Strategic Planning Maturity Assessment
Adrian Brudan
General Manager - The KPI Institute & GPA Unit (Strategic Planning, Performance Management, KPIs, Performance culture)
Overview
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A strategic planning maturity assessment supports the competitive advantage of the organization and provides valuable information about the right tools, processes, and people in the right place. It also helps organizations identify the maturity level of their strategic planning capability and helps them progress from one maturity level to another. The maturity assessment helps elevate current practices to best practices and supports tracking progress with initiatives designed to improve the strategic planning process.?
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The performance maturity assessment outputs highlight both the strengths and weaknesses of the strategic planning process. The goal is to identify current practices and provide solutions where there's a need for improvement.
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The maturity assessment follows 6 key knowledge areas to provide the complete result of the Strategic Planning Maturity Assessment:
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As a research-based organization specializing in business performance, we are interested in the way companies use Strategy Management Systems, in the challenges they face, as well as, their latest practices in strategy execution. The State of Strategy Management and Key Performance Indicators Report highlights findings from The KPI Institute’s ongoing efforts to identify the issues, trends, and best practices impacting the field of strategy and performance management with companies in the GCC region. Here are some of the results and observations:?
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68% of professionals agree and strongly agree with the fact that the organization they represent is effective in formulating strategy.
66% of the professionals participating in the survey agree or strongly agree with the fact that managing strategy is primarily about managing change. However, this is additionally supported by a lesser percentage of respondents – 58% - who claim that they proactively monitor the external environment to identify threats and opportunities.
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Maturity Model Framework
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The maturity model is a tool we have developed to give organizations a chance to know exactly where they stand. It is a tool used to assess the complexity of a certain organizational capability or system. In this case, we are talking about the Strategic Planning capability. For all our performance maturity assessments, the complexity is reflected on a five-level scale. Starting from level 1 – Initial, level 2 – Emergent, level 3 – Structured, level 4 – Integrated and level 5 - Optimized.??
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A particularity of the maturity model and the reason behind its effectiveness is the clear criteria defined for each maturity level, based on over 10 years of research and our practical experience in the performance management field. Another very important aspect is that progression from one level to another becomes more difficult as maturity increases. Specifically, it is easier to go from level 1 – Initial, to level 2 – Emergent, than going from level 3- Structured to level 4 – Integrated, because the requirements to achieve that level are higher.?
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The maturity assessment needs to be a thorough objective assessment; therefore, we start by doing an Evidence-based Assessment. This Evidence-based Assessment relies on statements reflecting best practices rated by a Certified Performance Audit Practitioner on a scale from 1 to 5, based clear assessment criteria for each statement. The Perception-based Assessment uses a survey scoring methodology. It consists in a survey sent to internal stakeholders going from Top Management, Middle Management, Unit heads, supervisors, and the ones who work with performance management systems every day – KPI owners and Data Custodians. The Perception-based assessment, relies on a survey and contains statements just like the Evidence-based assessment. It contains statements that reflect best practices and they must be rated on a scale from 1-5 based on the extent to which they apply for the organization. The third component, and the last stage of the maturity assessment process, is the Interview-based Assessment. From our experience, there are statements both in the Evidence-based Assessment and Perception-based Assessment that can be, or should be, further discussed with key stakeholders. The Interview-based Assessment is designed to help the performance maturity assessment practitioner clarify the findings, consolidate the findings, and provide relevant recommendations.?
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The Evidence-based Assessment, in the case of the Strategic Planning Maturity Assessment, contains more than 25 statements that must be scored on a scale from 1 to 5 by the Performance Audit Practitioner, based on clear assessment criteria for each statement. For the Perception-based Assessment, there are more than 25 statements, scored on a scale from 1 to 5 by internal key stakeholders, based on the extent to which they apply for the organization. The Interview-based Assessment – the last component – relies mostly on individual interviews with selected key stakeholders, to ensure consistency in results.?
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The scoring methodology is very simple, easy to understand and easy to apply. The Evidence-based Assessment score is an average of the scores of the rating for each statement and weighs 75% in the final score. The Perception-based Assessment score weighs 25%. Based on the final score, the Strategic Planning capability achieves a certain maturity level, going from Initial to Optimized.
