MGT. 406- STRATEGIC MGT.

CHAPTER 9. STRATEGY MONITORING

9.1 Strategic monitoring tools and techniques for successful strategic plan implementation
9.2 Strategic planning process review
9.3 Practical framework for evaluating strategies.
9.4 Elements of the most effective dashboard for organizational success and balance scorecard.
9.5 Contingency planning in strategy evaluation.
9.6 Strategy monitoring and review process
9.7 Continuous improvement framework

9.1 STRATEGIC MONITORING TOOLS AND TECHNIQUES FOR SUCCESSFUL STRATEGIC PLAN
IMPLEMENTATION

A strategic plan is only as effective as its implementation, and successful implementation requires proactive strategic
monitoring.

The ultimate effectiveness of a strategic plan rests in its use as a framework for decision making that builds upon a
common mission, vision, and guiding principles held by the community. Operational execution of a strategic plan provides
the following advantages:

A strategic plan is only as effective as its implementation, and successful implementation requires proactive strategic
monitoring. The ultimate effectiveness of a strategic plan rests in its use as a framework for decision making that builds
upon a common mission, vision, and guiding principles held by the community. Operational execution of a strategic plan
provides the following advantages:
● Articulates organizational priorities and stakeholder values
● Aligns workforce and resources around student outcomes
● Simplifies goal setting and decision making frameworks
● Aligns the Board, central office, and schools around a single set of goals and objectives
● Allows a unified vision and stakeholder values to filter through the system
● Allows flexibility to be responsive to unique culture and priorities
● Creates accountability for developing systems and processes outlined in the strategic plan
● Provides a communication vehicle to inform stakeholders about district initiatives

While the benefits of strategic planning are vast, many strategic plans fail to achieve desired outcomes in the
implementation phase. A strategic plan that collects dust on a shelf and fails to being integrated throughout the district will
not be successful. Every educator remembers a time when a research-based program failed to achieve its intended
outcomes due to a lack of implementation fidelity, time, resources, support, or professional development. In the same
way, strategic plans must be fully implemented and realized to have the desired impact on students. The only way to
ensure a successful implementation of a strategic plan is through strategic monitoring.

Strategic Monitoring System is a system to measure progress in regular intervals. It is the process of regular observing
and recording of activities that takes place in a project. It also involves giving feedback about the progress of the project. It
helps to assure that you’re actually performing the action, according to plan. That you’re "on track." Got to be sure on the
results achieve whether they align with objectives intended to accomplish. It helps to take corrective action, not only on
Strategies but also on Planning. It provides the essential link between the written plan and the day-to-day operation of
your business.

A monitoring and evaluation strategy enables at a high level, an effective strategy to allow for the ongoing review,
analysis and understanding of the performance of a project (or program) through its life. This sets a framework to enable
correct and accurate reporting, provide a basis for continuous improvement and mechanisms to evaluate the successes
and challenges faced by programs in the hope of learning from these issues.

A monitoring strategy is a framework within which you can plan your monitoring and reporting. An integrated strategy
should provide for the different types of monitoring you do and identify connections with monitoring carried out by other
organizations. It should describe how monitoring will be linked into reviews of policy and operations and what sort of
reporting there will be on the results of monitoring. Developing a strategy before you begin monitoring can help you to
focus your efforts so you make the best use of the resources you have available.

Key questions that a monitoring strategy should address include:

• What are the purposes of your monitoring? Why is it important and what will it be used for?
• What types of monitoring will you be doing and how do they relate to each other?
• What methodologies will you use?
• How will the results of monitoring be used to influence policy and other decision-making? What mechanisms will
you use to ensure effective feedback between monitoring and decision-making?
• How will you decide what issues to monitor and when? What criteria will you use to decide priorities?
• What framework and criteria will you use to select indicators/ measures for the issues?
• How will you collect and manage data to ensure it is of good quality and will be consistent over time? How will you
ensure you can retrieve it in a usable form for analysis and reporting at the times you need it?
• Who will you be reporting the results to? What will the information in reports be used for? What forms of reporting
will you use to ensure it is effective?
• What are your timeframes for implementing and reviewing the strategy?
• Who will have overall responsibility for implementing the strategy? Who else will be involved and what will their
roles be?

In answering these questions, it is important to keep in mind what resources you have available (or what additional
resources you can realistically obtain). If you have few resources, focus your strategy on getting good information about
some key priority issues rather than planning comprehensive monitoring programmes. Think about what resources you
will need to keep monitoring programmes going over time, as well as those required for the first round of monitoring.

When developing a monitoring strategy, allow for it to evolve over time. Put the framework for monitoring in place
and make room to incorporate or change some of the details as you begin to implement the strategy.
In practice, an overarching monitoring strategy and more detailed monitoring plans for particular issues are sometimes
combined into a single document.

Monitoring is essential. It tells you if your service is up, down, fast, slow, and functioning as designed. When
something inevitably breaks, a monitoring tool can notify you via alerts and help diagnose the problem. An effective
monitoring strategy can allow organizations to reap significant benefits including:
• Protecting revenue, brand, and security
• Identification of issues before customers are impacted
• Creating feedback loops and stability
• Gathering information on usage and usability
• Experimenting with A/B scenarios
• Collecting information from real users

But what exactly are the components of an effective monitoring strategy? The report talks about analyzing log files
and tracking system resources such as memory, storage, and processing power. This is a good start but to achieve all the
benefits listed above, you have to do more than analyze the systems and logs. A comprehensive monitoring strategy must
include synthetic and real user monitoring (RUM).

Applications today are complex with components being delivered by first and third parties, APIs, CDNs, the cloud,
and physical data centers. If you’re only monitoring your infrastructure and the content you deliver, issues will be missed.
Synthetic monitoring from globally distributed locations enables your organization to test not just the infrastructure but all
the additional dependencies. Everything can be fine inside your firewall and with your systems, but users may still be
experiencing problems. Monitor the application the same way a user accesses it to fully understand the digital experience.

Users are geographically distributed and access applications across a wide range of devices and connectivity.
Synthetic monitoring may not cover all geographies, that’s one place where RUM can help fill in the gaps. RUM collects
data from real visitors to your application providing insight into how users are interacting with the site, what paths they are
taking through an application, and how the pages are performing. RUM can expand the insights you are collecting via
synthetic monitoring and logs.

Collecting monitoring data is the easy part, the harder part is determining which data to collect and ensure that all
viewpoints are being included.

Here are 10 tips to create a comprehensive monitoring strategy:

1. Monitor the components and the whole. System level, component level, and overall application metrics need to be
included to get the full picture.
2. Analyze first and third party performance. Problems with a third party affect the overall digital experience just as
much as problems with first party content.
3. Measure individual pages and multi-step transactions. Users are visiting more than a single page; you should be
monitoring more than the home page.
4. Configure alerts to be notified when performance varies from a baseline. Early identification of issues can help
resolve problems before customers are impacted.
5. Compare your performance to competitors or industry leaders. Performance is relative, you are being compared to
other sites on a daily basis, do you know how you stack up?
6. Monitor from the viewpoint of your users. Capture metrics from real users to get the broadest coverage and use
those locations to influence where to capture synthetic measurements from.
7. Measure performance across multiple connection types. Performance and availability can vary widely across
connection types include a representative sample of your users.
8. Align metrics with business objectives. Why should others in the organization care about a metric? Describe how
the monitoring data is relevant to objectives such as increasing customer loyalty, increasing revenue, or reducing
costs.
 9. Re-evaluate your strategy on a regular basis. As your company grows, and your application changes, your
monitoring strategy should be re-evaluated. Are you still measuring from the geographies that matter? Have new
components been introduced that need to be monitored?
10. Look for the anomalies and outliers. We can learn more from the unexpected than from the everyday occurrences.

