactics of premise and implementation control. Your surveillance could encompass industry publications, online or social mentions, industry trends, conference activities, etc.
This graph clearly depicts the application of the four techniques for strategic control and how they function alongside each other:
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.
Learn everything you need to know about Balanced Scorecards in this article.
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.