How to Measure Strategies

How do you measure success with strategies? This is one of the issues all leaders face. It seems at first more difficult than measuring the progress on a goal, for example. With a goal there is a final measurement (e.g. 5% improvement in something, 10% increase in something) but a strategy is an activity. A strategy is a behavior, process or structure aimed at evolutionary success.

Let's say that your strategy is a pricing strategy, "Keeping our rates at or marginally below the competition." A measuring device could be a journal, of sorts, a notebook or a scrapbook of clippings that chronicle competition's rates and yours.

The measurement of a strategy is first that actions are taken in accord with it, and second, that those actions worked to improve your business. In this case, first, you are actively looking at the rates in the market place. The specific actions you decide to take in this strategy could be identified on your rate sheets that you can later set next to the journal of competitor's rates.

Execution of the strategy would probably be rate adjustments based on the average of competitors' rates, or the general movements of their rates. That execution is evidence the strategy is being followed. A well executed strategy should be positive to the organization's performance. Poor execution under the strategy could make a perfectly good strategy appear to be the wrong strategy.

There need to be adequate records to help you know if the strategy is okay, while the execution was not. In other words, when performance is below expectations, don't automatically assume the strategy is wrong; examine executions under the strategy and evaluate each of those first.

Execution of this fictitious (though maybe common) strategy is simple enough. If company performance does not maintain or improve in spite of good execution, maybe it's the strategy. If your organization is not as efficient as your competitors' this strategy could be disastrous. Research of competitor economics should precede adoption of this and any competitor-linked strategy.