Creating a monitoring strategy isn’t easy, but the time invested will be worthwhile in the long run. Company’s need
effective ways to monitor and evaluate a strategic plan and its results. These strategic planning activities are necessary
both to measure the results obtained and to evaluate the progress of the company’s global and specific objectives by
tracking goals and indicators.

Just as you check directions along a road to see if you are nearing the end of your journey, it is just as important to
check that the business and process development that the company has planned is on the right track by using a follow up
plan.

There are several activities that need to be properly coordinated and that we will present in a didactic way so that you
definitely understand what strategic planning is for. When working on a strategic plan, it is essential to define an indicator
monitoring plan that allows the assessment of whether the company’s plan is achieving the expected results.

But before we look at the entire strategic planning process, it is important to understand this concept clearly. After all, if
we do not know what the strategic plan of the organization is for, it will be worthless to control the action plan and the
monitoring and evaluation of results.

According to the master, Peter Drucker:

“Strategic planning is a continuous process of systematically, and with the greatest possible knowledge of the
future, making current decisions that involve risks; systematically organizing the activities required to execute these
decisions and, through organized and systematic feedback, measuring the outcome of those decisions against
expectations”

In other words, planning and monitoring activities are closely linked! That is what he means by “constant feedback.”
As for decision making, he makes it very clear that it is done now, with the goal of generating future, uncertain and “risk-
taking” results.

That is, our decisions may not come to fruition, which is why monitoring and evaluating a strategic plan is so
important. It is responsible for monitoring internal activities to allow managers to take corrective action if necessary.

In short, effective ways to monitor and evaluate a strategic plan must contain ways to monitor goals and indicators
to ensure that the “future” is going as planned, “doing things right.”

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.

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.

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.

During strategy execution, it is crucial to monitor progress towards achieving the goals of the implementation and to
assess whether adjustments need to be made. The strategic goals translated into operational goals with performance
indicators need to be monitored to assess whether the objectives are being achieved. Monitoring progress creates
feedback about the performance of the strategy and its execution allowing to make adjustments accordingly.

Monitoring requires clear objectives

Without concrete objectives and milestones, it is impossible to assess the progress of the execution. Each
objective also needs a target that is to be achieved. Without monitoring, an implementation effort can perform poorly
without anyone noticing.

Use progress reports to monitor the execution

After translating the strategy and its execution into clear objectives, they must be monitored through progress
reports. Progress reports are periodic reports written by organizational members responsible for the implementation of the
strategy. In these reports, it is written down what the progress is of the execution of the strategy. It describes the
objectives that are to be achieved, the degree to which they are achieved and the status of the activities that are required
to achieve the goals.

Build dashboards to track progress

Dashboards can also be used for monitoring the strategy and its execution. Dashboards allow executives and
managers to get a quick overview the progress and key issues of the strategy and its execution. However, building
dashboards often take considerable time and resources. Furthermore, dashboards tend to rigid as metrics are often not
easily and quickly changed when circumstances change. Progress reports can sometimes be a flexible and cheap
alternative to dashboards.

Strategic planning involves considering potential internal and external impacts on the organization and then mapping
out an approach to deal with these impacts. From a marketing standpoint, strategists consider customer needs,
competitive factors and organizational advantages. There are a number of tools they can use as they develop and
implement ways to ensure that the strategies and tactics developed are appropriate and plans can be effectively put into
action.

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 HYPERLINK "http://www.ram-charan.com/"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.
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.
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.
Now that it’s clear to you how to evaluate a strategic plan, let’s look at the challenges inherent in doing it.

CONCLUSIONS
Realization of your district’s desired future begins with the development of a strategic plan, but it is the ongoing
planning, implementation, and monitoring that creates that future. Full implementation of a strategic plan incorporates the
alignment of goals, planning process, and

Decision-making, while ongoing monitoring and support at the Board and administrative levels are essential to
support a continuous improvement process and effective change management. Strategic monitoring is a multi-faceted,
challenging process, but when mastered can have a profound effect of students’ educational experience.

9.2. STRATEGIC PLANNING PROCESS REVIEW

Our Strategic Planning Review Process reviews your existing strategic plan. This assessment ensures your strategy is
focused, effective and complies with modern industry standards and developments. The review process also includes a
discussion around the ways that your strategic plan can be embedded into the Governance and operational framework of
your organization, meaning strategies and day-to-day operations are all directed toward achieving set priorities.

WHAT DOES THE STRATEGIC PLAN REVIEW COVER?

The strategic planning review process explores the following questions with your existing strategic plan:
1. What has worked and what hasn’t worked in the past 12 months?
2. What has changed in your environment?
3. What do we take out and what new things do we put into the strategic plan?
Collection and analysis of key documents by facilitator (constitution, annual report, financials, strategic and risk
documents as agreed)

Strategic planning review facilitation with Board and senior staff:

1. Review Vision/Mission statement and its impact on decision making.
2. Review the current strategic plan and relevant business plans against new opportunities and risks.
3. Investigate what has been missed and what should be incorporated into the revised strategic plan.
4. Investigate any strategic assumptions that have changed and their impact on the strategic plan.
5. Discuss strategies for ensuring that the strategic plan is carried out at the various levels (Board, staff, committees etc.),
including reviewing the strategic plan regularly, and strategic thinking processes.
6. Strategies for embedding the strategic plan into performance measures and job descriptions at all levels of the
organization.

WHY SHOULD WE REVIEW YOUR STRATEGIC PLAN?

Conscious Governance have some of the most experienced strategic planning consultants available, with extensive
knowledge and expertise that provides unique and powerful strategic plans together with risk management plans that
work.

They have worked with some of the worlds most experienced strategic planners, and have facilitated and taught strategic
planning and risk management to many hundreds of organizations, continually updating their methodology to encompass
the best and most efficient strategic planning and risk management methods.

A strategic review is a structured process to identify new value-creating opportunities within a business. This could be
about improving the performance of an existing division or taking advantage of a new market adjacency opportunity. Many
companies undertake strategic reviews on an annual basis as part of their strategic planning process. Other businesses
will undertake them on a more ad hoc basis when presented with a specific opportunity or problem within the business. A
change of ownership or appointment of a new CEO can often trigger the need for a strategic review of the business as a
way to clarify the key areas of opportunity and challenges within the existing portfolio. Whatever its origins, a strategic
review should be a clear fact-based analysis of the business opportunity or issue. It provides an opportunity to step back
from day-to-day operations to assess the strategic foundations on which a business is built. The outcome of a strategic
review should be a clear set of strategic recommendations and a future roadmap for the business that charts its course
and enables increased and sustained performance now and for the future.

When utilized, a strategic plan framework aligns district resources with stakeholder values and priorities in order to guide
key decisions and initiatives. The HYA Strategic Planning Process, detailed below, provides the district with actionable
and measurable goals and a consistent communication vehicle. While the HYA Strategic Planning Process is provided as
an example of the strategic plan development process, other research-based methods of strategic plan development
should follow a similar pattern.

