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Strategy Evaluation Process: Comprehensive Guide + Examples

how to evaluate the effectiveness of a business plan

The process of strategy evaluation is often overlooked in the overall strategic management process . After the flurry of activity in the initial planning stages, followed by the reality check of executing your strategy alongside business-as-usual, strategy evaluation is often neglected.

When this happens, strategies quickly become outdated and out-of-sync with the changing face of the organization.

On the contrary, when an efficient strategy evaluation process is set in place, businesses can benefit from insights and learnings from past performance to inform more efficient decision-making .

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What Is Strategy Evaluation?

Strategy evaluation is the process of analyzing a strategy to assess how well it's been implemented and executed. It’s an internal analysis tool and should be used as part of a broader strategic analysis for the organization when making strategic decisions.  

Typically, the strategy evaluation process involves answering questions such as:

  • Are we moving forward towards achieving our core business metrics ?
  • How much progress have we made towards our Vision ?
  • Are our Strategic Focus Areas still relevant?
  • Which of our Objectives have we completed?
  • Do we have sufficient Projects to deliver incomplete Objectives?
  • Are our KPIs still effective for measuring progress towards our Objectives?
  • Where did we fall short of our targets? Why did this happen?

At the very least, you need to evaluate your strategy twice a year—or better yet, every quarter. Even if you feel as though your existing company strategy is 'too far gone' and needs a fresh start, you'll want to perform a thorough strategy evaluation to understand what went wrong and use this information for your new strategy.

The mistake that people often make when it comes to strategy execution , is thinking of their strategy as a linear set of steps. In reality, the strategic planning process requires constant iteration and evolution, with strategy evaluation serving as a pivotal factor in shaping strategy formulation.

💡 Pro Tip: A good strategy should never really 'end'. Rather, it should morph into something more ambitious and sophisticated as goals are met.

Steps For a Successful Strategy Evaluation Process

There is no one-size-fits-all in terms of strategy evaluation, so we encourage you to think about how your own process would look like. However, after working on countless strategies with our customers, these are the steps we suggest you follow for a successful evaluation process.

Step 1: Evaluation starts at the start

It may sound counter-intuitive, but ideally, you'll be kicking off your strategy evaluation process back in the planning stage . Strategy evaluation is essentially the process of figuring out:

  • What did we do well?
  • How can we improve upon what we did well?
  • What did we learn about ourselves and the external environment along the way?

One of the best ways to answer these questions is by setting effective KPIs (Key Performance Indicators) in your planning stage so you’ll be able to clearly measure performance in the following stages.

Let’s look at an example:

Imagine "EcoWise," a company with a vision to lead global sustainable living. One of their core business metrics is market share , and they aim to expand their eco-friendly products into new international markets.

One of their focus areas could be “International Market Expansion” driven by the following objectives:

  • Enter and secure a 5% market share in Europe.
  • Launch at least five new eco-friendly products annually.

To understand progress towards the objectives, they set the following KPIs:

  • Market Share Growth
  • Product Adoption Rate
  • Sustainability Ratings

By having clear KPIs that set a benchmark and allow to measure actual results, EcoWise will be able to answer fundamental questions during the strategy evaluation process:

  • Did we meet our KPI?
  • Why did we fall short?
  • Was this even the right KPI?

👉🏻 How Cascade can help?

With Cascade’s planner feature, you can ensure you set all the important elements of your strategic plan with structure and ease and assign measurable targets at the initiative and project levels.

cascade strategy planner

Step 2: Implement consistent processes and tools

Not to sound too much like a broken record, but effective strategy evaluation requires planning that goes beyond the setting of good KPIs. You'll also need to plan out your 'strategy rhythm'—things like:

  • How often will we measure progress against our goals?
  • What standardized set of reports will be used throughout the business?
  • What level of detail shall we capture in our written commentary on progress against the plan?
💡 Pro Tip: It’s important to determine these types of things up front and implement a regime of meetings and reports throughout the organization.

We like to call this process your ' strategy rhythm ' as it should form the backbone of your organization's activities, and be maintained regularly and consistently throughout the year.

Here is an example you can use provided by Cascade’s team of experts:

dynamic business performance review cascade strategy

Step 3: Empower teams to evaluate their own strategies

Empowerment plays a critical role in the strategy evaluation process. Rather than have the leadership team alone participate in your strategy evaluation, invite stakeholders from different areas and departments to prepare their own evaluation of how the team performed against the strategy.

Provide them with a simple framework to conduct the analysis and address essential questions like:

  • Did we meet our goals?
  • What was it that helped us to succeed?
  • What challenges made us fall short?
  • Were our goals well set, and have they brought us closer to achieving our overall vision?

Ideally, you'll have your teams present using the tools you defined in step 2 . This includes any strategic dashboards or standardized reports that you agreed on previously.

cascade strategy dashboard

Cascade’s dashboards and reports in real-time give you and your teams an accurate picture of the strategic performance to aid in your strategy evaluation process.

Step 4: Take corrective action

Steps 4 and 5 (below) are somewhat intertwined and should be performed largely in conjunction with each other. If you find that you're not meeting one of your goals, you'll want to do two things:

  • Start by figuring out if the goal is still the right one.
  • If it is, take corrective action to address any shortcomings.

Assuming you're still convinced the goal you've set is the right one, you need to implement an action plan to get yourself back on track.

There are many reasons why you might be struggling to hit your goals, ranging from relatively simple issues such as:

  • Lack of resource allocation (human or financial)
  • Conflicting priorities
  • Ineffective tracking of targets
  • Misalignment or understanding of the goal

Or your challenges may be more complex and relate to:

  • Increased competition
  • A significant capital shortfall
  • Regulatory pressures
  • Lack of internal innovation

Whatever the case, the sooner you can identify these issues, the sooner you can start to take corrective action to ensure a more effective strategy implementation that will get you closer to achieving your desired results.

How to identify the issue?

There are tools and frameworks you can use during the strategy evaluation process that can give you more information about internal and/or external factors that may be hindering your progress.

For example, a SWOT analysis can be useful to reveal what you excel at and where you need improvement. Identifying your weaknesses is key to understanding what might be holding your strategy back.

Another best practice is conducting a competitive analysis to gain insights into what your competitors are doing better. By comparing your strengths and weaknesses against theirs, you can understand where you hold the competitive advantage and where you have gaps that need addressing.

Step 5: Iterate your plan

There are two scenarios where you'll want to iterate your plan as part of your strategy evaluation—one being significantly more positive than the other:

Scenario 1: When you achieve your goals

In an ideal world, your plan evolves because you've successfully checked off some or all of your strategic goals. Your plan isn't set in stone; it's flexible and can take unexpected turns.

For instance, you might reach certain goals much earlier than anticipated. When that happens, you shouldn't wait around for the entire plan to play out. Instead:

  • If you've met all your goals, it's time to ask if your broader focus area is complete. If not, it's time for new goals within that focus area.
  • Or, if you've successfully nailed all your focus areas, it's time to ponder if you're closer to your vision. If not, new focus areas should come into play.

Scenario 2: When you fall short of your goals

Now, let's consider a different scenario, where you didn't quite hit all your goals. But here's the thing: just because you missed a goal doesn't automatically mean you need to take immediate corrective action.

One of the key outcomes of effective strategy evaluations is the recalibration of Key Performance Indicators (KPIs).

Going back to the example in step 1 , let’s say that EcoWise effectively launched 5 new products, but this did not effectively translate into them gaining significant market share (which was the key metric they were aiming for).  

In this case, it suggests the original KPI might not have been quite right. But you wouldn't have known that without either the KPI in the first place or the process of strategic evaluation.

The platform allows for a flexible setup of your strategy to easily make changes to the plan if needed after the insights learned from your strategic evaluation process. By providing full visibility, your teams and other stakeholders will be aware of the changes in real-time!

Step 6: Celebrate successes

We've saved the most fun part of the strategy evaluation process for last—celebrating success.

Given that your strategy will never ‘finish,’ it’s important to celebrate the successes along the way to keep your teams motivated and engaged. The first time you achieve a KPI or even focus areas— enjoy it!

Celebrating the success of a strategic goal is not only great for morale, but it also sends a strong message that the execution of the plan really really matters .

Strategy Evaluation Framework Example

Let's imagine how a supply chain company could tackle the evaluation of its quarterly supply chain plan:

  • KPIs analysis : First, they examine their KPIs to decipher which goals they've attained and which ones are still a work in progress.
  • Team performance report : The teams get to work on crafting performance reports, offering insights into their achievements and areas requiring additional focus.
  • Further analysis : When certain KPIs fall short, they conduct a deeper analysis to uncover the root causes of these performance gaps. In some cases, they even realize that the initial KPIs might not have been the best fit.
  • KPI evolution : If they’ve successfully met a KPI, they adapt and introduce a new one to further advance toward key business metrics.
  • Evolving the plan : With insights and learnings from their strategy evaluation, they refine their strategic plan, making tweaks and adjustments as needed.

