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Even well-thought-out strategies can go askew as they evolve and change during their implementation period. Therefore, it’s important that businesses…
November 30, 2021 | 4 mins read
Even well-thought-out strategies can go askew as they evolve and change during their implementation period. Therefore, it’s important that businesses have systems of evaluation and control in place to help monitor their performances. By establishing a strategic control process as a part of management, organizations can rethink strategies and take immediate actions in case of undesired or unintended outcomes.
The purpose of strategic control is to steer a business toward its long-term goal by controlling its strategic direction. Strategic control definition states that the process tracks a strategy during its implementation period and detects changes or problems that may affect the outcome. It then makes adjustments to avoid such problems. Let’s discuss the meaning of strategic control, the processes involved, its importance and strategic control examples.
Strategic control is a method of managing the execution of a strategic plan. It’s considered unique in the management process, as it can handle the unknown and ambiguous while tracking a strategy’s implementation and the subsequent results. In other words, strategic control is a way to find different methods of strategy implementation by adapting to changing external and internal factors to achieve strategic goals.
A strategy is usually implemented over a significant period of time during which two major questions are answered:
a. Is strategy implementation taking place as planned?
b. Taking the observed results into consideration, does the strategy require changes or adjustments?
The strategic control definition shows us that it’s an evaluation exercise focused on achieving the strategic goals set by an organization. The process is crucial in bridging gaps and adapting to changes during the implementation period.
Every technique of strategic evaluation follows the same method. Here are the six steps involved in the strategic control process:
Prioritize evaluation of elements that relate directly with the mission and vision of the organization and which can affect the organization’s goals.
Past, present and future actions must be evaluated. Setting qualitative or quantitative control standards help in determining how managers can evaluate progress and measure goals.
Measuring, addressing and reviewing performance on a monthly or quarterly basis can help determine a strategy’s progress and ensure that standards are being met.
Performance comparison is done to determine if an organization is falling short of the set benchmark and if these gaps between target and actuals are normal for that industry.
If there are deviations, managers have to analyze performance standards and determine why performance was below par.
If a deviation is due to internal factors such as resource shortage, then managers can act to sort them out. But if it’s caused by external factors that are beyond one’s control, then incorrect actions can worsen the outcome.
Traditional control concepts have to be replaced by the strategic control process, as it recognizes the unique needs of long-term strategies.
Let’s look at the importance of strategic control:
Strategic control can help measure organizational progress. As a strategy is chosen or implemented, an outcome is determined based on the likeliness. In strategic management, it’s important to measure results during and after implementation. This allows timely corrective actions as well.
Since strategic management is continuous, it helps in recycling actions that are essential for achieving the objectives of an organization. This acts as inputs for making adjustments and implementing them in other future processes.
A reward system based on performance that recognizes employees throughout the implementation period is crucial for performance, desired outcome and talent retention.
The purpose of strategic control is to let managers identify changes in circumstances and allow them to modify strategies.
Here are some examples of strategic control:
1. A courier business decides to boost performance by setting an on-time delivery goal of 100%. Managers are alerted by the control system as it automatically reports problems even if delivery rate falls by 1%. By using such a control strategy, the organization allows its managers to undertake immediate corrective measures for every delivery-performance issue that’s raised.
2. Consider a unit that produces widgets. If the error rate goes above the desired limit or the number of widgets is lower than expected, strategic control helps an organization evaluate the hiring criteria and employee onboarding to make necessary adjustments for achieving strategic goals of the business.
Managers must be fully aware of strategic control meaning to realize that it’s a steering wheel that they can use to navigate their organization toward its mission, vision and long-term goals.
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