Our Strategic Planning Review Process reviews your existing strategic plan. This assessment ensures your strategy is
focused, effective and complies with modern industry standards and developments. The review process also includes a
discussion around the ways that your strategic plan can be embedded into the Governance and operational framework of
your organization, meaning strategies and day-to-day operations are all directed toward achieving set priorities.

What is the strategic planning process?

In the simplest terms, the strategic planning process is the method that organizations use to develop plans to achieve
overall, long-term goals.

This process differs from the project planning process, which is used to scope and assign tasks for individual projects,
or strategy mapping, which helps you determine your mission, vision, and goals.

The strategic planning process is broader—it helps you create a roadmap for which strategic objectives you should put
effort into achieving and which initiatives will be less helpful to the business. The strategic planning process steps are
outlined below.

Strategic Planning Process Steps

1. Determine your strategic position.

2. Prioritize your objectives.

3. Develop a strategic plan.

4. Execute and manage your plan.

5. Review and revise the plan.

Every business should have a strategic plan—but the number of businesses that try to operate without a defined plan (or
at least a clearly communicated one) might surprise you. Research from On Strategy shows that 86% of executive teams
spend less than one hour per month discussing strategy, and 95% of a typical workforce doesn’t understand its
organization’s strategy.

The Strategic Planning Review Process

Initial preparation work:
Collection and analysis of key documents by facilitator (constitution, annual report, financials, strategic and risk
documents as agreed)

Strategic planning review facilitation with Board and senior staff:

1. Review Vision/Mission statement and its impact on decision making.
2. Review the current strategic plan and relevant business plans against new opportunities and risks.
3. Investigate what has been missed and what should be incorporated into the revised strategic plan.
4. Investigate any strategic assumptions that have changed and their impact on the strategic plan.
5. Discuss strategies for ensuring that the strategic plan is carried out at the various levels (Board, staff, committees etc),
including reviewing the strategic plan regularly, and strategic thinking processes.
6. Strategies for embedding the strategic plan into performance measures and job descriptions at all levels of the
organisation.

The Benefits Of A Strategic Review

When conducted well, a strategic review can deliver significant benefits to a business. In addition to the direct financial
benefits of improving performance and targeting new growth opportunities, the process itself can improve alignment
between employees, senior management teams and other key stakeholders, helping to drive a high-performance culture
and clarity on the future direction of the business.

Delivering A Successful Strategic Review

● Start With The Answer

Strategic reviews are often undertaken under considerable pressure to get to an answer rapidly. Every day needs to
count. You can’t afford to spend time on research or analysis that doesn’t make the final cut. The leading strategy firms,
therefore, adopt a hypothesis-led approach to strategy formulation (e.g. McKinsey’s Decision Tree or Bain’s Answer First
approaches). By the end of day two of the project, you should have completed preliminary interviews with the relevant
stakeholders and have a good understanding of the existing available data. This is a good time to be mapping out the
potential answer and logic structure that will underpin the remaining activities. A good structure will be logical, cover all the
relevant factors that underpin the recommendation, and avoid duplication of analysis (mutually exclusive and collectively
exhaustive). Having defined the logic structure, you can then identify where the gaps are based on your current state of
knowledge, and therefore where additional analysis is needed to test an assertion or element of the recommendation.
This then becomes the basis of a focused work plan for the remainder of the project.

● Be 80/20
When operating under a severe time constraint, it is critical to be 80/20 in undertaking the new analysis. Feedback
from customers can be key, for example when considering a market adjacency opportunity or a turnaround of an existing
business. A four-week time frame is not long enough to undertake a major program of primary research. However, a short
focused online survey or series of telephone interviews with key customers can nonetheless achieve a lot in a short space
of time and help to bring the recommendations to life. An 80/20 mindset is particularly important when it comes to financial
modelling. Financial models are typically used in a strategy to illustrate the incremental financial impact of a
recommended course of action over a base case. Strategic financial modelling requires a different approach to the
detailed budgeting and other financial analyses that are typically performed within an organisation. The model should be
stripped back to the smallest set of core assumptions that enable alternative strategic scenarios to be assessed and
compared to an underlying base case. A detailed analysis of working capital or tax liabilities is rarely necessary at this
level of analysis.

● Allocate Dedicated Project Resources For The Review

 Although the exact composition of the project team to conduct the strategic review will depend on the precise scope,
the following team structure is not a bad start: Some or all of these roles may be company resources allocated to the
review. The core team structure involves a project lead, who would typically be full-time, plus potentially one or more
supporting analysts/modellers depending on the scale and complexity of the review. A project sponsor is needed to
oversee the review. The project sponsor should be a member of the senior management team who can provide
guidance and review during the project, and resolve any internal roadblocks to the analysis. If the analyst/modeller is an
external resource, it is also useful to have an allocated internal resource with a good understanding of the company’s
operational and financial data. In addition, where the review involves a new market or product opportunity, advisers with
expertise in the relevant area can add significant value based on their experience.

● Allow enough time to produce a good report

You should not underestimate the time required to distil complex strategic analysis into a clearly presented and
logically structured report. It’s therefore good practice to start planning well in advance of the final week. I try to have an
initial draft outline of the report developed by the end of week 1. Having the end output in mind early on also helps to
maintain an 80/20 focus across the project team on the key analysis that is required.

● Build in time to think about the implementation

A strategic review is a waste of time unless it is accompanied by a clear call to action and plan of attack. As well as
making clear and logical recommendations, it must also set out how those recommendations would be implemented.
Within a four week timeframe, it’s not going to be possible to set out a detailed implementation plan. Nonetheless, a high-
level view of the implementation roadmap detailing the key initiatives to be implemented and expected timeframes helps
to bring the strategy to life and can form the basis of a more detailed program plan.

9.3 PRACTICAL FRAMEWORK FOR EVALUATING STRATEGIES

Reviewing Bases of Strategy

 How have competitors reacted to our strategies?
 How have competitors’ strategies changed?
 Have major competitors’ strengths and weaknesses changed?
 Why are competitors making certain strategic changes?
 Why are some competitors’ strategies more successful than others?
 How satisfied are our competitors with their present market positions and profitability?
 How far can our major competitors be pushed before retaliating?
 How could we more effectively cooperate with our competitors? 

Measuring Organizational Performance

Strategists use common quantitative criteria to make three critical comparisons:
 Comparing the firm’s performance over different time period.
 Comparing the firm’s performance to competitors.
 Comparing the firm’s performance to industry averages.

Corrective Actions
The final phase of the controlling process occurs when entrepreneurs must decide on the action(s) required to
correct performance that deviates from the business plan. However, before any such steps can be taken, the true cause
of the deviation must be identified.
The reasons for deviations can range from unrealistic objectives to the wrong strategy being selected. It is
important to remember that not all deviations resulting from external environmental threats or opportunities have
progressed to the point that a particular outcome is likely, so corrective action may be necessary. Entrepreneurs must
remember that for each type of deviation the corrective action will differ and adjustments in any one area may necessitate
adjustments to one or more of the other factors. Adjusting the objectives, for example, is likely to require different
strategies, standards, resources, activities, and perhaps organisational structure and systems.

