2.2.3 Measuring and Evaluating Performance

The final stage in the strategic management process consists of establishing a review mechanism to assess the performance of strategic decisions, the need to occasionally modify or change them mid-stream, and the means to determine their effectiveness and future steps that may be needed. Note that in Figure 2.2, the evaluation process involves several feedback loops to earlier steps, as a firm recognizes that the need to change its strategy may lead to significant up-stream rethinking. For example, if the evaluation stage of the process demonstrates a misreading of the marketplace for a company's product line, a natural response would be to rethink their external audit in light of this new information. The measurement of strategy is highly important here and reinforces the need to create objectives that are quantifiable, time bound, and specific. It is only to the degree that objectives were correctly developed a priori that a company is able to generate reliable and actionable information downstream.

Project opportunities need to be evaluated against a set of criteria such as that proposed above in order to ensure that we are attempting to develop products and/or processes that enhance our strategic vision rather than distract from it. As we will discover in a future lesson on project selection, the goal of strategic project management is to create a vision for the company's future and then assess project opportunities in terms of whether or not they are able to contribute to that vision.