16.4. STRATEGY EVALUATION
The success of an organization's strategy can be monitored by tracking performance in relation to strategic objectives. Success implies these objectives are met or exceeded. If performance exceeds or lags behind the objective significantly, the organization would be wise to consider why. Thus strategy becomes not only a manner of guiding future action, but also of learning what works and what does not. Richard Rumelt (1980) points out, however, that while monitoring progress toward achieving objectives is important, this approach focuses on what has already happened. Thus he proposes a set of criteria that aids in evaluating strategy in terms of future viability. He proposes that four potential flaws in strategy be continually reviewed, in "an attempt to look beyond the obvious facts regarding the short term health of a business and appraise instead those more fundamental factors and trends that govern success." They are consistency, consonance, advantage, and feasibility.
Consistency asks whether the organization's objectives, policies, and programs are internally aligned.
Consonance asks whether environmental trends will sustain not just the organization of interest, but its entire industry.
Advantage asks whether the organization is superior to its rivals.
Feasibility asks if the organization has the quantitative and qualitative resources to carry out the strategy in the long term: Are finances and physical resources adequate? Does the organization have the problem-solving capability and coordination and motivation of key people requisite for implementing the strategy?
Applying each of the criteria on an ongoing basis can bring out flaws that can be addressed via redirecting objectives, policies, or programs.
Strategy is often described as much more of an algorithmic process than it is or, argues Henry Mintzberg, really should be. Mintzberg has long argued against the wisdom of treating strategy as a rational step-by-step process that begins with formulation and continues to implementation. His metaphor of the potter as strategist and clay as strategy leads to a much more organic process that allows for flexibility and adaptation. His crafting process joins formulation and implementation, and allows new information to enter in and redirect strategy. In his article "The Fall and Rise of Strategic Planning" (1994), Mintzberg contrasts two styles of managing the strategy process, the calculating style and the committing style. In the calculation style, the leader fixes on the destination and determines what the organization must do to get there; and focuses on bringing order to the organization. This style, however, assumes the future can be predicted, which is often a faulty assumption. Mintzberg prefers the committing style, which posits strategy as a less defined journey in which everyone helps shape its course. This approach is effective because a wider set of people—not only the leader—give the strategies meaning. He also makes an important distinction between strategic planning and strategic thinking. Planning, he argues, is an analytical function that is an input to strategic thinking. Versus only looking at hard data, Mintzberg's advocates learning from all sources, including softer and qualitative insights gained from experience. His admonition to "find strategy in strange places" seems particularly germane to organizations intent on being at the forefront of innovation.
Nadler (1994) has suggested that in many organizations too much effort is spent on strategic planning and not enough on strategic thinking. Inordinate amounts of time are spent on analysis and drawing up strategic plans that influence very little behavior and that cause no real changes to occur. The real value of strategic planning should be in the learning and development of a common frame of reference and the shared context for many decisions that are made in an organization over time (Nadler, 1994).