The final part of the strategic management process is strategy evaluation, in which managers endeavor to ensure
that the strategic decision has been correctly executed and is reaching the organization's goals. In fact, managers analyze
or appraise the progress of strategy implementation performance, attempting to identify any deviations in actual
performance from the chosen strategy that has been implemented, and then taking appropriate actions to make the
strategy work.
One type of strategy implementation is strategy evaluation. Strategy evaluation necessitates the implementation of
a computerized information system capable of providing managers with fast feedback and allowing them to act on the
information.
In practice, strategy evaluation during implementation necessitates the use of a control system, which is an inherent
aspect of the organization's monitoring system. Both techniques assist managers in keeping track of a strategic plan's
progress. Keeping track of present performance and predicting changes is the essence of strategy evaluation.
Strategy managers must analyze and track the progress of the strategic actions taken to implement the strategy on
a regular basis. The systematic review gives sufficient data to identify any differences between actual and planned
actions. Managers can then take necessary measures based on this information.

The following are the necessity of strategy evaluation:

Obtaining data for corrective actions

Organizations must carefully analyze their strategic initiatives in dynamic circumstances. Internal and external forces
change at a rapid and dramatic pace. These modifications have an impact on the strategy's implementation. Regular
evaluation of the plan as it is implemented gives useful information for corrective action.

Keeping track of progress

The tracking of progress is made easier by evaluating strategic actions on a regular basis during the implementation of
competing strategies. Managers can use the evaluation results/information to assess the current state of strategy
implementation. If development is slow, they can take immediate action.

Detection of flaws
Nobody can guarantee that a specific approach will work or that it is the best option. As a result, the strategy should be
scrutinized for faults. The strategy managers determine whether the strategy is working by looking at the results and the
future possibilities. If a fault in the strategy's implementation is discovered, they take steps to correct it.

Making managers proactive

Installation of a system for evaluation. Places managers in a systematic bind, obliging them to not/ignore the importance
of assessing the impact of changes in their organizations' settings. It reminds people not to be satisfied with their current
accomplishment. It gives them the impression that today's achievement is no guarantee of tomorrow's success.

Developing a sense of commitment

When all managers and employees are involved in the process of continuously analyzing strategy, they become
committed to keeping the organization on track to meet its goals. It's possible that the vision of the mission, the objectives
tactics, or the techniques to implementing the strategies will need to be adjusted or modified.
If corrective actions or modifications are not implemented appropriately and on time, the organization may face disastrous
results.

Requirements of Effective Strategic Evaluation Systems

To be effective and successful, a strategy-evaluation system must meet specific criteria. These are the features of a good
grading system.

The major requirements of an optimal strategy-evaluation system are discussed below:

Economical
The tasks associated with strategy evaluation must be cost-effective. Because wastage will occur if they are not
cost-effective, a balance must be maintained in acquiring information: not too much, not too little. Too much data and too
many controls can cause more harm than good.

Meaningful
The strategy-evaluation activities must be meaningful in the sense that they must be directly related to the goals for
which the strategy was chosen.

Providing useful information

The data gathered during the evaluation process must be useful. Managers can't make decisions based on
redundant information.
Providing timely information
The strategy-evaluation system should be set up in such a way that it can deliver timely information to the
appropriate managers. If information is not delivered on time, it may be deemed useless because it cannot be used when
it is needed.
Providing a true picture of events
The strategy-evaluation activities should be able to provide a complete picture of what is going on in the organization in
terms of strategy execution.

Being directed towards right persons

The strategy-evaluation system should be delivered to the proper people who are responsible for taking data-driven
decisions. As a result, rather than simply supplying information for the sake of providing information, it should aim to
facilitate.

Being elaborate and detailed

The strategy-evaluation system in large enterprises should be comprehensive and detailed. Because there are so many
departments and divisions, effective coordination is required.

Strategy Evaluation Framework: 3 Steps of Strategy Evaluation

1. Examining the underlying bases of strategy

The foundations of a strategy are internal strengths and weaknesses, as well as external opportunities and
dangers. The opportunities, risks, strengths, and weaknesses are likely to persist for some time.
When a strategy's execution takes a lengthy period, these strategy's foundations should be evaluated. A review
would reveal how competitors have reacted to the firm's strategies, how competitors have changed their strategies in
response to the firm's strategies, whether strengths and weaknesses have changed, whether new opportunities or
threats have surfaced, and whether the firm's strengths and weaknesses have changed. Finally, above all, whether the
previously recognized opportunities, threats, strengths, and weaknesses are now the same as they were when the
SWOT analysis was conducted, as well as a variety of additional issues. Managers can uncover the true reasons for
poor results by reviewing the strategy's foundations. It's possible that an unsuccessful strategy was chosen or that the
strategy was poorly implemented, or that rapid changes in external circumstances (such as changes in demand,
changes in technology, new government rules, or rival actions) prevented the organization from attaining its goals. The
review aids in the discovery of these modifications.

2. Comparing expected results with actual results

The measuring of organizational performance is the second component or activity of the strategy-evaluation
framework. Managers must evaluate the planned actions to the actual progress made toward reaching specified
goals. That is, the actual results are compared to the expected outcomes. Then, if there are any deviations, they
are discovered. Individual performance is evaluated as well. The progress toward the initial goals is assessed.

3. Taking corrective actions

If there are no substantial variations between the anticipated resort and the actual results, no corrective actions
are required. Managers will continue to offer a path of action in this environment, with corrective actions taken only
when significant deviations arise. The nature of the deviation and the causes of the divergence must be taken into
account while taking actions. Objectives, the strategy itself, organizational structure, human resources employed
on strategy implementation, policies, resource distribution, reword systems, and other instructions may be required.
9.4 ELEMENTS OF THE MOST EFFECTIVE DASHBOARD FOR ORGANIZATIONAL SUCCESS AND BALANCE
SCORECARD.

The term balanced scorecard (BSC) refers to a  strategic management performance metric used to identify and
improve various internal business functions and their resulting external outcomes. Used to measure and provide feedback
to organizations, balanced scorecards are common among companies in the United States, the United Kingdom, Japan,
and Europe. Data collection is crucial to providing quantitative results as managers and executives gather and interpret
the information. Company personnel can use this information to make better decisions for the future of their organizations.

KEY TAKEAWAYS

 A balanced scorecard is a performance metric used to identify, improve, and control a business's various functions
and resulting outcomes.
 The concept of BSCs was first introduced in 1992 by David Norton and Robert Kaplan, who took previous metric
performance measures and adapted them to include nonfinancial information.

 BSCs were originally developed for for-profit companies but were later adapted for use by nonprofits and
government agencies.

 The balanced scorecard involves measuring four main aspects of a business: Learning and growth, business
processes, customers, and finance.

 BSCs allow companies to pool information in a single report, to provide information into service and quality in
addition to financial performance, and to help improve efficiencies.

Accounting academic Dr. Robert Kaplan and business executive and theorist Dr. David Norton first introduced the
balanced scorecard. The Harvard Business Review first published it in the 1992 article "The Balanced Scorecard—
Measures That Drive Performance." Both Kaplan and Norton worked on a year-long project involving 12 top-performing
companies. Their study took previous performance measures and adapted them to include nonfinancial information.

BSCs were originally meant for for-profit companies but were later adapted for nonprofit organizations and government
agencies.