Centralized Observability: The Key To Effective Strategy Evaluation

In the realm of strategic business management, the journey to success is all about adaptability, evolution, and continuous improvement. A pivotal aspect of this journey is the capability to gain a holistic, centralized view of your strategy.

Centralized observability plays a pivotal role in successful strategy evaluation, empowering organizations to:

  • Monitor KPIs and goals in real time.
  • Understand how teams work together toward achieving the overarching business goals.
  • Quickly spot areas that may need adjustments.
  • Foster a culture of transparency and accountability, as teams can see how their efforts impact the broader strategy.
This unified perspective simplifies the process of assessing strategy effectiveness and provides invaluable insights for more effective decision-making.

This is where Cascade , the world’s leading Strategy Execution Platform , comes into play as your strategic ally. Cascade enables centralized observability by offering key features for goal management, performance tracking, and strategy alignment. It streamlines the strategy evaluation process, providing real-time data for confident decision-making.

Discover how Cascade can help! Sign up today for free or book a guided 1:1 product tour with one of Cascade’s in-house strategy execution experts.

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What is an evaluation of a strategic plan?

Evaluation of a strategic plan

What does the evaluation of a strategic plan mean?

"Evaluating a strategic plan is a crucial component of the strategic planning tool kit . It involves systematically assessing the plan’s effectiveness in achieving the organization's goals and objectives. This includes reviewing key components of the plan, such as goals, strategies, and tactics, to ensure they are realistic, achievable, and aligned with the organization’s mission and vision.

Importance of the strategic plan evaluation

Evaluating a strategic plan is crucial for several reasons:

Alignment : It ensures that the plan is aligned with the organization’s mission, vision, and values.

Resource optimization : It helps in optimizing the allocation of resources, ensuring that they are utilized effectively and efficiently.

Performance improvement : It helps in identifying the areas of improvement and making necessary adjustments to enhance the organization's performance.

Accountability : It ensures accountability by tracking the progress towards the goals and objectives, and making sure that the responsible parties are held accountable for their actions.

At what stage the strategic plan needs to be evaluated?

The strategic plan needs to be evaluated at various stages of its implementation:

Pre-implementation : Before the plan is implemented, it is essential to evaluate its components to ensure that they are realistic, achievable, and aligned with the organization’s mission and vision.

During implementation : It is important to continuously monitor and evaluate the plan during its implementation to ensure that it is on track and making progress towards the goals and objectives.

Post-implementation : After the plan has been implemented, it is crucial to evaluate its overall effectiveness in achieving the organization's goals and objectives.

Evaluation process in 5 quick steps

Define the criteria : Define the criteria that will be used to evaluate the strategic plan. These criteria could include the relevance, effectiveness, efficiency, impact, and sustainability of the plan.

Gather data : Collect data related to the strategic plan's components, such as the goals, strategies, and tactics, and their progress towards achievement.

Analyze the data : Analyze the collected data to assess the plan's effectiveness in achieving the organization's goals and objectives.

Make adjustments : Based on the analysis, make necessary adjustments to the plan to enhance its effectiveness.

Document and communicate : Document the evaluation results and communicate them to the relevant stakeholders.

Type of frameworks that can be used to evaluate the plan

Balanced scorecard:

This framework involves evaluating the strategic plan based on four perspectives: financial, customer, internal processes, and learning and growth. Use the balanced scorecard template to get started.

Logic model:

This framework involves evaluating the strategic plan by assessing the logical sequence of events that lead to the achievement of the organization's goals and objectives.

Theory of change:

This framework involves evaluating the strategic plan by assessing the underlying assumptions and theories that guide the plan's strategies and tactics. You can get started by using the theory of change template .

Remember, evaluating a strategic plan is crucial for ensuring its effectiveness in achieving the organization's goals and objectives. It is a continuous process that should be carried out at various stages of the plan’s implementation. Regular evaluation and necessary adjustments will help in optimizing the allocation of resources, improving the organization's performance, and ensuring accountability.

Discover more

What is a strategic roadmap?

The goal setting process for strategic planning

A guide to key performance indicators (KPI)

What is an OKR?

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The importance of knowing how to evaluate a strategic plan

how to evaluate the effectiveness of a business plan

Now that you know more precisely what strategic planning is and what it is for – with the help of Peter Drucker’s ideas – let’s take a look at some strategic planning objectives.

3 main objectives of strategic planning

Below are the main objectives and benefits of monitoring your organization’s strategic plan:

1- Ensuring that activities are being performed within the defined parameters

During the development of strategic planning, for each activity planned for the organization, necessary parameters for their accomplishment are considered.

Costs, execution time, financial, material and human resources needed, among others.

Now, while the plan is being put in place, the manager must make sure that all activities are being carried out within the proper parameters.

Rather than assessing, the manager must look at whether a change of course is required, and whether the parameters for any activity need to be rethought.

Ensuring activity progress helps set performance standards that indicate progress towards long-term goals, assesses people’s performance, and provides input for feedback.

2- Ensuring activities are consistent with company DNA

The soul of the organization is closely linked to its vision, mission and values.

Monitoring strategic planning is also a way to ensure that activities are being developed in accordance with the values that guide the organization and its organizational culture.

Since they are directly related to the organizational climate and the corporate image of the company.

Check out this unique Siteware infographic that shows the consequences of a misaligned organizational culture of strategic planning:

info iceberg The importance of knowing how to evaluate a strategic plan

3- Assessing ability to achieve goals and identify problems

Analyzing both the internal and external workforce and the exchange of ideas is also important in measuring how well a company is able to achieve what was set for the period.

By comparing performance data with established standards, it is possible to visualize or anticipate possible bottlenecks in corporate daily life.

Why is monitoring strategic planning important?

When a company monitors its strategic planning closely, it ensures that its teams are doing a good job, committed to maintaining progress, and with proper records so they can be evaluated.

Here is another quote from a master, Ram Charan , to illustrate how monitoring strategic planning is critical.

“ 70% of strategies fail due to ineffectiveness. They rarely fail due to lack of intelligence or vision.”

That is, at the time of executing the plan, it is crucial to carry out strategic monitoring and evaluation of the planning systematically and constantly.

After all, if 70% of planning activities fail in execution, only strategic planning control and evaluation – with metrics – will allow errors to be detected and adjustments made.

The metrics a company uses to measure also indicate the quality of the year or period the company is in.

If necessary, from what is evaluated, it is possible to correct the current path, make investments, hire staff, seek technological tools, build partnerships, among many other solutions.

Monitoring is part of the strategic planning system primarily to keep track of what is happening.

And this is usually done through an analysis of regular operational and financial reports on a company’s activities.

The results of a strategic planning follow-up are:

  • Incentive for continuous improvement;
  • Provision of data on the impact of activities;
  • Information for decision making.

The monitoring of strategic planning should be carried out based on the same indicators used when preparing strategic planning.

This also allows for process review as the company realizes that activities, internal and external relationships, customer approaches, etc. need to be modified.

Is it clear to you how important strategic planning and the control of action plans and activities are?

Examples of strategic planning indicators

You have seen that there is no way to monitor strategic planning without the use of indicators.

There are actually three types of indicators to consider in a company:

  • Strategic Indicators:  They point to the future, the path the company is expected to follow, and are linked to the mission and vision of the business. They will be reached in the long term, between 3 and 5 years. After an analysis of internal and external scenarios and company differentials, with the help of SWOT analysis, strategic indicators are usually defined.
  • Tactical Indicators:  are related to the actions of each area of the company. They make up an action plan that is effective in a shorter period than the strategic objectives, but should contribute to it. If tactical indicators are being met, there is a good chance that strategic objectives will also be met successfully.
  • Operational Indicators:  short term. They are directly linked to the day-to-day operations in a company and the progress of the processes. Operational indicators are assigned to each employee to achieve the desired performance level that will make it possible to achieve tactical and strategic goals.

How do you define strategic planning indicators, anyway?

We have seen in the paragraphs above that strategic indicators have the following characteristics:

  • Point to the future
  • Achieved in the long term
  • Linked to a company’s mission and vision
  • Based on competitive differences

So, for example, it would make no sense to define strategic indicators like the following:

  • Improve the efficiency of our production line by 15% next year.
  • Increase sales by 10% by the end of June
  • Hire new talent to fill 6 positions on the board by year’s end

These are typical examples of tactical indicators.

To get examples of strategic planning indicators, one must think of changes more linked to the company’s DNA, its mission to society.

Here is a short list of examples of strategic planning indicators:

  • Launch 3 new product lines each year over the next 4 years to gain 35% more Share in Market X.
  • Create a corporate university that meets our needs within a maximum of 2 years and institute university study support plans to enable our employees to have 85% of the workforce with a college degree and 50% with a postgraduate degree. 5 years.
  • Deactivate business units with less than 20% profitability and use the proceeds from the sale of these assets to start an international expansion project by opening 1 unit in countries X, Y and Z and 3 units in country W within 4 years.

Challenges of following strategic planning

Now that it’s clear to you how to evaluate a strategic plan, let’s look at the challenges inherent in doing it.

