As an executive leader, you make strategic decisions that shape the direction and performance of your organization. But how do you evaluate the outcomes of those decisions and learn from them for future plans? In this article, we will explore some practical steps to help you reflect on your strategic decisions and use them as opportunities for improvement and growth.
Before you make any strategic decision, you need to have a clear and measurable criteria for success. This will help you set realistic and relevant goals, align your stakeholders, and track your progress. Your criteria should be based on your vision, mission, values, and strategic objectives, as well as on external factors such as market trends, customer feedback, and competitive analysis. You should also consider the potential risks, costs, and benefits of each decision, and how they align with your criteria.
One of the most important criteria in making any decision is the calculation of free cash flow. Very often, especially during economic downturns, free cash flow is much more important than profit. In the presence of cash flow, profits can be adjusted after the fact. With minimal cash flow, even 1000% profit can be very small. formula for calculation: FCF = TS - TVC - OE - delta I Where FCF - free cash flow, money that can be withdrawn from an organization or used for development without harm to ensure the current financial stability of the company, TS is the company's revenue, TVC - absolutely variable costs, OE - operating expenses. delta I - change investnents, any assets, except for money on hand and on current accounts.
After you implement your strategic decision, you need to review the results and compare them with your criteria. You should use both quantitative and qualitative data, such as financial reports, surveys, interviews, and observations, to assess the impact and effectiveness of your decision. You should also gather feedback from your team, your customers, your partners, and your peers, to understand their perspectives and experiences. You should be honest and objective in your analysis, and avoid confirmation bias or hindsight bias.
Based on your review, you need to identify what you learned from your strategic decision, both positive and negative. You should highlight what worked well and what did not, what surprised you and what confirmed your expectations, what challenges you faced and how you overcame them, and what opportunities you discovered and how you capitalized on them. You should also acknowledge your mistakes and failures, and how they affected your outcomes and your reputation.
Interestingly, as comprehensively researched as decision analysis is, in practice, its most critical component (refinement) seems to be seldom practiced to its full extent. This may be why so many decision processes seem to be lacking in reliability.
The final step is to apply what you learned from your strategic decision to your future plans. You should use your learnings to improve your processes, methods, skills, and tools, to enhance your performance and efficiency. You should also use your learnings to adjust your goals, strategies, actions, and resources, to better align with your criteria and your environment. You should communicate your learnings to your stakeholders, and involve them in your planning and decision making. You should also celebrate your successes and recognize your efforts, and foster a culture of learning and innovation in your organization.
If this strategic decision making is to be made into an iterative process, say quarterly for a group project leader, or a CEO, or similar, then there has to be a ranking process, rating process which tells you and your audience which suggestions or learnings or recommendations have yielded the highest positive impact. Otherwise, you may be "strategically" digging yourself into a deep hole of useless but very cleverly designed intellectual mental masturbation. Plus, it will take you 2 yrs to finally realize that. And, wait for it .... you need to find an AI deep learning engine or algorithm to construct your "rating engine" !