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Sunday , January 21 , 2018

Questions for Strategic Planners to Ask

By Paul Arveson

Aligning strategic initiatives to strategy is done through measurements of the performance of those initiatives. There is no other way. Therefore strategic planning and the measurement of strategy should go hand in hand.

It is widely understood that the balanced scorecard incorporates feedback loops in order to not only measure, but also to adjust, if necessary, the activities and their inputs (budgets) in order to improve mission success and mission value. Actually, there are as many as FOUR different types of feedback loops in operation when strategic management is fully operational. These are:

  1. Feedback around the performance of strategic initiatives (strategic feedback)
  2. Feedback around the internal operational performance (diagnostic or operational feedback)
  3. Feedback around the definitions of metrics (metrics feedback)
  4. Feedback around the design of measurement methods (methodology feedback)

This list is not intended to intimidate, but simply to identify the parameters that can be varied if necessary in the evolution of strategic management within an organization. In practice, one starts implementation simply with a fixed set of strategies, metrics and measurement methods that are based on "initial guesses" as to what will succeed. These guesses may be based on business cases, but these should be seen as predictions, not as hard and fast proof, otherwise we would not need to measure anything, or make any hard strategic decisions. There are too many uncontrolled variables for us to see the future with any "business case" clarity.

Initial questions to ask

To verify the design of the initial BSC, we could ask the following questions of every strategic initiative:

Alignment questions:

What is the strategic goal that is being addressed by this activity?

What organizational mission does it relate to?

Do we have a hypothesis as to how this initiative will eventually improve results (i.e. a strategy map)?

Baseline questions:

What is the existing level of performance? Do we know?

Are we collecting this data and storing it somewhere?

What are the statistical parameters of this data, e.g. how much random variation does it contain?

Cost and risk questions:

What is the existing cost of operation?

How much will that increase when we do the initiative?

What is the risk that this cost will be exceeded?

Is the money being spent on this initiative the best use of the funds, or is there a better usage?

What is the risk that the initiative will fail? Has this assessment been included in the planning?

Customer and Stakeholder questions:

Have you listed all the communities of interest that have a stake in this initiative?

Who are the kinds of customers/stakeholders who will benefit directly from this initiative?

Who will benefit indirectly?

Is the specified initiative the best way to increase satisfaction for all kinds of customers, or is there a better way?

How will we know that the initiative benefits these customers?

Metrics questions:

What metrics will be used to define the benefit?

Are these the best metrics? How do we know that?

How many metrics need to be tracked? If this is a large number (it usually is), what kind of system are you planning to use to track them?

Are the metrics standardized, so they can be benchmarked against performance in other organizations?

Measurement Methodology questions:

How will the metrics be measured? What methods will be used, and how frequently will data be collected?

Is this the best way to do the measurements? How do we know that?

Results questions:

How can we demonstrate that this strategic initiative, and not something else, contributed to a change in results?

How much of the change was probably random?

Lessons for Planners

Some of these questions should be documented in a good business case. Other questions should be addressed in a performance plan. However, unfortunately, plans are often written that address few, if any, of these questions. Why? Perhaps because of the dominance of program management in government. But strategic management and program management require different approaches. (See the essay on this topic here .)

In most cases, managers are eager to get started -- they form teams to gather ideas for things to do, projects and programs to initiate -- and may not get around to placing the initiatives into a framework of measurement-based strategic management. They get busy with new activities, but never learn how the ultimate mission or strategy is being affected; which initiatives are working and which are not.

This is the reason why (in the US Government) OMB and GAO keep asking agencies for performance plans, not just program plans. It takes discipline and patience to establish a true performance-based strategic management system.

©2002 Paul Arveson