 It is meant to measure the intellectual capital of a company, such as training, skills, knowledge, and any other proprietary
information that gives it a competitive advantage in the market. The balanced scorecard model reinforces good behavior
in an organization by isolating four separate areas that need to be analyzed. These four areas, also called legs, involve:

 Learning and growth

 Business processes

 Customers

 Finance

The BSC is used to gather important information, such as objectives, measurements, initiatives, and goals, that result
from these four primary functions of a business. Companies can easily identify factors that hinder business performance
and outline strategic changes tracked by future scorecards.
The scorecard can provide information about the firm as a whole when viewing company objectives. An
organization may use the balanced scorecard model to implement strategy mapping to see where value is added within
an organization. A company may also use a BSC to develop strategic initiatives and strategic objectives.  This can be
done by assigning tasks and projects to different areas of the company in order to boost financial and operational
efficiencies, thus improving the company's bottom line.

Characteristics of the Balanced Scorecard Model (BSC)

Information is collected and analyzed from four aspects of a business:

1. Learning and growth are analyzed through the investigation of training and knowledge resources. This first leg
handles how well information is captured and how effectively employees use that information to convert it to
a competitive advantage within the industry.
2. Business processes are evaluated by investigating how well products are manufactured. Operational
management is analyzed to track any gaps, delays, bottlenecks, shortages, or waste.

3. Customer perspectives are collected to gauge customer satisfaction with the quality, price, and availability of
products or services. Customers provide feedback about their satisfaction with current products.

4. Financial data, such as sales, expenditures, and income are used to understand financial performance. These
financial metrics may include dollar amounts, financial ratios, budget variances, or income targets.
These four legs encompass the vision and strategy of an organization and require active management to analyze the data
collected.
There are dependency linkages in a strategy map with an upward direction of accumulating effects of contributions
to achieve the strategic objectives. The KPIs are not reported in isolation but rather have context to achieve the mission
and vision. The strategy map is like a force field in physics, as with magnetism, where the energy, priorities and actions of
people are mobilised, aligned and focused. One can say that maximising shareholder wealth, which is what the
executives seek, is displayed at the top of the strategy map. In this, it is not really a goal – it is a result.
An essential step in creating a balanced scorecard is to identify the mission-essential projects and initiatives that
will achieve the strategic objectives. The presence of enabling projects and initiatives goes to the heart of distinguishing a
strategic objective from just performing better at what you have already been doing.
Selecting and measuring KPIs are critical. You get what you measure, and strategy maps and scorecards serve a
greater social purpose than a technical one (although information technology and software are essential enablers).
Performance measures motivate people and focus them on what matters most. They align employees’ priorities
and work activities with strategic objectives. Performance measures enable every employee, from front-line workers up to
the executive team, to ask and answer every day: How am I performing on the important objectives? How am I doing on
what is important?
Note that the first half of this question can be easily displayed on a dial with a target; it is reported in a scorecard or
dashboard. But it is the second half of the question that is critical – “on the important objectives” – and that is derived from
the strategy map.

Benefits of a Balanced Scorecard (BSC)

There are many benefits to using a balanced scorecard. For instance, the BSC allows businesses to pool together
information and data into a single report rather than having to deal with multiple tools. This allows management to save
time, money, and resources when they need to execute reviews to improve procedures and operations.
Scorecards provide management with valuable insight into their firm's service and quality in addition to its financial
track record. By measuring all of these metrics, executives are able to train employees and other  stakeholders and
provide them with guidance and support. This allows them to communicate their goals and priorities in order to meet their
future goals.
Another key benefit of BSCs is how it helps companies reduce their reliance on inefficiencies in their processes.
This is referred to as suboptimization. This often results in reduced productivity or output, which can lead to higher costs,
lower revenue, and a breakdown in company brand names and their reputations. 1

Examples of a Balanced Scorecard (BSC)

Corporations can use their own, internal versions of BSCs, For example, banks often contact customers and
conduct surveys to gauge how well they do in their customer service. These surveys include rating recent banking visits,
with questions ranging from wait times, interactions with bank staff, and overall satisfaction. They may also ask customers
to make suggestions for improvement. Bank managers can use this information to help retrain staff if there are problems
with service or to identify any issues customers have with products, procedures, and services.
In other cases, companies may use external firms to develop reports for them. For instance, the J.D. Power survey
is one of the most common examples of a balanced scorecard. This firm provides data, insights, and advisory services to
help companies identify problems in their operations and make improvements for the future. J.D. Power does this through
surveys in various industries, including the financial services and automotive industries. Results are compiled and
reported back to the hiring firm.

Balanced Scorecard (BSC) FAQs

What Is a Balanced Scorecard and How Does It Work?
A balanced scorecard is a strategic management performance metric that helps companies identify and improve
their internal operations to help their external outcomes. It measures past performance data and provides organizations
with feedback on how to make better decisions in the future.
What Are the Four Perspectives of the Balanced Scorecard?
The four perspectives of a balanced scorecard are learning and growth, business processes, customer
perspectives, and financial data. These four areas, which are also called legs, make up a company's vision and strategy.
As such they require a firm's key personnel, whether that's the executive and/or its management team(s), to analyze the
data collected in the scorecard.

How Do You Use a Balanced Scorecard?

Balanced scorecards allow companies to measure their intellectual capital along with their financial data to break
down successes and failures in their internal processes. By compiling data from past performance in a single report,
management can identify inefficiencies, devise plans for improvement, and communicate goals and priorities to their
employees and other stakeholders.
What Are the Balanced Scorecard Benefits?
There are many benefits to using a scorecard. The most important advantages include the ability to bring
information into a single report, which can save time, money, and resources. It also allows companies to track their
performance in service and quality in addition to tracking their financial data. Scorecards also allow companies to
recognize and reduce inefficiencies.
What Is a Balanced Scorecard Example?
Corporations may use internal methods to develop scorecards. For instance, they may conduct customer service
surveys to identify the successes and failures of their products and services or they may hire external firms to do the work
for them. J.D. Power is an example of one such firm that is hired by companies to conduct research on their behalf.

The Bottom Line

Companies have a number of options available to help identify and resolve issues with their internal processes so
they can improve their financial success. Balanced scorecards allow companies to collect and study data from four key
areas, including learning and growth, business processes, customers, and finance. By pooling together information in just
one report. companies can save time, money, and resources to better train staff, communicate with stakeholders, and
improve their financial position in the market.
Another way to think about the Balanced Scorecard is as a series of leading and lagging steps (similar to  leading
and lagging KPIs, though broader as it also applies to your Strategic Objectives and Projects). Learning and Growth /
Internal Processes / Customer - these are your leading steps, as they will facilitate the delivery of your one and
primary lagging step, which is your Financial performance.
Indeed, this is one of the major criticisms of the Balanced Scorecard, that it essentially 'ends' at making more money. It's
argued that the scorecard wouldn't suit organizations such as Google and Facebook who claim their objectives go beyond
financial returns alone. 

Why this Approach to Implementing the Balanced Scorecard Makes Sense

Let's work through the theory behind implementing the Balanced Scorecard as a series of 'steps'.
Your ability to learn and grow will directly dictate your ability to better manage your internal processes. In turn,
as your internal processes improve, this will have a positive impact on your customers as well as directly reducing your
costs. The combined benefit of this lower cost/higher customer engagement in your product (essentially sales) will lead to
your end goal, increased profit and financial return.
The Balanced Scorecard isn't really about distinct perspectives, it's about the layers of a pyramid. The pyramid when
built up in the right order, leads to success. When implemented in this way, the Balanced Scorecard can be immensely
powerful in helping your organization to:

 Create a tangible road-map from the 'current state' to a more successful 'future state'.
 Identify major roadblocks and areas where you lack the critical competencies to proceed to the next stage.

