Part 2 Internal Strategy

INNOVATION: EVALUATION AND CONTROL

 EVALUATION

1. Where are we now compared with where we want to be ?

2. What lies ahead that can affect us either positively or negatively ?
3. Where will we end up if we continue on this path ?

GAP ANALYSIS

Where are we now ?

1. Strategic environment evaluation
2. External environment evaluation
3. Information systems evaluation
4. Structural analysis evaluation
What lies ahead ?
- Scanning the environment for changes
- Future Outlook

Where will we end up ?

CONTROL
PLANNING IMPLEMENTATION
Where are we now? What to do now versus later?
Where do we want to be? What requires the most time , attention, or
specified skills?
What should be delegated and to whom?

CONTROL EVALUATION
Where are we compared to where we want to
be?
What do we need to change?
What is coming that we need to be aware of?
Where are we going if we keep on this path?
Is it where we thought we would be?
 TYPES OF CONTROL
• FINANCIAL
• STRATEGIC
• CULTURAL
Financial Controls: It focus on gaps between the desired financial outcome and those actually
produced by the firm. Eg: Sales growth, profit, expenses.

Strategic Controls: It focus on the firm’s meeting of strategic goals. An innovative firms need
strategic controls to ensure that the appropriate actions are taken today to help the firm tomorrow.
Eg: whether to expand the firm’s innovation efforts to develop a new product line or a new process
within the firm.

Cultural Controls: It refers to the ability to have individuals act in the manner desired within the
firm. Eg: the strength of cultural control comes from the relationship within the firm that encourage
individuals to act in a certain way.
Types of Controls: Advantages and Disadvantages

Advantages Disadvantages Examples

Financial Quantitative Analysis paralysis is % profit increase

possible from new products
Easy to interpret
Can become narrow
Internally focused

Sets direction Hard to justify based on

some financials
Strategic More qualitative Increase market
Can lose sight of where share
Fits Environment
the firm is

Very behavioral Requires managers to

be involved on a more
Very Qualitative Value enhancement
Cultural personal level
 Organizational levels and Control factors
• Board of Directors
• Top Management
• Divisional Managers and Team Leaders
• Department Managers and Team Members

Implementing Evaluation and Control

Integrating Evaluation and Control: Planning
Interaction of Strategic Concerns
Strategic Process Questions
Strategic Elements Analyze Act

What are the key issues for Develop template for

our environment organizational actions
What are our competitors Set measurable objectives for
Planning
doing? innovation

What do we do now? Set up structure to support

strategy
What can we do later?
Test progress against the plan
Implementation What actions are needed to
close the gaps?

Are we measuring what we Develop means of analysis and

are interested in? information sharing
How do we make Make adjustments
Evaluation and
adjustments?
Control
 Integrating Evaluation and Control: Implementation
Organizational Structure
Divisional Structure
Strategic Business Units

Validating the Evaluation and Control Process

Other concerns in Evaluation and Control

• Organizational Focus
• Creation of Value
• Best Practices
Key Areas and Their Importance

Key Areas to Consider Importance

Organizational Focus Must remember for a large organization, it

is the total organization performance that
matters

Creation of Value Accumulation of effort to produce new

ideas that add value in the market place
or for stakeholders is the goal

Best Practices New technologies and competitive

opportunities can develop