If we consider that strategic planning is the consolidation of ideas, it is in the implementation of these ideas that the organization will obtain its results, as Charan pointed out.

That’s why it needs to be constantly reevaluated and rethought as corporate progresses.

The biggest challenge of strategic management is related to the ability to move the organization and keep it connected with what was proposed by the strategic plan, with the adaptability that this process requires.

Like every management function, this presupposes a permanent dynamic of planning, execution, monitoring, evaluation, adjustments and readjustments.

And if you want to know how to evaluate a strategic plan even more quickly and assertively, check out STRATWs One strategic planning software.

It enables a friendly view of your strategy map, making it easy to track indicators and goals and creating action plans for each one.

It makes it much easier to understand how to evaluate a strategic plan and monitor internal activities.

Revolutionize the management of your company with STRATWs One

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Philanthropy

Strategic planning and evaluation: tools for realizing results.

To enable significant impact, organizations should ask three key questions and decide if formal planning and evaluation are the right approaches to finding the answers.

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By Paul Carttar Mar. 21, 2014

Nonprofit organizations are a stunningly diverse bunch, with assets ranging from hundreds of dollars to billions, service areas as varied as neighborhoods and the entire planet, and missions that encompass the full scope of human imagination and experience. But for all their differences, they are united in their desire to accomplish real results and in their need for funding—often from philanthropic individuals and institutions—to succeed in that ambition.

In a world where problems will always exceed the resources available to address them, philanthropy has a special responsibility to allocate its resources as effectively as possible to achieve significant social impact. With so many options and so much at stake, funding decisions will inevitably generate spirited debate, as is apparent in the simmering controversy over the significant increase in recent years of foundation support for formal processes such as strategic planning and evaluation. In particular, critics have made two major arguments against that funding choice: 1) that these processes simply cost too much, absorbing resources that would be better allocated to nonprofit programs that actually generate social impact, and 2) that many, if not most, of these efforts rely too heavily on simplistic goals and metrics that do not capture the true complexity and character of the intended social benefits.

The Value of Strategic Planning & Evaluation

Acknowledging that I am a planner by profession and that I previously headed up an Obama Administration program dedicated in large part to expanding the use of formal evaluations, I want to make three points.

First, despite their seemingly esoteric nature, strategic planning and evaluation are simply tools for optimizing performance. Used properly, they establish clarity around critical, basic questions that every nonprofit or foundation seeking impact should be highly motivated to confront:

  • What social impact are we trying to achieve?
  • What activities should we pursue to achieve our intended impact?
  • How will we know if we’re succeeding?

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I would argue that any nonprofit or foundation that can’t provide well-reasoned answers to these questions—however they determine those answers—has very dim prospects for accomplishing anything of real value to society, unless by chance.

Second, formal strategic planning and evaluation are not necessarily for everybody. Although all nonprofits and philanthropies should have solid answers to the questions above, there is no compelling reason for why they all should rely on systematic planning and evaluation processes to arrive at the answers. Those processes can be costly, though they’re not inherently so. Both encompass a wide range of approaches, from informal and intuitive assessments performed by internal staff to formal, rigorous analyses led by outside consultants. Whatever their degree of formality, their objective is the same: to enable nonprofits and philanthropies to develop increased confidence that their efforts are making a difference in the world.

So given their extraordinary diversity, when does it make most sense for nonprofits and foundations to undertake more formal, analytically rigorous, and, yes, costly strategic planning and evaluation processes? While there are many reasons for why impact-seeking organizations might desire greater confidence around resource-allocation decisions, the most compelling is simply scale. Put simply, the more money a nonprofit aspires to raise or a foundation contemplates providing for a particular program or intervention, the higher the opportunity cost—to the organizations involved and society overall—of being wrong about what approaches actually drive results. Plus, as scale grows, the real cost of systematic planning and evaluation, at least on a per-beneficiary basis, may become quite low.

The scale factor is particularly compelling, I believe, when the decision-maker is not actually the donor. It’s one thing for individuals to dedicate their own hard-earned money to support a given charitable pursuit. It’s another thing altogether when the people making funding decisions are using other people’s money. That, of course, is the case at many large private foundations (and all government agencies, for that matter). In such situations, fiduciaries and other stakeholders (and taxpayers) have a right to demand a high level of confidence that the organization’s decision-makers are deploying money wisely and to good effect.

Ultimately, nonprofits and foundations must decide based on their own circumstances what degree of formality their evaluation requires—or whether they value these processes at all. Following the logic laid out above, for example, where organizations are focused on pursuing more subtle or multifaceted changes in small-scale settings like neighborhoods and using the money of the people actively engaged in driving that change, the case for formal, rigorous strategic planning and evaluation simply doesn’t seem compelling.

Third, effective strategic planning and evaluation processes should yield robust, quantitative goals and metrics. Because the core purpose of these processes is to enable organizations to take productive actions, the goals and metrics that frame those actions must capture their most important elements and make it possible to monitor and measure them. And by definition, the metrics should be clear, precise, and quantitative whenever possible. That’s not always an easy task, but there can be no doubt that ambiguity is an enemy of focus, accountability, and learning.

Fortunately, a wide array of the most common social programs and interventions that philanthropies support at significant scale—job training, education, health services, home visitation, and teen pregnancy prevention, to name a few—are relatively straightforward and can be accurately assessed using discrete, quantifiable goals and metrics. Even where they are not—as might be the case with more complex or conceptual outcomes such as individual well-being, civic engagement, or social justice—skilled planners and evaluators can and must directly confront this complexity, possibly disaggregating concepts into elements that they can specify, track and measure in ways that still enable successful action while also respecting the organization’s true intent.

All that said, it’s inevitable that some strategic planning and evaluation processes will yield goals and metrics that may seem superficial or non-productive, and those interested in improving social sector effectiveness need to call them out and improve them. But organizations can’t abandon altogether the search for reliable metrics simply because the challenge of getting it right is arduous.

Still, the question remains: Are foundations and nonprofits overinvesting in strategic planning and evaluation? It’s possible that the pendulum has swung too far in some circumstances. But if so, this would still be a welcome change from prior decades when information about philanthropic aims and outcomes was scarce and rigorous strategic planning and evaluation hard to come by. Indeed, it’s sobering to contemplate how much money the social sector has wasted over the years because foundations or nonprofits unknowingly funded ineffective programs and interventions. When all is said and done, it is that specter that should inspire us to help our very diverse community of nonprofits and philanthropies find their best paths forward.

Support  SSIR ’s coverage of cross-sector solutions to global challenges.  Help us further the reach of innovative ideas.  Donate today .

Read more stories by Paul Carttar .

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The Complete Guide to Strategy Evaluation

The Complete Guide to Strategy Evaluation

Updated on: 4 November 2022

All organizational strategies are constantly reviewed and revised. As the internal and external environments of an organization change, so should the company strategy to aid in the survival and growth of an organization. A standard process to evaluate the effectiveness of an organizational strategy is therefore essential. It ensures that the organization is on the right path and is constantly adapting in a dynamic market.   

In this post, we will be explaining what strategy evaluation is and how to effectively implement the process.

What is Strategy Evaluation

Strategic evaluation constitutes the final stage of strategic management and is considered one of the most vital steps in the process.

Strategy Management Process

Strategy evaluation is the process by which the management assesses how well a chosen strategy has been implemented and how successful or otherwise the strategy is. To simply put, strategy evaluation entails reviewing and appraising the strategy implementation process and measuring organizational performance. 

In the instance, the implementation of the strategy is not taking place as planned, say due to the limitations in the strategy that are blocking the achievement of organizational goals, necessary corrective actions should be identified and applied.     

At the end of the evaluation, you’ll have gathered insight to either reformulate the strategy or to plan and develop new ones.

Evaluating the strategy helps improve it, distinguish between what works and what doesn’t, and contribute to the ongoing development and adaptation of the strategy to the changing conditions and complexities in the industry. 

Strategy evaluation operates at two levels; strategic and operational. At the strategic level, the focus is given to the consistency of the strategy with the environment, and at the operational level, how well the organization is pursuing the strategy is assessed. 

Through the process of strategy evaluation, strategists can make sure that the,

  • Premises made during strategy formulation are correct
  • Strategy is guiding the organization towards accomplishing its objectives
  • Managers are doing what they are supposed to be doing to effectively implement the strategy
  • The organization is performing well, schedules are being followed, and resources are being properly utilized 
  • Whether there’s a need to reformulate or change the strategy

Participants of the Strategy Evaluation 

The stage of strategy evaluation requires the contribution of several participants who will be playing different roles throughout the process.

The board of directors: takes on the formal role of reviewing and screening the executive decisions in light of their environmental, business, and organizational implications. Although they are not directly involved in the evaluation and control of the strategy implementation process, they periodically take part in reviewing the organization’s performance and results. 

Chief executives: are responsible for all the administrative tasks of strategy evaluation and control. 

The SBU or profit-center heads: monitor strategy implementation at the business unit level and give feedback to the corporate parent who can intervene as necessary.  