 Articulate how your goals will directly help the organization to move upwards through the stages.

 Prioritize business activities in the order they need to be tackled to allow the most rapid progression through the
stages.

Specifically, the main benefit of the Balanced Scorecard is likely to come less from the creation of the perspectives
themselves (which are fairly natural and obvious categorizations for most businesses), but rather from the  strategic
management process using the perspectives as stages.
How are balanced scorecards and dashboards different?
There can be confusion about what the difference is between a balanced scorecard and a dashboard. They have a
tendency to confuse people and get used interchangeably. Each brings a different set of capabilities.
There is similar confusion differentiating strategic KPIs from normal and routine measures that can be referred to
as just operational performance indicators (PIs). KPIs ultimately are decomposed into the PIs that employees can relate to
and directly influence and affect. The adjective “key” of a KPI is the operative term here. When an organisation proudly
proclaims it has 300 or more KPIs, one must ask: “How can they all be key?”
To use a radio analogy, KPIs are what distinguish the signal from the noise – the measures of progress towards
executing the strategy.
The difference between scorecards and dashboards comes from the context in how they are applied. Scorecards
and dashboards are not contradictory. They both display measurements, but they serve different purposes. Scorecards
are intended to be strategic. Dashboards are intended to be operational. KPIs should be displayed in a balanced
scorecard, and PIs should be reported in dashboards.
A limitation with dashboards is that they do not communicate why something matters, why someone should care
about the reported measure or what the impact may be if an undesirable declining measure continues. In short,
dashboards report what can be measured. In contrast, a balanced scorecard provides the information lacking in
dashboards. Scorecards do not start with the existing data, but rather they begin with identifying what strategic projects to
complete and core processes to improve and excel in.

Here are some guidelines for understanding the differences between scorecards and dashboards:
Scorecards monitor the progress toward accomplishing strategic objectives. A scorecard displays periodic
snapshots of performance associated with an organisation’s strategic objectives and plans. Directionally upward from the
employee-centric innovation, learning and growth perspectives, KPIs should reveal the cumulative build of potential to
realised economic value. There are two key distinctions of scorecards: First, each KPI must require a predefined target
measure. Second, KPIs should include both project-based KPIs such as milestones, progress percentage of completion
and degree of planned versus accomplished outcome, as well as process-based KPIs such as customer satisfaction and
per cent on-time delivery against customer promise dates. Process improvement is important, but innovation and change
is even more important. Strategy is all about change and not just doing the same things better.

Dashboards monitor and measure processes and outputs. A dashboard is operational and reports information
typically more frequently than scorecards. The organisation’s traction and torque are reflected in the dashboard’s PI
measures. PIs serve more to monitor trends across time or results against upper- or lower-threshold boundary limits. As
PIs are monitored and responded to, the corrective actions contribute to achieving the KPI target levels with actual results.
However, each dashboard measure is reported with little regard to its relationship to other dashboard measures.
Dashboard measures do not directly reflect the context of strategic objectives. Dashboard information can be more real-
time in nature, like an automobile dashboard that lets drivers check their current speed, fuel level and engine temperature
at a glance. It follows that a dashboard should ideally be linked directly to systems that capture events as they happen,
and it should warn users through alerts or exception notifications when performance against any number of metrics
deviates from the norm or what is expected.
Strategy is more than performing better: It involves doing different things
A strategy is dynamic, never static, as executives appropriately shift directions based on their new insights and
observations. The purpose of the strategic objectives in a strategy map is to re-direct the organisation from the tyranny of
maintaining the status quo – doing the same things a bit better. Strategy is about constant change. If an organisation does
not constantly change, then it is exposed to its competitors converging to offer similar products, services and processes.
In short, strategic objectives define the changes an organisation should make to maintain a competitive edge.
As with any managerial improvement method, experience through use refines the method’s effectiveness and
impact. The plan-do-check-act (PDCA) cycle is a great practice for organisations. With improvement methods, it is difficult
to get it perfect the first time. There will always be a learning curve. Many organisations over-plan and under-execute.
With regard to KPI and PI selection, first learn the principles, and then apply them through selecting, monitoring and
refining the KPIs. Strategy maps and balanced scorecards are a craft, not a science.
A important feature of your business intelligence tools is the ability to track your organization's success and monitor
key performance indicators. Depending on your needs and the time range you want to monitor, there are a variety of
approaches to track your success metrics. Dashboards are a versatile tool for tracking strategic objectives and assessing
a company's overall efficiency. Scorecards, on the other hand, give a clear indicator of how successfully organizations are
working to attain their goals in a quick and succinct manner. Which tracking tool you should employ is mostly determined
on your needs.
Most companies now rely on dashboards and scorecards as their primary reporting tools. More crucially, it is
dependent on the metrics being recorded as well as the goals for recording this data. Before deciding on one over the
other, it's critical to understand the advantages scorecards and dashboards may provide.

What is a Dashboard?

Dashboard are centralized hubs for many reports that allow simple access to multiple datasets at the same time
Dashboards, unlike scorecards, are utilized as a real-time monitoring tool. Data is updated on a regular basis, allowing
businesses to monitor their operational success in real time. Dashboards measure performance rather than progress,
tracking measurements without comparing them to desired values. Organizations utilize dashboards on a daily basis
because they provide a more operational perspective of success than scorecards, which are focused on strategic goals.
Dashboard data is used to help make better decisions and manage teams, resources, and budgets more efficiently
on a daily basis. Dashboards provide a high-level view of an organization's overall performance for most organizations.
More importantly, dashboards assist firms in seeing their historical data as a function of their current performance
Companies can, for example, view their revenues over the last 12 months or track their month-to-month sales growth.
Marketing boards that manage campaigns and strategies from start to finish, or medical dashboards that track hospital
operations centrally, are two examples of traditional dashboards.
Dashboards may be an effective tool to communicate data-based information by displaying important, actionable
data utilizing visualization techniques. They can keep track of statistics and key performance indicators (KPIs) and show
the information in a rapid, easy-to-scan style, with the most important facts visible at a glance. The appropriate approach
to data visualization is critical to building the groundwork for a successful dashboard. Data visualization is the presentation
of data using images and visuals with the goal of assisting decision makers in seeing patterns or comprehending tough
topics that might otherwise go undetected in text-based applications.

3 Elements of a Good Dashboard

An effective dashboard contains 3 elements, namely:
1. Know your Audience
Specific questions can be asked when evaluating the audience and their needs in order to truly understand
who your audience is and tailor reports to each one. Bloom's taxonomy system is used, as well as high-level
thinking skills.

2. Tell a Story
When using dashboards or data to tell a story, the findings should be presented in an intuitive manner so
that the viewer understands everything they're viewing. This will show up in the charts and tables you select. If
you're using colored charts, you might wish to emphasize the points that are most relevant to your aim or query.
You should also be able to use a similar theme, such as color or chart type, to connect different reports or data in
the dashboard. It's a good idea to include instructions on how to utilize it or what the data might signify if your
audience needs to use the data to make important decisions.

3. Leads to Action
Part of successful story-telling is letting the data speak for itself, and the viewer should be able to connect
the many components of the dashboard together to show the various elements of the whole. This is where
analytics come into play, allowing you to display multiple reports that can be linked together. A good dashboard
leads to action and improvement as a result of its output.