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Key knowledge areas?
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To expand the subject of key knowledge areas and their importance, we will proceed to a broad explanation, exemplification, and inclusion of a few assessment criteria.
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Strategy Envisioning refers to the identity elements of an organization such as vision, mission, and values. We examine how they relate to this purpose and provide the sense of direction towards the desired state of evolution. We evaluate if they are embedded in the employees’ behavior because, after all, this is the purpose – driving performance. Here’s an example from the Evidence-based Assessment: “The mission reflects why the organization exists and its purpose.” The assessment criteria are:
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An example from the perception-based assessment is: “The mission statement provides both front line employees and the management a strong sense of direction and priorities.”???
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As a next step, we assess Strategy Formulation which reviews how the strategic planning process takes place. What stakeholders are engaged and which instruments are used to perform the external environmental scan to define the current state of the entity. An example statement here says: “The strategy formulation process is well articulated and thoroughly documented.” This reflects a best practice. And since it is an Evidence-based Assessment, the assessment criteria are:
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Strategy Focus provides an overview of the practices used to convert strategy into simple actionable objectives. We look at how KPIs are assigned to track objectives’ achievements and to connect the plans with actions.?
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The review of Strategy Articulation indicates if the strategy is aligned and integrated across all levels. We look at the tools and instruments used in the implementation process.?
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Strategy Review is about the ability of the entity to adapt to changes and keep updating strategy as the market and the customers change. And we do a thorough review of the process and the stakeholders involved in this review process.?
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The last key knowledge area is Strategy Governance and Communication - this reflects the efficiency of the strategy communication process.?
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Outputs?
As mentioned before, we are not only highlighting the weaknesses of the performance management system – in this case, the weaknesses of the Strategic Planning capability – but ? also the strengths. First, there is a maturity assessment report that highlights the findings and has clear recommendations for performance improvement. This contains what we have identified, positive aspects, negative aspects, based on the assessment criteria. Beside the maturity assessment report, client organizations also receive an executive dashboard, which is a visual representation of the scores achieved for each section, for each dimension, for each maturity model framework used.?
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The maturity assessment report provides organizations with information on achieved performance, what needs improvement, weaknesses, and it provides you with recommendations – what to do next. The Roadmap for Continuous Improvement report goes from what you should do to how you should do it. And it contains clear actions that the organization can take to improve performance, this being the ultimate target of the Strategic Planning Maturity assessment. The Roadmap for Continuous Improvement Infographic provides a graphical representation of the summarized recommendations found in the report. If you have chosen to do something to improve the process, you need to monitor that initiative. And it is easier for you to do so if you have this infographic in hand during performance review meetings.?
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Another output is the Certificate of Recognition for the assessed capability. Each client organization that goes through the maturity assessment will receive a Certificate of Recognition with the achieved maturity level.?
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Online platform
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The GPAunit.org online platform facilitates the audit process both for the client organization and for the Performance Audit Practitioner. It is used by the assessor to rate each statement from the evidence-based assessment according to the assessment criteria. There is a dedicated field for observations that can be included in the audit report and a field for references to documents, to keep track of what documents provided the information needed to rate each statement.
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The GPA Unit platform also supports this Perception-based Assessment as the survey is deployed directly from the platform. The Performance Audit Practitioner uses the admin section to see the user results list and to export the answers.?
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The online platform automatically calculates the average value assigned to each statement, so it is very easy to consolidate the findings of the Evidence-based Assessment and the Perception-based Assessment.
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This article is based on the original content authored by Cristina Mih?iloaie, published by The KPI Institute, and has been adapted for the purpose of this publication.?
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Take the next step to transform your strategic planning approach by enrolling in our Micro- Certificate in Strategy Planning Maturity Assessment and pave the way for strategic excellence.
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For any inquiries or further information, feel free to reach out:
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Adrian Brudan
General Manager - TKI EMEA
Email: [email protected]
LinkedIn Profile: adrianbrudan
WhatsApp: 004 0721 233 084