Financial controller, company secretaries, and external and internal auditors: responsible for operational control based on financial analysis, budgeting, and reporting. 

Middle-level managers: carry out tasks assigned to them by SBU heads or the strategic planning group, and provide them with feedback and information. They will also be participating in the corrective actions, in the case of mid-term revisions in the implementation process.

Importance of Strategic Evaluation

The phase of strategy evaluation helps ensure that the implementation of the particular strategy will help the organization achieve its objectives. Without this step in the strategy management process, it would prove difficult to identify whether the strategy implemented is generating the desired effect. In addition, strategy evaluation also helps,

  • Check the validity of the strategic choices the organization makes
  • Assess whether the decisions made during the strategy implementation stage meet the intended strategy requirements
  • Provide insight and experience into the strategists that can be used in reformulating or planning new strategies 
  • Shed light on issues caused by changes in the internal and external environment and take precautions and avoid making wrong decisions 

Strategy Evaluation Process

The strategy evaluation is carried out in order to determine that the strategy is helping the organization achieve its objectives. It compares the actual performance of the organization with desired results and provides the necessary insight into the corrective action that needs to be taken to improve the performance of the organization. Following are the steps in the process of evaluating strategy.

Establish standards 

This step starts with determining what standards to set, how to set them, and the terms used to express the standards. To do this, 

  • Identify the key areas of performance which are usually based on the key managerial tasks pertaining to strategic requirements. Standards should be set within these identified key performance areas. 
  • The special requirements needed to perform each of these key tasks can be used to determine the type of standard to be set. 
  • Performance indicators that can satisfy these special requirements can then be identified for evaluation.

Performance indicators have to be set on the basis of quantitative or qualitative criteria in order to make measuring performance easier.

  • Quantitative criteria – on the basis of this criteria, performance can be evaluated in two ways: Either by comparing how the company has performed against its past achievements or against the performance of the industry average or that of the competitors.   
  • Consistency (evaluating strategy against company objectives, environmental assumptions, and internal conditions)
  • Appropriateness (evaluating strategy with regard to resource capabilities, risk preference, and time horizon)
  • Workability (evaluating the feasibility and simulation of the strategy)

Measure Performance

The standards of performance set will serve as the benchmark against which the actual performance will be evaluated. Based on these standards, managers should decide how to measure the performance and how often to do so. 

The methods used to measure performance may vary on the standard set; usually, data such as the number of materials used, units produced, the monetary amount of services utilized, the number of defects found, processes followed, quality of output, and return on investment, are used. 

Once the methods of measuring performance are identified, how often it should be done for control purposes needs to be then decided.  Whether it should be on a daily, weekly, monthly, or annual basis is decided on factors such as how important the objective is to the organization, how quickly the situation might change, and how difficult or costly it would be to fix a problem once it has actually occurred.

Analyze Variances

Evaluating the actual performance against the standards of performance will reveal whether; 

  • The actual performance matches the budgeted performance 
  • The actual performance differs from the budgeted performance in a positive way 
  • The actual performance differs from the budgeted performance in a negative way

A predetermined set range of tolerance limits can be used to determine whether the results can be accepted satisfactorily. If the actual performance deviates from the budgeted performance within the set tolerance limit, the performance can be considered acceptable and the variance insignificant. 

On the other hand, if the performance is below standards, effort must be directed to finding the root causes of the deviation and coming up with corrective action to fix it.

Take Corrective Action  

In the case the actual performance falls out of the tolerance limit, corrective action must be taken to solve it. The deviation can be caused internally or externally, predicted or random, or temporary or permanent. 

If the actual performance is below the standards consistently, a thorough analysis should be carried out to find the root causes. If the organizational potential can’t meet the performance requirements, consider adopting attainable performance standards. In the case of an extreme deviation, you might have to consider formulating the strategy, which might require you to start from the beginning of the strategic management process.

Corrective Action Plan for Strategic Evaluation

Strategic Evaluation Technique 

Evaluating the effectiveness of a strategy entails assessing the internal and external forces that affect strategy implementation . Following are a few techniques that you can use to examine these factors and make well-informed strategic decisions.

Gap analysis

A gap analysis is performed to identify and measure the gap between your current state of organizational performance and the desired state. It can be utilized to evaluate various aspects of the business from production to marketing. 

Learn more on how to conduct a gap analysis and the tools you can use to accelerate the process and the gap analysis templates to simplify the steps.

SWOT analysis

A SWOT analysis is another helpful tool that strategists use to assess the current situation -both internal and external environments – of an organization. It helps you gain insight into your internal landscape by analyzing strengths and weaknesses, and insight into your external landscape by scanning opportunities and threats.

SWOT Analysis for Strategy Evaluation

Learn how to effectively use a SWOT analysis .   

Value chain analysis

This analysis examines the set of activities the company performs to produce and market a product or service. It helps identify which activities are most valuable to the company and which needs to be improved to help perform better. 

how to evaluate the effectiveness of a business plan

Ready to Evaluate Your Strategy? 

Strategy evaluation plays a significant role in assessing the effectiveness of a strategy in achieving organizational objectives and helping in the successful culmination of the strategic management process.

This guide gives an introduction to strategy evaluation and the steps to evaluating a strategy effectively, and we hope it will help you carry out the process seamlessly. 

Let us know your experience in the comments section below.

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Effective Planning Principles for Small Businesses

Business Planning Guidelines Make Business Planning Easier

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

how to evaluate the effectiveness of a business plan

Providing Real Timely Information

Creating an action-based business plan, identifying risks and challenges, business planning and ethics.

If you're interested in starting a business, you will need to write a solid business plan . This plan has two main purposes. If external financing is needed, it helps attract investors or obtain a bank loan. It also serves as a road map from start-up through the life of your business. It helps you stay focused on the goals you set initially and can be modified to adapt to future changes in the industry.

There are certain items that you will need to consider to begin creating a successful business plan.

A good business plan should be based on current data. It should include specific information about your company, as well as other details such as industry outlook, target audience, services and products, marketing strategy, and funding.

However, before you begin writing your business plan you will need to gather information to help you identify priorities and make decisions. This may include research on target demographics, the market , and potential competitors .

The Small Business Administration provides guidance and templates for writing both a traditional and lean startup business plan.

A well-thought-out business plan provides detailed information on business goals and how they will be achieved. It's a realistic, attainable plan that describes exactly how objectives will be met.

To determine your company's goals, start by looking at the SMART goal-setting strategy. SMART can guide you in creating goals that are specific, measurable, achievable, relevant, and time-based. Note that goals are not set in stone and may need to be modified to meet changing customer needs.

Make sure your business plan is clear and to the point. Avoid using industry jargon and acronyms, so it is understandable to those unfamiliar with the industry.

Successful business planning involves not only assessing potential risks but coming up with ways to mitigate them. One strategy is to create a risk management plan . This helps prepare a company for dealing with various risks before they cause serious financial loss.

Types of common business risks include fines and penalties from noncompliance, lost revenue and profits, and loss of reputation.

There are many types of strategies to increase your business’s profits, however, some may be unethical—or even illegal. Before you make them part of your business plan, consider if they are ethical. In other words, do they support or enhance your values and the values that you hope are shared by society?

To avoid any legal liability, be sure to understand the customs and regulations applicable to your business.

Adopting unethical practices comes with the risk of being caught. It can cost you in expensive fines and penalties, as well as your reputation in the industry. This can result in the ultimate cost of losing your business.

Business planning is critical if you want your business to survive and succeed. It is not only a tool for attracting investors or getting a loan but serves as a plan that can guide you through the life of your business. By creating a realistic, actionable business plan, you have taken the first step to becoming a successful business owner.

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How to Evaluate a Business Plan

by Evangeline Marzec

Published on 16 Oct 2019

Whether you're an investor, an entrepreneur or a business skills teacher, you'll be exposed to a wide variety of business plans and should have a solid, somewhat standard approach to conducting a business plan assessment. Analyze each section individually, and then look at the plan as a whole to determine the viability of the business and the likelihood of its success in the manner proposed. Also consider the writing skills and attention to detail that went into formulating the plan.

Read and Understand the Executive Summary

The first step in a business plan assessment is reading the business' executive summary. This should be a concise "elevator pitch", not a summary of the business plan. In one or two pages, it should convey the market opportunity and the uniquely compelling features of the business that will help it meet that opportunity. The executive summary should excite you and make you want to turn to the next page. If it doesn't, the entrepreneur might lack marketing or writing skills, or it may indicate that the idea itself is not going to fly.

Analyze Opportunity in the Market

Evaluate the market opportunity. Ideally, the market should be growing at least 10% per year and have a substantial potential relative to the size of the business and investment. For example, a small company seeking an investment of $50,000 should see a potential market of $5 million.

The larger the potential market and the faster it is growing, the greater the opportunity in the market. Look to the exhibits and appendices to ensure that the business actually has done the necessary market research and can back up any claims.

Evaluate the Company's Business Strategy

Examine the company strategy for capturing its market. The plan must clearly describe the problem the company is solving or need it is meeting for customers, and then propose a solution. This is the crux of a business plan assessment.

