The pandemic has changed a lot – some accelerated and unfortunately brought a lot to a complete standstill. Numerous companies have used the last few months to fine-tune their business model and strategy. They are currently working intensively on anchoring the MVV statement (mission, vision, values) and strategic goals and driving forward strategy execution.

With the current “on-sight drive” it is immensely important to have an eye on the environment (the outside) and to continuously align inside actions accordingly. This takes place in different time horizons, which I will briefly discuss below.

Weekly reviews

Covey et al. call such reviews WIG session (see disciplines 3 and 4 / step 5 of 4DX), Kaplan et al. operational review meetings, others speak of shopfloor meetings. In terms of content, in addition to day-to-day business, it is important to continuously take care of the progress in implementing strategic (breakthrough) goals. Even with clearly defined goals, clear actions and measures, as well as a meaningful scoreboard, it is necessary to regularly take the team into responsibility.

For a weekly review – sometimes these reviews even take place with a higher frequency – there is a fixed agenda! This is not only about the commitments of the last week and the illustration of the results in the scoreboard, but above all a look into the next week with a clear reference to the results.

Anyone who only wants to carry out such reviews with a longer period of time has not understood the point. Such reviews are not just about corrections, but also about confirmation and reward!

If you want to know more about possible obstacles or success factors, I recommend David Moser’s elaboration.

The weekly review focuses on the following key questions:

  • Is our department or our team in control?
  • Where do we stand financially and in terms of performance?
  • Are our metrics and scoreboards aligned with the strategy?
  • Will driver models and variance analyzes be used (in perspective)?
  • Have you decided on the follow-up program or the commitments before finishing the review?

Quarterly reviews

Here, too, there are different terms in the companies: Covey et al. address such reviews as part of 4DX as a quarterly check, Kaplan et al. provide phase 4 for this in their “Closed-Loop Management System”.

As a rule, management teams in companies plan such reviews in order

  • to discuss whether the strategy execution is still on the right track,
  • to recognize where problems arise during execution (e.g. data, procedural, with a view to culture and / or leadership),
  • determine why the problems are occurring
  • recommend measures to remedy the cause(s) and
  • assign responsibilities for achieving the desired performance.

Thinking of strategy and problem solutions within the framework of the PDCA cycle, quarterly reviews represent “check” and “adjust” in strategy execution.

In advance of the review, data on the current status of ongoing measures and initiatives are exchanged along the basis of measured values defined in the BSC. The meeting time focuses on discussing and selecting action plans for the issues that have arisen since the last quarterly review.

The quarterly review focuses on the following key questions:

  • Are we implementing our strategy as planned? Where do deviations exist? Why?
  • Have the strategic initiatives (programs, projects, measures) been chosen correctly to close strategic gaps, or are adjustments necessary?
  • Do we spend enough time to steer strategic, company-wide / cross-company initiatives (programs, projects, measures) in a targeted manner towards results?
  • How well does our topic monitoring, our initiative management, as well as the coordination with possibly existing committees in the company that also deal with strategy execution work?

Annual reviews

In the annual review – the term strategy update is sometimes used – it is checked whether the basic strategic assumptions are still valid. The strategy is not only questioned, but adjusted if necessary. The management team evaluates the performance of the strategy (execution) taking into account recent changes in the external environment. In addition to internal and external strategic analyzes, it is about statistical summaries of the interrelationships between strategic metrics or measured variables.

To answer the two essential questions –

  • in which areas do we have to be different?
  • in which areas do we need to be better?

– in my opinion, based on Haake / Seiler, the following task packages or bundle of measures are necessary for this review or update:

(1) Check strategy execution:

  • Were (interim) goals of the action plans achieved?
  • Is execution on schedule?
  • Are costs / resources within budget?

Instrument 1 “Create a new basis for decision-making: strategic goals and criteria” can be deployed here. An easily understandable, transparent and common KPI framework with the most important short, medium and long-term goals is used for this.

(2) Analyze deviations:

  • Are the strategic goals too ambitious? View of key earnings figures and early indicators in connection with the KPIs of the business cases by division, company division, etc.
  • Have we made wrong assumptions or have the premises changed?
  • Do we lack the necessary resources?
  • Is the efficiency in execution inadequate?

Instrument 2 “Review current activities: Targeted portfolio optimization” can be deployed here. All currently existing strategic projects and activities can, for example, be collected and evaluated in a structured manner using a decision matrix.

(3) Check framework conditions:

Are there any new findings or changes in the environment (PESTEL, etc.), such as

  • changed customer behavior? Findings from customer journeys and touchpoints?
  • new technologies such as AI?
  • new competitors in the market?
  • new success factors?
  • new legal requirements?
  • etc.

Two instruments can be deployed here:

  • Instrument 3: “Recording and assessing the changed environment: opportunities and risks”. As part of the environmental analysis, all relevant external influencing factors are collected and evaluated in a structured manner.
  • Instrument 4: “Review the existing business model: strengths and weaknesses”. In addition to the environmental analysis, the internal influencing factors and their relationships with the environment are viewed and evaluated in a structured manner.

(4) Derive measures:

  • Are further measures necessary?
  • Do action plans need to be adjusted?
  • Do programs have to be initiated to close skills gaps?
  • Do the BSC and the strategy map have to be adjusted?
  • What are the effects on strategic planning?

Two instruments can be deployed here:

  • Instrument 5: “Renew strategic planning: New strategic fields of action”. This is used to analytically and step-by-step determine and evaluate the possible strategic fields of action to achieve short and long-term goals;
  • Instrument 6: “Establishing a strategic roadmap: specific options for action”. The aim here is to define the specific measures and solutions to achieve short and long-term goals.

More detailed explanations of the six instruments mentioned can be found in publications by Lanzer/Sauberschwarz/Weiß and by Kerth/Asum/Stich.

Conclusion

As a result, a dynamic, systematically integrated strategy process is established. Such a process links established elements of strategy work with the business model as an independent strategy element of “being different” and sets clear goals for “being better”. Between the strategic analysis and the strategic action program, there is a model (vision, mission, guiding principle, values), business model and target system.

The annual review (phase 5 in the closed-loop management system) is of particular importance here. The management team checks the validity of the strategy – not just the execution -, makes adjustments if necessary and starts the strategy cycle from the beginning.

The following applies to all three of the above reviews: Meetings start and end on time. Attendance is mandatory so that members build trust and confidence in one another and understand that each person is attending the meeting because they have essential knowledge and experience to contribute. The sessions are data driven, with participants having studied the relevant data beforehand. They spend their time in meetings solving problems, learning, and formulating commitments without passively listening to reports. The meetings encourage open discussion among all participants, regardless of rank. The managers emphasize the importance of making decisions and focusing on “what is right” and not “who is right”.