8 best practices for dashboard management

Regardless of the type of dashboard reports you’re producing, here are 8 best practices to ensure you’re staying
organized, productive, and efficient:

Make sure your information is up to date. Who is getting your dashboard report and who is looking at it? Only show the
stats that are most relevant to the recipients. Also, if your dashboards are organized by recipient, team, or topic, don't add
any stats that seem out of place or unnecessary.

Use strategic metrics to your advantage. Choose carefully (quality over quantity) and make sure the metrics you're
tracking are in line with your success strategy. Look for and use compelling data that has a beneficial impact on business
decisions.

Choose measures that can be measured. Specific, Measurable, Attainable, Relevant, and Timely goals are SMART
goals. You may effectively measure your performance against standards you've set by setting SMART goals, allowing you
to objectively determine if you're on track. While both qualitative and quantitative measurements should be considered, it's
more crucial to remember that if you can't measure it, you can't manage it.

Maintain the cleanliness of your dashboards. Stay organized as much as possible. A cluttered dashboard, like a
messy workstation, can be detrimental to your productivity. If gazing at your dashboards makes you nervous, your
recipients are likely to feel the same way. Choose the fewest measurements necessary to communicate your story
completely, and you should be fine.

Keep track of data that you can use to make decisions. Although data is amazing and powerful, it can only get you so
far. What actually important is what you do with that information. Concentrate on data that can have an impact on your
operations, recruiting decisions, service level agreements, annual targets, and so on. If you have data as an FYI but can't
really do anything with it, consider whether it's worth tracking. Businesses must not only collect data, but also make data-
driven decisions.

Take the ‘at-a-glance’ test. Take a brief look at your dashboard reporting template once it's in place and see what you
can learn from it in those few minutes. Do you have an easy-to-understand visual representation of your data? Do you use
colors, bar graphs, gauges, and pie charts to communicate your point quickly and clearly? When possible, use images
instead of a lot of text and numbers.

Group your metrics into a nice grid. People prefer symmetry and organization, as well as clean lines that provide a
sense of serenity. Assemble your dashboards in this manner. Different dashboard reporting tools let you customize and
resize your buckets to make your dashboard seem exactly how you want it to. To make your dashboard report easier to
understand, group important metrics together.

Use dashboard filters. Bright Gauge is a dashboard reporting application that allows you to customize your reports with
dashboard filters. This will help you save a lot of time. A service desk manager, for example, who wants to deliver a report
to each individual technician that is specific to their projects can construct one dashboard reporting template and then a
dashboard filter that only provides data that is specific to that individual.

What is a Scorecard?

Scorecards provide a glimpse of an organization's present performance in relation to its objectives. They are useful tools
for firms that need to effectively manage performance and make strategic decisions based on the gap between existing
and desired performance. Scorecards, as a result, provide a more static perspective of an organization at a given point in
time rather than a dynamic hub for monitoring success.

Scorecards are the most frequent way to track KPIs since they focus on both the present status and the target value of
the metric being tracked. Scorecards, on the other hand, aren't live, therefore data isn't updated in real time. Instead,
scorecards are used to track strategic goals in relation to KPIs and make larger-scale judgments. These judgments might
range from tracking the progress of a certain plan to assessing the efficiency of specific teams or departments in
accomplishing objectives to recognizing problems and determining how to address them. Scorecards are periodic metrics
that are updated at regular intervals, such as weekly or monthly. The balanced scorecard is a popular management tool in
the United States, the United Kingdom, Japan and Northern Europe. Businesses that are comfortable with the level of
rigor required reap tremendous benefits. The balanced scorecard, on the other hand, necessitates a significant amount of
effort to implement and use successfully. To be successful with the balanced scorecard, businesses must have the
appropriate resources and discipline.

The balanced scorecard relies on four perspectives to monitor enterprise health. Specifically:
1. Financial: Any business's financial health is crucial to its long-term sustainability. Revenue growth, operational
income, return on equity, and other indicators of interest to owners are common measures employed by for-profit
companies.
2. Customer: The customer compares the enterprise's service to that of the competition. Industry-specific metrics
differ, but the majority are concerned with time, quality, and service levels. Customer satisfaction and enterprise
responsiveness are two metrics that are ubiquitous across most sectors. Other measurements are more specific to
a certain industry. Customers' growth and turnover are tracked by cellular phone carriers. On-time delivery and the
percentage of orders fulfilled as ordered are tracked by manufacturing companies. Consumer goods companies
track the percentage of recurring consumers and sales from products launched in the previous five years.

3. Internal process: From this vantage point, the company can assess the efficiency and effectiveness of internal
business processes and supporting technologies. Many businesses place a premium on the amount of time it takes
to take an order, onboard a new employee, or perform other internal operations. Setup time, cycle time, first pass
yield, and the time to release a new product are all things that manufacturing organizations keep track of.
Companies that are attempting to streamline internal procedures keep track of how many operations are paperless
and how many are self-service.

4. Organizational capacity: This viewpoint was originally known as "Learning and Growth," but it is now commonly
referred to as "People" by businesses that believe that individuals are the most crucial component of an
organization's ability to progress. This viewpoint evaluates the extent to which the company may evolve and
enhance the manner it achieves its objectives. People, culture, organization, and the infrastructure that supports
them are all monitored by organizational capability. Employee satisfaction/engagement, time to hire, first-year
turnover, regretted (often unwelcome) turnover, and training/education received are all common indicators.

Balanced scorecards can be utilized at every level of an organization and for any type of business. The
strategic strategy or goals of the organization will be the starting point for an effective and successful balanced
scorecard. The balanced scorecard's aims are then reiterated based on the level of the organization to which it
applies. In terms of goals and measures, a balanced scorecard for a full business will be wider and more generic
than a balanced scorecard for a division manager.
Balanced scorecards can also be constructed at the individual employee level as an evaluation tool or a
way for the employee to define and track personal objectives. After stating the organization's strategic goals for the
appropriate level for which the balanced scorecard is being prepared, the measures for each of the balanced
scorecard's categories should be defined, taking into account the areas over which the division or individual has
authority. Furthermore, the variables must be accessible and measured. Finally, the metrics must be usable, which
means that the data being collected must be useful, and there must be a foundation for comparison—either
company standards or individual goals. Using both quantitative and no quantitative performance indicators, as well
as long- and short-term measurements, may be extremely effective in terms of motivating employees while also
offering a clear picture of how they fit into the company's strategic strategy.
How are balanced scorecards and dashboards different?
The distinction between a balanced scorecard and a dashboard is often misunderstood. They have a tendency to
be misunderstood and are frequently used interchangeably. Each one has its own set of powers. The distinction between
strategic KPIs and typical and routine metrics, which can be referred to as just operational performance indicators, is also
a source of misunderstanding (PIs). KPIs are eventually broken down into PIs that employees can relate to and have
direct influence over. The operative term here is the adjective "key" of a KPI. When a company boasts that it has 300 or
more KPIs, one must wonder, "How can they all be important?"
To use a radio analogy, KPIs are the metrics of progress toward executing the strategy that separate the signal
from the noise. The context in which scorecards and dashboards are used is what distinguishes them. Scorecards and
dashboards are not mutually exclusive. They both show measurements, but they do so for different reasons. Scorecards
are meant to be strategic tools. Dashboards are supposed to be useful. KPIs and PIs should be reported on dashboards
and displayed in a balanced scorecard.
Dashboards have the drawback of not communicating why anything matters, why someone should care about the
given statistic, or what the consequences might be if an unfavorable trend persists. Dashboards, in a nutshell, show what
can be measured. A balanced scorecard, on the other hand, delivers the information that dashboards lack. Scorecards
begin with selecting which strategic initiatives to accomplish and essential processes to enhance and excel in, rather than
with existing data.