Closely examine the alignment between problem and solution. Will the company actually address that need? This evaluation must take into account the product or service being offered, the operational capacity and efficiency with which the business actually can produce its product, and the quality of the proposed marketing efforts.

Examine the Business Environment

The business plan should describe the competitive landscape in which the company operates, preferably by referencing Porter's 5 Forces or another well-established tool. Look for detailed breakdowns and analyses of each of it competitors, and of how the company is different and better than the competition in a particular niche. This section should include the regulatory environment and mention any costs or necessary delays associated with regulations.

Porter's 5 Forces is an evaluation model that looks closely at the five competitive forces at play in the business landscape. These forces are present in every industry and by evaluating how they manifest in an individual industry, one can gauge that industry's strengths and weaknesses. Porter's 5 Forces are:

  • Competition in the industry
  • Potential of new entrants in the industry
  • Power of suppliers
  • Power of customers
  • Threat of substitutes

Evaluate the Leadership Team

Look for experience, integrity and passion in the executive team. Read bios and brief highlights of each executive's strengths and expertise should accompany standard business information such as headquarters and corporate structure. The company should have experienced advisers, either formally or informally.

It is paramount that the principals involved in the business convey their passion and drive toward success with this project. If the founders haven't invested their own capital into the business, or plan on keeping their “day jobs” while running the business, they might lack faith in the project.

Crunch the Numbers and Understand the Finances

Ensure that the financial projections are both promising and realistic. Most entrepreneurs vastly overstate their company's potential, starting with the market size and market share. Financial figures should be based on historical data if available, or very conservative projections if the company is not yet profitable. Entrepreneurs that project capturing 20% market share in the first two years probably have unrealistic expectations.

Investigate the returns provided by the investment. Good business plans include exit strategies for pulling the initial investment back out of the company, and have a realistic valuation of their shares.

View the Business Plan as a Living Document

Evaluate the business plan as a whole document, and as a reflection of a real-world company. Determine whether the market need is adequate, the company's offerings are compelling, the management team experienced and committed, and the financial statements realistic. Does this company as a whole have a chance of success?

how to evaluate the effectiveness of a business plan

How to Evaluate a Marketing Plan: A Step-by-Step Guide

Imagine creating an elaborate marketing plan, investing time and resources into it, and then never checking its effectiveness. Sounds counterproductive, right? Evaluating your marketing plan is imperative for business success, as it enables you to optimize marketing initiatives, make necessary adjustments, and ultimately drive sales.

In this blog post, we will guide you through a comprehensive step-by-step process on how to evaluate a marketing plan effectively and make data-driven decisions for continued growth.

By understanding the significance of evaluating your marketing plan, identifying key components for evaluation, analyzing marketing channels and initiatives, examining budget and expenses, measuring ROI and customer acquisition cost, and leveraging customer feedback, you can ensure your marketing strategies align with your overall business goals. Ready to optimize your marketing efforts and achieve better results? Let’s dive in!

Short Summary

  • Evaluating a marketing plan is essential for measuring its success and making necessary improvements to achieve business goals.
  • Key components of an effective evaluation include setting clear objectives, identifying relevant metrics, utilizing data-driven insights, and leveraging customer feedback & satisfaction.
  • Benchmarking performance against industry standards, testing new strategies, and monitoring progress are key steps in refining tactics to ensure the successful implementation of the marketing plan .

The Significance of Evaluating Your Marketing Plan

Evaluating a marketing plan is crucial for ensuring its effectiveness and making necessary improvements to achieve business success. An effective evaluation helps you make informed decisions about marketing efforts, investments, and strategies, ultimately driving sales and enhancing brand value. By analyzing financial data such as:

  • customer acquisition cost

You can assess your marketing plan’s effectiveness and make adjustments as needed.

You can identify trends and patterns that provide insights into your target market and the overall effectiveness of your marketing campaigns.

As a seasoned marketer, you must stay up-to-date with the latest marketing strategies and tactics, ensuring your marketing plan is optimized for generating leads, driving sales, and increasing overall market share. Evaluating your marketing plan’s effectiveness allows you to allocate your marketing budget effectively and optimize marketing costs, ensuring that every dollar spent contributes positively to your business’s success.

Key Components of an Effective Marketing Plan Evaluation

There are a few key components that make up an effective marketing plan evaluation. These components include setting clear objectives, identifying relevant metrics, and utilizing data-driven insights. By focusing on these elements, you can accurately assess the performance of your marketing plan and make informed decisions for optimization.

Before diving into how to evaluate your marketing plan, let’s first look at the essential components in more detail. In the following sections, we will discuss:

  • The importance of defining clear objectives
  • Identifying relevant metrics
  • Utilizing data-driven insights to ensure your marketing plan is on track to achieve its goals.

Defining Clear Objectives

Defining clear objectives is a crucial first step in evaluating your marketing plan. Establishing these objectives helps direct the assessment process and gauge success. Your marketing plan’s objectives may include:

  • Enhancing brand recognition
  • Generating leads
  • Increasing sales or revenue
  • Establishing authority in the industry

By defining your objectives upfront, you can better focus your marketing efforts, ensure your plan aligns with your overall business goals, and measure the effectiveness of your strategies.

Moreover, having clear objectives allows you to:

  • Establish benchmarks for success
  • Determine whether your marketing plan is on track to achieve its goals
  • Continuously monitor progress toward your objectives
  • Identify areas for improvement
  • Optimize your marketing strategies
  • Maximize your marketing effectiveness.

Identifying Relevant Metrics

Once you have defined clear objectives for your marketing plan, the next step is to identify relevant metrics to track and analyze. These metrics provide valuable insights into the effectiveness of your marketing strategies and help you make informed decisions for optimization. Some key metrics to consider include:

  • Website Traffic
  • Lead generation
  • Conversion rate
  • Cost per lead
  • Customer lifetime value (CLV)

By monitoring these metrics, you can determine which strategies are working and which ones need improvement.

In addition to tracking your marketing performance, it is essential to benchmark your metrics against industry standards. By comparing your performance to that of your competitors, you can identify areas where you excel and where there is room for improvement. This comparison allows you to make data-driven decisions about your marketing strategies, ensuring that your marketing efforts align with your business goals and contribute positively to your overall success.

Utilizing Data-Driven Insights

Data-driven insights play a pivotal role in making informed decisions and optimizing marketing strategies. By leveraging data from various sources and analyzing it at a detailed level, you can:

  • Identify trends, patterns, and areas for improvement
  • Make strategic adjustments to your marketing plan
  • Allocate resources more effectively
  • Ultimately, achieve better outcomes and a higher return on investment.

For example, by analyzing website traffic data, you can determine which marketing channels are driving the most traffic and generating the most leads. This information can be used to adjust your marketing strategies, focusing more on high-performing channels and reducing spending on underperforming ones. By continuously analyzing data and refining your tactics based on the insights gathered, you can ensure your marketing plan is on the right track toward achieving its objectives and driving business success.

Assessing Marketing Channels and Initiatives

A crucial part of evaluating your marketing plan is assessing the performance of various marketing channels and initiatives. This includes analyzing both inbound and outbound marketing efforts to determine how well they are contributing to your overall marketing goals. By examining the effectiveness of your marketing channels, you can identify areas for improvement, optimize your strategies, and allocate your marketing budget more efficiently.

In the following sections, we will discuss how to assess the performance of inbound and outbound marketing strategies, including analyzing lead generation and conversion rates and measuring the return on investment for each marketing channel.

Inbound Marketing Analysis

Inbound marketing analysis is the evaluation and assessment of your inbound marketing strategy to determine its effectiveness in attracting and converting customers. This process involves analyzing the performance of various inbound marketing tactics, such as content creation, social media engagement, and lead generation. To accurately assess inbound marketing performance, metrics such as website traffic, lead generation, conversion rate, cost per lead, and customer lifetime value should be utilized.

By analyzing these metrics, you can identify areas for improvement and make data-driven decisions to enhance your inbound marketing efforts. For instance, if your website traffic is low, you may need to focus more on content creation and search engine optimization to improve your online visibility. On the other hand, if your conversion rate is low, you may need to refine your lead nurturing process and optimize your calls to action.

By continuously analyzing your inbound marketing performance and making strategic adjustments, you can ensure your marketing plan is on track to achieve its objectives.

Outbound Marketing Analysis

Evaluating the success of outbound marketing efforts is equally important in assessing your marketing plan’s effectiveness. Outbound marketing strategies, such as:

  • TV advertisements
  • Radio advertisements
  • Print advertisements
  • Billboard advertisements

It can be more challenging to measure in terms of their influence on revenue and customer acquisition costs. However, by employing methods such as return on investment (ROI) analysis and measuring the impact of these strategies on your target market, you can gain valuable insights into their effectiveness.

By analyzing the ROI of your outbound marketing campaigns, you can determine which strategies are generating the most revenue and which ones may need to be adjusted or replaced. Additionally, by monitoring customer response and partner feedback, you can identify areas for improvement and make data-driven decisions to optimize your outbound marketing efforts.

