How Often Should A Company Revise Its Strategic Plan?

As the rate of innovation, disruption, and change accelerates across all sectors private, public, and nonprofit, the requirements of strategic planning are called into question. New methodologies, techniques and tools such as OKRs come to the fore challenging organizations to adopt shorter timetables and be more nimble in the formulation of strategy, evaluating performance, and making course corrections. In the era of big data, performance analytics, and realtime information, the clarion call for increasing the speed of strategy setting and questioning its shelf-life based on results presents a fundamental challenge to the theory and practice of strategic management.

Today’s organization leaders must maintain strategic focus and be visibly engaged in rolling out strategy, reviewing performance, managing change, and optimizing processes. Strategy setting is predicated on environmental assessment work to build shared understanding of trends and factors, positive and negative, expected to impact missioncritical work and visioncritical achievement over the life of the plan. If the unexpected occurs disrupting an organization’s operating environment, mission, and service to core customers or clients, it’s an alarm to address affected elements of the plan. This alarm mechanism applies as well to unexpected changes resulting from the execution of strategy itself. In either scenario, having a perpetual monitoring and evaluation process in place for both strategic level performance and changes that come from outside and within the organization is required. 

How To Evaluate The Effectiveness Of A Strategic Plan

Keeping up with innovation, disruption, and change can be a primary reason why so many organizations can have such different levels of success utilizing similar strategic management models – what’s right for one, based on capacity, capability and culture, might not be right for another. Conditions within an organization play a pivotal role in informing the design and technical requirements for a strategic planning and management system that fits. A universal requirement here is to integrate a perpetual process of performance review to ensure your organization doesn’t fall behind by missing emerging opportunities or fall prey to imminent threats.

Perpetual Review of Strategic Plans Does Not Mean Constantly Shifting Goals and Objectives 

Before diving into the specifics of a perpetual review process, it’s important to note that while it involves real-time evaluation, perpetual review is not an excuse to lose sight of the long view to your overall strategy. This approach should enhance, not supplant, strategic level focus on primary goals and vision. Organizations that impulsively go after “the new thing” tend to struggle and often implement an otherwise successful strategy at the wrong time.

Perpetual review also doesn’t mean you need to formally create a new plan every time you review performance; it means making micro-changes, or adding new or revising data points to your projections and models. Your strategic plan should be a living, breathing thing, as you constantly reassess and pivot as needed. During regular quarterly reviews cover all of the new factors in your environment, review modifications you’ve made to your plan and plot out any significant changes that have arisen from your team’s ongoing strategic plan evaluations.

What Perpetual Review Looks Like

Think back to studying derivatives in your calculus class: the closer two points are on a curve, the more precise the slope of the line you’re measuring. The same concept applies to your strategic plan’s trajectory: the more data points you have at close intervals, the more accurate you can be with your projections and plans.

The common prescription is to perform quarterly reviews and annual updates, but what if big changes are happening right now? If you have to wait months to consider how your organization should react, you’re likely to miss that window of opportunity.

As the year progresses, assessing your strategic plan involves a few key steps:

  • Assess your performance – how close did you come to meeting your performance targets?
  • Challenge your assumptions – are the foundations of your plan still sound?
  • Critique your operations – are your current processes the most effective means of achieving your goals?
  • Look at how competitors are shifting – what do they know that you don’t?
  • Consider the impact of major industry or world events – how will they affect you?
  • Examine new opportunities that have arisen – are they worth pursuing?

The question is how to actually approach these questions on a regular basis when evaluating a strategic plan. After all, if updating a strategic plan was easy, every business would do it weekly.

Understanding How Often to Revise a Strategic Plan

The key to understanding this approach is to think of it like this: instead of revamping your whole plan in one fell swoop, you’re continuously working through the research stage piece by piece. Quarterly meetings aren’t going away, but through this process of continuously gathering data, you’re improving your knowledge about the state of your organization and making those meetings much more productive. And if you discover changes that need to be addressed immediately, you’re already informed enough to take action without having to start your analysis from scratch.

This approach yields additional benefits to executives who struggle to balance the responsibility of what their business is doing now with what it is going to be doing in the future. With frequent review, evaluation, and analysis of your strategic plan, you’ll have much more familiarity with all of the key factors of your market, so you’ll be aware of any upcoming challenges or areas where your current plan may become infeasible or clash with future initiatives. Constant evaluation of your plan lets you bring the present and future closer together.

Getting Started with Perpetual Review

Theory is nice, but how do you implement this perpetual review approach on a day-to-day basis? The exact form will vary from organization to organization, but a sample approach might look something like this:

  1. Walk through your strategic plan as it exists now, breaking it up into manageable pieces that are distinct enough to be easily analyzed in the context of new developments. Establish who will be responsible for monitoring the strategic environment for each piece of the plan.
  2. Use these pieces to build an outline, starting from the highest level – you can use the five steps listed above to start. But don’t get too granular; the whole point of this exercise is to make constant review feasible without a large meeting.
  3. Enter your outline into some sort of collaboration tool, such as Google Docs. This is where you will compile all of the new information you gather, such as client interactions, market shifts and competitor actions.
  4. Populate this document as new information comes to light, adding each piece under the relevant bullet point of your strategic plan’s outline. Include links to related news articles or documents and references to sources, and add personal notes such as ideas and questions. Use tags and formatting to keep all of the information clear, and perform concentrated cleanups as necessary to remove extraneous information or obsolete links.
  5. Periodically meet with your team to go through and evaluate the changes and updates that have occurred in this time, and discuss if these developments have impacted your strategic plan. If nothing major has changed, you’ve still gained a deeper understanding of where your organization finds itself at that point in time. If something has changed, you’re informed enough to take action immediately.

Perpetual Review and You

How your organization applies this approach will depend on how you presently structure strategic plan reviews within the overall context of developing, implementing, and evaluating strategy…there is no one-size-fits-all solution.

To understand the logic and requirements that go into setting up a process for strategic evaluation, consider taking our 10-week instructorled “live online” strategic management performance course. You’ll learn the required phases, practices and tools used in effective strategic planning, implementation, and assessment, as we break down the strategic management process into well-defined manageable steps.

For more information about the strategic management online course, strategic planning consulting, or if you have questions about how to evaluate a strategic plan, contact us today.

LBL Strategies Team