Just came across a great piece, but curiously embedded in a McKinsey Quarterly article that seems to be about something else entirely – an update of how to decide what businesses should be in a corporate portfolio. The little gem is on the evolution of strategic management – which describes how strategy has evolved from a basically financial approach, through forecasting and then externally driven strategizing, to its ultimate, described as follows:
“When this investment [in strategic planning] is successful, the result is strategic management: the melding of strategic planning and everyday management into a single, seamless process. In this phase, it is not that planning techniques have become more sophisticated than they were in phase three but that they have become inseparable from the process of management itself. No longer is planning a yearly, or even quarterly, activity. Instead, it is woven into the fabric of operational decision making.” It goes on to point out that virtually no companies have reached this point, except perhaps some in the electronics sector, where very fast changes across multiple products and highly segmented markets make it imperative.
… but surely this should be our aspiration for all organizations? though as I have noted before, we are not likely to get to this point with strategy tools that are simply incapable of ever delivering this result.
i wonder if the strategic tools apart from lending themselves to such an integration will also provide indicators about the day to day/period to period performance of an implemented strategy. Now such a mechanism could give valuable & continuous feedback to the management and other stakeholders. Do you think there exist any generalized indicators for assessing the effectiveness of a strategy or do we rely on financial/organizational performance indicators only ?