Continuously evaluating and refining your outbound marketing strategies is essential to ensure your marketing plan remains effective and aligned with your business goals.

Examining Marketing Budget and Expenses

A thorough evaluation of your marketing plan should also include an examination of your marketing budget and expenses. Analyzing your marketing expenses allows you to:

  • Identify areas for cost reduction
  • Optimize spending
  • Categorize expenses into different categories
  • Analyze each category to assess which expenses are generating the most revenue and which ones are not cost-effective.

In the following sections, we will discuss how to allocate your marketing spend effectively and optimize marketing costs to maximize ROI and achieve your marketing objectives.

Allocating Marketing Spend

Allocating marketing spend is essential as it helps establish definite objectives and expectations, directs employees’ efforts and actions, permits tracking of expenses, and ensures that funds are allocated toward specific marketing activities. The optimal approach to allocating your marketing spend is to consider the objectives of your marketing plan, your target audience, the available budget, and the expected return on investment.

By allocating your marketing budget effectively, you can ensure that your marketing efforts are focused on the appropriate goals and that your spending is optimized to generate the best possible outcomes. Utilizing metrics such as cost per lead, cost per acquisition, and return on investment can help you assess the effectiveness of your marketing spend and make informed decisions about where to allocate your resources.

how to evaluate the effectiveness of a business plan

Optimizing Marketing Costs

Optimizing marketing costs is essential for maximizing the effectiveness of your marketing effort while reducing unnecessary expenses. By identifying opportunities to optimize marketing costs, you can allocate your budget more judiciously, target the appropriate audience, and assess the impact of your marketing campaigns.

Developing strategies to optimize marketing costs can be achieved by setting clear objectives, identifying relevant metrics, and utilizing data-driven insights. Establishing clear objectives allows marketing efforts to be focused on the appropriate goals while recognizing relevant metrics enables the assessment of the success of campaigns. Utilizing data-driven insights can aid in identifying areas where costs can be reduced, and campaigns can be improved.

Measuring Marketing ROI and Customer Acquisition Cost (CAC)

Measuring marketing ROI and customer acquisition cost (CAC) is a vital component of evaluating your marketing plan’s effectiveness. Marketing ROI calculates the effectiveness of your marketing activities by comparing earnings with the money spent on campaigns. This enables companies to determine the profitability of marketing investments. A positive ROI shows that the marketing campaign was effective. On the other hand, a negative ROI implies that it was not profitable.

On the other hand, the customer acquisition cost (CAC) analysis quantifies the cost of acquiring a new customer, taking into account all marketing and sales expenses. By measuring marketing ROI and CAC, you can determine the cost-effectiveness of your marketing initiatives and identify which strategies are generating the most revenue.

This information can be used to:

  • Allocate your marketing budget more efficiently
  • Ensure your marketing efforts contribute positively to your overall business success.

Evaluating Sales Team Collaboration and Integration

Another crucial aspect of evaluating your marketing plan is assessing the collaboration and integration between your marketing and sales teams. Effective collaboration between these two teams ensures seamless lead nurturing and conversion processes, ultimately resulting in improved sales and customer satisfaction. By evaluating the communication and teamwork within your sales team, you can pinpoint areas for development, promote a culture of collaboration and professional growth, and optimize productivity.

In addition to assessing the collaboration and integration within your sales team, it is essential to consider the impact of re-marketing efforts on increasing retention rates. Re-marketing is an effective tool for maintaining relationships with existing customers and encouraging repeat business, regardless of the type of business.

Continuously evaluating and refining your sales team’s collaboration and integration with marketing partners is essential to ensure the success of your marketing plan and the achievement of your overall business objectives.

Leveraging Customer Feedback and Satisfaction

Customer feedback and satisfaction are invaluable sources of information when evaluating your marketing plan’s effectiveness. By conducting customer satisfaction surveys and gathering feedback from your target demographic, you can gain direct insights into their perceptions of your product or service. This feedback can help you identify areas for improvement, adjust your marketing strategies, and ultimately enhance customer satisfaction and loyalty.

In addition to customer satisfaction surveys, utilizing social media and other online channels to collect feedback can provide valuable insights into customer behavior, preferences, and trends. By leveraging this feedback, you can make data-driven decisions about your marketing strategies, ensuring that your marketing efforts align with your customers’ needs and expectations.

Benchmarking Performance Against Industry Standards

Benchmarking your marketing performance against industry standards and best practices is an effective way to gauge your marketing plan’s success and identify areas for improvement. By comparing your marketing metrics and key performance indicators with those of your competitors, you can determine where you excel and where there is room for growth.

Organizing and analyzing assessment results can be achieved by examining the data, recognizing patterns, and making modifications based on the findings. By continuously benchmarking your performance against industry standards, you can ensure that your marketing plan remains aligned with best practices and contributes positively to your overall business success.

Implementing Adjustments Based on Evaluation Results

The ultimate goal of evaluating your marketing plan is to make informed decisions and implement adjustments to improve its effectiveness. When reviewing and revising your marketing plan, it is important to consider the following:

  • Data-driven insights
  • Channels and initiatives
  • Budget and expenses
  • ROI and CAC
  • Sales team collaboration and integration
  • Customer feedback and satisfaction
  • Benchmarking performance against industry standards

In the following sections, we will discuss the importance of testing new strategies and monitoring progress to refine your tactics based on ongoing evaluation and feedback.

Testing New Strategies

Testing new strategies is essential for businesses to evaluate the effectiveness and potential impact of these strategies before committing to them. By conducting tests, businesses can:

  • Gather data and insights to make informed decisions
  • Optimize their approach
  • Identify any potential issues or challenges that may arise
  • Make necessary adjustments and improvements

Testing helps businesses make informed decisions and improve their overall strategy.

Some examples of successful testing strategies include A/B testing, multivariate testing, and split testing. These testing methods involve comparing different versions of a marketing campaign to determine which one yields better results. By continuously testing new strategies and making data-driven adjustments, you can ensure that your marketing plan remains effective and aligned with your overall business goals.

how to evaluate the effectiveness of a business plan

Monitoring Progress and Refining Tactics

Continuously monitoring progress and refining tactics is essential for maintaining the effectiveness of your marketing plan. By regularly evaluating the performance of your marketing strategies and making data-driven adjustments, you can optimize your approach and achieve your desired objectives.

Some examples of successful monitoring progress and refining tactics include:

  • Utilizing analytics to track performance
  • Conducting customer segmentation
  • Leveraging customer feedback to make informed decisions about your marketing strategies

By maintaining a proactive approach to monitoring progress and refining tactics, you can ensure that your marketing plan remains on track to achieve its objectives and drive business growth through a well-executed marketing initiative.

Case Studies: Successful Marketing Plan Evaluations

Throughout this blog post, we have discussed the importance of evaluating your marketing plan and implementing adjustments based on the results. To illustrate the effectiveness of these evaluation methods, let’s consider some successful case studies.

  • A small e-commerce business used A/B testing to determine the most effective email marketing campaign, resulting in a significant increase in sales. By analyzing the performance of different email designs and subject lines, the company was able to optimize its marketing efforts and achieve better results.
  • A software company conducted an in-depth analysis of its inbound marketing strategies, including content creation, social media engagement, and lead generation. By monitoring key metrics and making data-driven adjustments, the company was able to increase website traffic, generate more leads, and improve overall marketing effectiveness.

These case studies demonstrate the power of evaluating marketing plans and making informed decisions based on the results. By implementing the evaluation methods and strategies discussed in this blog post, you can optimize your marketing efforts and achieve greater business success.

In conclusion, evaluating your marketing plan is essential for optimizing marketing initiatives, making necessary adjustments, and ultimately driving sales and enhancing brand value. By understanding the significance of evaluating your marketing plan, identifying key components for evaluation, analyzing marketing channels and initiatives, examining budget and expenses, measuring ROI and customer acquisition cost, and leveraging customer feedback, you can ensure your marketing strategies align with your overall business goals.

Continuously monitoring progress, testing new strategies, and refining tactics based on ongoing evaluation and feedback are crucial for maintaining the effectiveness of your marketing plan. By implementing the evaluation methods and strategies discussed in this blog post, you can make informed decisions about your marketing efforts, optimize your marketing strategies, and achieve better results for your business.

Frequently Asked Questions

How do you evaluate a marketing plan.

To evaluate a marketing plan, it is essential to consider metrics like Return on Investment (ROI), customer satisfaction, brand value, market share, and sales growth. Gathering customer feedback, partner insights, tracking, measuring, and refining the plan helps to determine its success.

Why should you evaluate the marketing plan?

Evaluating your marketing plan is essential for its successful implementation, as it allows you to track progress and identify areas of improvement. This way, you can ensure a return on investment while saving time and money.

What are the three keys points to an effective marketing plan?

An effective marketing plan requires a clearly defined target audience, setting achievable goals, developing a strong value proposition, creating compelling content, tracking progress, and continually refining the strategy.

