What is the process for evaluating the success of a strategic decision?

All strategic decisions should align with the highest-level strategic statements: the company's vision and mission. It's essential to note that these statements are not mere corporate poetry; they serve as the guiding principles defining the company's purpose and its envisioned future state. If any of the strategic objectives deviate from the alignment with the company's mission and vision, they must be carefully reconsidered.

Defining success criteria based on internal goals, objectives and indicators is a good place to start. However, that analysis must take into account the commercial reality of the broader industry and the metrics that typically define corporate success and wealth creation. Understanding the macro industry factors that drive success - whether that be strategically, operationally or financially - should be the lens through which the internal criteria are generated. It is equally important to understand if those industry metrics are a short term flavor of the month or whether they are the key underlying variables that drive success - and that will be the most important part of defining the most appropriate company "success criteria".

This one is close to my heart because too often the leadership going into this new experiment is already too biased. Having clear success metrics, timeframe, and accurate way of measuring your performance will be key to a successful pilot. You need to be in a position where you can clearly state if you outperform (or underperform) your original goals. Additionally, underperforming may not be a bad thing because you've learned a lot along the way and many more initiatives to drive next! Tip: work with your data team to make sure that the sample you'll be testing will be large enough to scale. Have fun!

I like to apply design thinking principles and ensure that the initial problem is defined properly. When the strategy at hand is appropriately scoped, then the desired results and impact should be clear. Failure metrics are also important to consider - beyond defining success, it is important to scope out what should an outcome not look like, and when to pull the breaks.

How that decision impacted your team and therefore your members/customers. Is there another mechanism for recognition of decision making I do not know about? ;-)

The problem with analyzing data, especially the financial model data that drives most decisions, is that most models are deterministic (one input per cell for one output per cell) that does not reflect the reality of a complex, dynamic world. The sensitivity analyses developed from this approach do not ascribe probabilities to different outcomes meaning most decisions are best guesses. Using a probabilistic financial model, with a simple Excel add-in like @RISK, will allow those who analyze data to use real world data and relationships instead of the guesstimates and rules of thumb currently required to undertake our sensitivity analyses. Until we use a probabilistic approach, our analysis is sub-optimal at best and wrong at worst.

In different markets and economies across the United States, it has been helpful to evaluate the impact of a proposed strategy across several key drivers of the enterprise. Consider offloading excess office space resulting from post-Covid remote work force. 1) analyze SWOT of subject property benchmarked against commercial industry - approved metrics, not peer | industry group; 2) compare to market data and service - provider proposals on all related operating and moving expenses; 3) interview key leaders and to identify broad impacts on Financial, Operations, Culture, and Utilization, as functions of the Strategy; 4) drive implemention with alacrity, reporting continuously; 5) summarize post-implementation for executive input

Just as a stock market analyst evaluates portfolio performance, this is an important step. The analyst doesn't merely assess the absolute return but gauges it against market benchmarks, industry performance, and initial forecasts. Similarly, evaluate the outcomes of your strategic decisions and contrast against your initial target, competitive benchmarks, and market performance.

Reflecting and communicating strategic decisions can be difficult. Some workplaces actively discourage failure, and a high staff turnover can lead to lost knowledge. Developing transparency and psychological safety is key. People must feel comfortable openly discussing decisions and outcomes, without fear. If you use innovation platforms, clearly explain pursued and discarded ideas. Revisit choices to see if the right call was made. Another approach is appointing a 'Chief Knowledge Officer (CKO). They're responsible for creating, sharing, and applying lessons within the business to ensure the wider team can build continually on what's learned over time.

"The essence of strategy is choosing what not to do," said famed business strategist Michael Porter. It's essential to fine-tune strategy by continuously reviewing organizational goals, and comparing results against expectations. This helps you decide what you must do, and more importantly what you should stop doing. Data & analytics can be a compass in this journey to guide you in the right direction.

Strategic decisions shift direction and purpose. It's important to consider the impact on employees motivation and satisfaction. A strategic decision can impact the entire company culture positively or negatively. Extent to which the decision impacts risk, does it reduce risk or increase it, a strategic decision that boosts growth or profits may come with significant increases in risk. This needs to be considered in evaluating a strategic decision.

Strategic decisions must encompass risk and expect failures. The inability to do so is one of the reasons strategic growth rarely comes from within an organization. It is more often a reactive response to a competitive strike, disruptive technology, or new process. For example, if a society's goal is to provide education to all citizens, SMART decisions may not lead to a more educated society even though there may be a portfolio of results that are Specific, Measurable, Achievable, Relevant, and Time-Bound. A successful strategic decision process will embrace risk, accept failure, recognize successes, be fueled by continuous improvement, and understand that a successful result may be a solution that leads to another solution.

In addition to these considerations, it’s imperative to factor in the quality and availability of Human Resources when managing tasks, especially in small businesses or underdeveloped regions. The competence, training, and overall workforce capabilities are central to ensuring the efficiency and effectiveness of critical processes. Consequently, prioritizing and investing in human capital development is paramount for overcoming challenges and achieving success.