This plan should be tailored to the specific needs of the business and its target audience. Goals should be realistic and measurable, and the value proposition should be clear and compelling. Content should be engaging and relevant to the target audience. Progress should be tracked.

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How to Evaluate the Effectiveness of Your Marketing Plan

how to evaluate the effectiveness of a business plan

How to evaluate the effectiveness of your marketing plan

Any seasoned marketer knows that a marketing plan is ineffective without evaluating data. Understanding how to evaluate a Marketing Plan can save your company time, money and ensure a return on investment.

How should marketers evaluate their plans? For every marketing plan curated, marketers should closely track and monitor the plan as it progresses over time. This article helps marketers uncover what should be tracked to best evaluate the effectiveness of a plan.

What Should You Use to Evaluate For a Marketing Plan?

Here are a few metrics that should be used to evaluate your marketing plan.

  • Web traffic
  • Marketing goals
  • Marketing Qualified Leads
  • Channels & Campaigns
  • Customer Satisfaction
  • Cost Per Outcome (CPO)

 1. Web Traffic 

Measuring online traffic over time is an important metric to track. How much traffic is your website driving compared to last month, or last year? An improvement in the number of website users means an increase in online visibility and a potential increase in marketing leads. 

2. Marketing Goals

When evaluating the effectiveness of a marketing plan, you must compare against established goals. Your plan should be goal-driven right from the start. Here are a few tips on setting  marketing goals:

  • Use SMART goals; Specific, Achievable, Timely, Measurable, and Realistic. List your goals so you know what to measure. 
  • Determine key marketing KPIs (key performance indicators) used to measure that goal. When measuring success, which marketing metrics matter to your business?
  • Your marketing goals should be directly related to the goals of your business.

Reviewing KPIs shows whether your marketing plan is on track to meet your goals. You’ll also be able to allocate marketing spend to those activities that bring in the best results. 

3.Marketing Qualified Leads (MQLs)

The effectiveness of your marketing plan is not only about measuring the number of online marketing leads, but the quality of the leads you are driving. The qualification of your leads is important to business success.

If you find that your marketing leads are not translating to sales qualified leads, consider:

  • Meeting sales team: Review with your sales team the definition of a sales-qualified. Qualified leads should be reflected in your customer persona research. The content you create should be ICP friendly. Adjust your marketing plan and campaigns to fit the framework of qualified leads.
  • Finding campaigns/channels driving unqualified leads: Using Google Analytics goal tracking, you can evaluate the campaigns or channels responsible for driving high volumes of unqualified leads. Once this is determined, adjust audience settings, keywords, campaign messaging, or something else to better target your ideal audience.

4. Marketing Return on Investment (ROI) 

 “Marketers love empty calorie marketing, which is why stepping onto an ROI scale feels so humbling.” – Scott Todaro

Another way to evaluate a marketing plan is to look at your MROI (marketing ROI) and the factors that have impacted your return on investment.

  • Are you paying more for leads than the actual number of new leads? Tracking allows you to see how many new leads are coming in. If you’re paying for lead generation, is it worth the investment or do you need to tweak your marketing strategy? 
  • What is the cost of acquiring a new customer? When calculating this, be sure to factor in all marketing expenses, including the number of hours, costs of softwares and tools used to automate your efforts, and external help from agencies or freelancers.

5. Channels and Campaigns

When evaluating the effectiveness of your plan, one of the final steps is to make adjustments as needed. Keep these tips in mind during your evaluation:

  • Evaluate the channels and campaigns that prospective customers are coming from. 
  • Take the campaigns or channels performing the best, to emulate strategies or allocate more budget. 
  • For campaigns or channels that are not performing, evaluate what you can do to make them more effective, or pause a campaign and reallocate your budget into another campaign or channel.

6. Customer Satisfaction

Don’t forget about your current customers or clients! Marketing doesn’t stop once a sale is finalized. Re-marketing can effectively improve retention rates whether you’re a product or service-based business. This will in turn improve your LTV as well.

Consumer satisfaction is another way to measure the effectiveness of a marketing plan, from the first interaction to after a sale is made.

Listening to what your consumers say can provide feedback on how your marketing plan aligns with your organization’s position, customer service, and its effectiveness. Consider using the following to get a sense of customer satisfaction:

  • Focus Groups
  • Online reviews
  • Social listening

7. Cost Per Outcome

Cost per outcome is a measure of execution efficiency. It describes how much is being spent to achieve a specific metric.

CPO does not communicate business value, but it is useful to measure because it will tell you if your marketing activities are becoming more or less efficient at generating certain metrics. It’s important not to focus on empty calorie marketing. Your CPO may increase if your keywords become more expensive or competitive. CPO may decrease if you hone messaging to a target audience and conversion rates increase.

Marketers can decrease their CPO by:

  • Market Research
  • Segment Targeting
  • A/B Testing
  • Performance Adjusting

Evaluation of Marketing Plans is a Constant Effort

To see the results of an effective marketing plan, marketers should constantly measure and evaluate the plan’s performance, from beginning to end, with adjustments made along the way.

Planful’s marketing planning software can help you evaluate the effectiveness of your marketing plans and improve the business value of marketing.

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Marketing Effectiveness: How to Measure It & Present to External Stakeholders

Paige Bennett

Published: July 30, 2021

You can apply marketing strategies all day, but if they aren't effective, those efforts don't matter in the long-term.

Marketers measuring the effectiveness of their marketing activities.

Measuring marketing effectiveness is crucial to improving your go-to strategies over time. Are your methods hitting KPIs? Are they helping your clients reach short- and long-term milestones? Use each campaign to learn and grow.

By measuring marketing effectiveness, you can better ensure high ROI or return on marketing investment, ROMI.

Download Now: Free Marketing Plan Template [Get Your Copy]

Measuring Marketing Effectiveness

How do you measure marketing effectiveness? Sure, you can look at traffic or sales metrics, but it goes further than that.

Ultimately, the KPIs you choose to measure can vary by company and strategy. But there are some metrics to pay attention to when measuring marketing effectiveness.

First, when you consider revenue, look into how much of the revenue is a direct result of the marketing efforts. This can help provide clear, high-level insight into how successful the marketing efforts are for the company.

Next, consider pipeline ROI or pipeline growth. Do you continue to generate more and more new leads via your marketing efforts? If not, your marketing effectiveness might be falling flat.

Conversion rates are also a strong KPI to review. Keep in mind that impressions, views and even clicks don't necessarily translate to a successful marketing strategy. If users are clicking but not following through with a purchase, why aren't they converting? Conversion rates can offer a better look at the success of your marketing.

When considering long-term effectiveness, look at retention rates. Are customers sticking around with your company for the long haul, or are they making a few purchases and leaving? Don't forget to continue marketing to ongoing customers while also reaching new audiences.

Marketing Effectiveness Metrics

The types of metrics you consider can also vary by medium. Marketing efforts used to center on tangible but harder to measure media, like billboards, magazines, or television.

Today, digital marketing is front-and-center, and with it comes a wide array of things to measure to determine effectiveness. Here are three top marketing segments and metrics to consider for each.

1. Social Media Marketing Effectiveness

Social media marketing is newer to the scene, but it can be huge for company revenue and lead generation. Measuring marketing effectiveness on social media is pretty straightforward.

It's easy to track the number of inquiries or leads through gated content on social media, and engagement can also be tracked through reposts/shares, comments, and follower count.

Conversion rate plays a role here too. If your account has a high follower count but comparatively low engagement rates, you can start investigating where to tailor your social marketing strategy for improved engagement, leads and revenue.

2. Content Marketing Effectiveness

Content marketing is vast, with options to market through a website, videos, articles, courses, and other digital content. The goal is not to say, “ Hey, purchase my product and engage with my brand! ” but rather to provide valuable, informational content for customers.

Because there are so many methods for content marketing, measuring effectiveness can vary widely depending on the source at hand. You might check conversion rates from your website to your paid online course, or you might consider engagement with your informational video or webinar.

3. Email Marketing Effectiveness

Email marketing is thriving. There are a number of metrics to consider when measuring email marketing effectiveness. First, you can review delivery, open, and click-through rates.

High delivery rates means your emails are reaching inboxes, but don't depend solely on this metric. Open rates are important, as a low open rate can reveal that you need to focus on writing shorter, more intriguing subject lines.

Of these three, click-through rates are arguably the most important. Are potential customers clicking on links in the email, or are they opening it and then deleting the email? Click-through rates offer a higher chance of converting to revenue. Conversion rate is, again, important here and can help gauge marketing effectiveness for emails, content, social and traditional marketing methods.

How To Present Marketing Effectiveness

So you know how to measure marketing effectiveness, but how do you best share this information with external stakeholders? An insightful marketing report can show clients exactly how impactful last quarter's marketing campaign was on business.

These metrics can also be used in requesting a higher marketing budget or determining strategies for the future.

Here's how to prepare your presentation, from the data to include and how to organize it to truly show marketing effectiveness.

Data to Include

Typically, a marketing report will review quarterly campaigns. First, you want to include the goals of the marketing strategy for that quarter to measure the actual results against the expected outcomes. Include all methods of marketing, such as content, social and/or email, and their accompanying KPIs .

Also, include market research to identify the target audience within the report and ensure external stakeholders know why your strategy addresses this specific audience through these specific methods.

The aforementioned KPIs like conversion rates, social engagement, revenue as it relates to marketing campaigns, click-through rates for emails, and customer retention rates can all be included in the report for external stakeholders.

Organizing the Presentation

The presentation should be a sensible roadmap, starting with the goals and expected outcomes and leading through the metrics measured for each type of marketing. Goals can include traffic numbers, revenue, customer satisfaction, or lead generation.

Organize metrics by social, email, content, and any other inbound or outbound marketing types you pursued over the quarter. You can also note specific goals and results for each type of marketing.

Don't forget to include explanations. Share what is doing well, and why; also outline what is underperforming, why, and how you plan to tackle that next quarter.

KPIs to Prove Effectiveness

Again, KPIs are crucial to share with external stakeholders, as they will clearly showcase marketing effectiveness.

For content marketing, show lead generation, conversion rates, bounce rates, and even SEO-related metrics like page rank on the search engine results page (SERP).

Email marketing should outline delivery, open and click-through rates. You can also analyze bounce rate, both emails that bounced back from unavailable email addresses and from your website's pages that include email signups. Additional email marketing KPIs to consider are the number of emails sent, new subscribers for the quarter and unsubscribes per email sent.

Social media insights can also focus on lead generation and engagement rates. As social continues to develop, some revenue rates will be gauged directly from social, as platforms add shopping functions.

Measure Marketing Effectiveness To Inform Goals

You might spend weeks pouring energy into an email marketing campaign that just doesn't generate the leads you had expected while leads are pouring in through social despite a lack of focused efforts there.

Without reviewing and analyzing your marketing strategies, it's hard to know where to best channel your time, creative energy, and budget to continue boosting your pipeline and revenues.

Marketing effectiveness uses key metrics to identify high and low points of your marketing strategies, so you can share this information with external stakeholders and better inform future strategies and goals.

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Explore the Levels of Change Management

Metrics for Measuring Change Management

how to evaluate the effectiveness of a business plan

Written by Andrew Horlick

Updated: December 19, 2023

Published: November 1, 2023

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Change practitioners are increasingly expected to measure the contribution of their change management activities to achieving success for their change projects. If you aren’t doing so already, you should begin including a measurement strategy in your structured change management approach. Why? Our research indicates a positive correlation between measuring compliance and overall performance and meeting and exceeding project objectives. 

Prosci asked participants in the 12 th Edition of Prosci’s Best Practices in Change Management research, "Did you measure compliance with the change and your overall performance in meeting project objectives?” and 63% agreed or strongly agreed with the statement. Of those who measured compliance of overall performance, 76% met or exceeded project objectives. In contrast, only 24% of the respondents who did not measure compliance and overall performance met or exceeded objectives.

What to Know Before Measuring Change Management Effectiveness

Having a common definition of success for your project or initiative is a critical prerequisite to measuring change management effectiveness. Defining success takes place at project initiation or earlier, and includes identifying the project’s objectives (what the project will achieve) and the organizational benefits (what the organization will gain).

"40% of respondents in our research identified the lack of alignment on goals and objectives as the main reason change success was not defined for their change projects."

As a first step, you should engage your key stakeholders—including your primary sponsor, senior leaders of the impacted groups, subject matter experts, and the project manager—in co-creating a shared definition of success for your project. This effort may require you to identify and facilitate any misalignment that exists among the key stakeholders.

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According to our research, one of the major obstacles to defining change success at a detailed level is difficulty identifying appropriate KPI’s (reported by 29% of respondents). If you anticipate or are experiencing this obstacle on your project, you can:

  • Encourage project sponsors and the project team to clearly define success criteria early on, whether for a traditional sequential project or an iterative project (e.g., sprints or releases)
  • Advocate for a definition of success that extends beyond technical implementation to include measuring adoption and use of the change by impacted individuals and groups
  • Introduce “people side” metrics early in the project when technical installation metrics are being defined
  • Limit the number of change success metrics for the project to a few simple, trackable metrics

Once you agree on a definition of success for your project, the second step is to engage your key stakeholders in identifying the key performance indicators (KPIs) for measuring the effectiveness of your change management plans and activities.

The next step is to establish a regular cadence of monitoring progress. This means tracking the KPIs throughout the project lifecycle, analyzing the results, and identifying and taking adaptive actions.

"During the early stage of your change, be sure to present a case for the resources you will need to measure progress over time. You can do this by linking effective adoption and usage to project results and outcomes, including ROI. How much of the project’s expected ROI depends on adoption and usage?"

3 Levels of Performance Metrics for Change Management Projects

Measuring and monitoring effectiveness at three levels of performance—organizational performance, individual performance, and change management performance—enables you to create clarity and alignment on what your change aims to deliver. The three levels are interdependent and collectively provide a holistic framework for measuring overall performance.

Performace image

How well did we do change management? This is the plain language question we need to answer to measure change management performance. When we do change management effectively, we prepare, equip and support people to be able to adopt and proficiently use a change in their work.

The metrics for this level of performance measure the completion, execution and effectiveness of the application of the Prosci Methodology. The change practitioner is primarily accountable for achieving the change management performance metrics.

The metrics are typically activity-oriented and could include:

  • Completeness of the definition of change success
  • Completeness of the change management strategy
  • Tracking progress in executing the change management strategy
  • Completeness of the master change management plan
  • Tracking progress of activating the core roles (primary sponsor, sponsor coalition members, and people managers)
  • Tracking progress to plan for executing change management plans and activities
  • Completeness of the change management closeout
  • Preparing and activating sustainment roles
  • Tracking progress to plan for executing sustainment plan
  • Execution of transferring knowledge and assets to the group responsible for sustaining the change

2. Individual Performance

How effectively did impacted individuals adopt and use the change? This is the plain language question we answer when we measure individual performance. When we achieve a critical mass of people adopting and using the change proficiently, we begin to realize organizational benefits. Measurement involves assessing individual and group progress in transitioning through the five elements of the ADKAR Model (Awareness, Desire, Knowledge, Ability and Reinforcement). Because the individual is the unit of change, measuring the progress of individual transitions is a leading indicator of the potential for adoption and use of a change. When individuals and groups achieve Ability, we can start to measure outcomes, i.e., how effectively they are adopting and using the change in their work. We measure the outcomes by assessing three human factors:

  • Speed of adoption of the change (how quickly)
  • Ultimate utilization of the change (how many)
  • Proficiency in applying the change (how well)

The specific metrics you select for each of these three human factors will depend on the type of change you are implementing and the industry. People managers are primarily accountable for ensuring the achievement of individual performance metrics.

Some examples of specific metrics or methods for measuring each of the three human factors include:

Speed of adoption

  • Time required for employees to learn and apply new skills during and after training
  • Number of people using the new system at go-live, 10 days after go-live, 30 days after go-live, etc.
  • Tracking frequency of use, number of users, number of website visits, etc.

Ultimate utilization

  • Measuring compliance with using a new business process through process audits
  • Tracking use of a new system post-implementation by comparing the number of employees using the system to the total number of employees impacted by the change
  • Estimating ultimate utilization by observing and monitoring employees working post-implementation

Proficiency

  • Comparing work performance post-implementation against established KPIs
  • Tracking the number of issues reported to support groups and help desks
  • Conducting “show me” testing that requires employees to demonstrate their level of proficiency

3. Organizational Performance

Did the initiative deliver what was expected? This is the plain language question we answer when we measure organizational performance. Success is defined as meeting or exceeding project objectives and realizing organizational benefits that are sustained over time.

The primary sponsor is accountable for clearly identifying the definition of success for the change and ensuring that the project objectives and organizational benefits are achieved. The change practitioner extracts and packages the definition of success by asking great questions of the key stakeholders and ensuring that the stakeholders are aligned with the definition of success.

The project manager is responsible for ensuring that the project objectives are defined and refined, as required, over the project lifecycle. They are also responsible for establishing and tracking KPIs that are specific to the type of change being implemented.

Change practitioners use the Prosci Change Triangle (PCT) Assessment to measure project health over the project lifecycle. Project health is a leading indicator of the potential for meeting or exceeding project objectives and realizing organizational benefits.

Change Management Metrics and Measurement

As the discipline of change management continues to evolve, the ability to clearly define success and measure results and outcomes on change projects are increasingly important skills for change practitioners to develop. You can learn more about how to measure the effectiveness of change management on a real project from your organization by attending the Prosci Change Management Certification Program.

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Andrew is a Prosci Senior Principal, Global Learning Product Development. He has over three decades of experience as a change management practitioner, instructor and leadership coach, supporting individuals and organizations to build change capability. Andrew's goal is to help change practitioners and change leaders develop the knowledge and ability they need to enable successful change for their organizations.

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