Here are some guidelines for understanding the differences between scorecards and dashboards:
Scorecards keep track of how far you've come in achieving your strategic goals. A scorecard shows periodic
snapshots of performance in relation to a company's strategic goals and strategies. KPIs should reflect the cumulative
build of potential to realised economic value as they move upward from employee-centric innovation, learning, and growth
perspectives. There are two important distinctions of scorecards: To begin, each KPI must have a predetermined
objective measurement. Second, KPIs should include both project-based KPIs like milestones, progress percentages, and
the degree of anticipated vs. completed outcomes, as well as process-based KPIs like customer satisfaction and percent
on-time delivery against promised dates. Improvement of processes is crucial, but innovation and change are even more
so. It's all about change in strategy, not merely doing things better.
Processes and outputs are monitored and measured using dashboards. A dashboard is more operational than a
scorecard and reports information more regularly. The dashboard's PI metrics indicate the organization's traction and
torque. PIs are used to track trends over time or compare outcomes to upper- and lower-threshold boundary limits.
Corrective actions help to achieve the KPI goal levels with actual results as PIs are monitored and responded to. Each
dashboard measure, on the other hand, is reported without regard for its relationship to other dashboard measures. The
backdrop of strategic objectives is not readily reflected in dashboard measures. Dashboard data can be more real-time in
nature, such as an automotive dashboard that allows drivers to quickly examine their current speed, fuel level, and engine
temperature. As a result, a dashboard should ideally be linked directly to systems that capture events as they happen,
and it should tell users via alerts or exception notifications when performance against any number of metrics deviates
from the norm or expectations.

Strategy is more than performing better: It involves doing different things

Executives appropriately adjust courses based on fresh insights and observations, making a strategy dynamic
rather than static. The purpose of a strategy map's strategic objectives is to re-direct the organization away from the
tyranny of maintaining the status quo — doing the same things a little better. Change is a constant in strategy. If a
company does not change on a regular basis, it will be vulnerable to competitors who will offer identical products,
services, and procedures. In a nutshell, strategic objectives outline the adjustments that a company should make in order
to stay competitive. Experience refines the method's effectiveness and impact, as it does with any managerial
improvement method. The plan-do-check-act (PDCA) cycle is an excellent organizational practice. It's difficult to get it
flawless the first time using improving methods. A learning curve will always exist. Many businesses plan too much and
don't follow through. When it comes to KPI and PI selection, study the ideas first, then put them into practice by picking,
monitoring, and refining the KPIs. Balanced scorecards and strategy maps are a craft, not a science.

9.5 CONTINGENCY PLANNING IN STRATEGY EVALUATION

Contingency planning is defined as a course of action designed to help an organization respond to an event that
may or may not happen. Contingency plans can also be referred to as ‘Plan B’ because it can work as an alternative
action if things don’t go as planned.
Contingency plans are an essential component of your succession management strategy since they make sure that
the company is prepared for anything. Many major corporations and government agencies develop several contingency
plans to ensure that a wide range of potential threats are thoroughly investigated and remedies are thoroughly practiced
before a crisis occurs.
Consider contingency planning to be a proactive strategy, whereas crisis management, the other component of the
business continuity puzzle, is a reactive strategy. A contingency plan ensures that you are ready for whatever may occur,
while a crisis management plan equips you to manage the reaction once the disaster or incident that may happened.

There are seven steps outlined for a contingency plan which are as follows:
1) Contingency planning policy is typically developed at the agency level, rather than the individual information
system level, often as a component of organizational policies for continuity of operations. System owners should
 consider the functional, technical, and security needs of their own systems in the context of agency contingency
planning policy, to determine whether any system-specific policy statements are required to extend or differ from
agency policy.
As the key system-specific artifact produced in the contingency planning process, the information
system contingency plan should reflect organizational policies for contingency planning and for related functions,
including information and physical security, system operations and maintenance, and emergency preparedness
and response. Agencies do not develop contingency planning policies or contingency plans in isolation, but instead
should recognize the interdependencies between contingency planning and subordinate processes like disaster
recovery planning, as well as with information system security planning and continuity of operations planning.

2) Conduct the BIA (Business Impact Analysis)  is a systematic process to determine and evaluate the potential
effects of an interruption to critical business operations as a result of a disaster, accident or emergency. A BIA is an
essential component of an organization's business continuance plan. It includes an exploratory component to
reveal any vulnerabilities and a planning component to develop strategies for minimizing risk. The result is a
business impact analysis report, which describes the potential risks specific to the organization studied.
One of the basic assumptions behind BIA is that every component of the organization is reliant upon the
continued functioning of every other component, but that some are more crucial than others and require a greater
allocation of funds in the wake of a disaster. For example, a business may be able to continue more or less
normally if the cafeteria has to close, but would come to a complete halt if the  information system crashes. It
is easy to confuse BIA and risk analysis, but they represent different steps in a business continuity plan.

Conducting a Business Impact Analysis

Use a BIA questionnaire to survey managers and others within the business. Survey those with detailed
knowledge of how the business manufactures its products or provides its services. Ask them to identify the
potential impacts if the business function or process that they are responsible for is interrupted.

Analyzing the results of a BIA

The BIA analysis phase's goals are to identify the most critical business functions and system, the staff and
technology resources required for operations to run smoothly, and the time frame within which the functions must
be recovered for the organization to return to a normal working state as quickly as possible.
Challenges include determining the revenue impact of a business function and quantifying the long-term
impact of losses in market share, business image or customers.

The role of BIA in disaster recovery planning

As part of a disaster recovery plan, a BIA is likely to identify costs linked to failures, such as loss of cash
flow, replacement of equipment, salaries paid to catch up with a backlog of work, loss of profits, staff and data, and
so on.

BIA vs. risk assessment

Business impact analysis and risk assessment are two important steps in a business continuity plan. A BIA
often takes place prior to a risk assessment. The BIA focuses on the effects or consequences of the interruption to
critical business functions and attempts to quantify the financial and non-financial costs associated with a disaster.
A risk assessment identifies potential hazards. These can include hurricanes, earthquakes, fires, supplier
failures, utility outages or cyber attacks and evaluate areas of vulnerability, should the hazard occur. Assets put at
risk include people, property, supply chain, information technology, business reputation and contract obligations. 
A BIA will evaluate the impact of a disaster on the organization. It will enable each department in your
company to describe and discuss how an unforeseen incident will impact their business. The usage of Recovery
Point Objectives (RPO) and Recovery Time Objectives will therefore assist your company in prioritizing specific
functions (RTO).

Consider the Impact

The BIA will identify the operational and financial impacts resulting from the disruption of business functions and
processes. Impacts to consider include:
 Lost sales and income
 Delayed sales or income
 Increased expenses (e.g., overtime labor, outsourcing, expediting costs, etc.)
 Regulatory fines
 Contractual penalties or loss of contractual bonuses
 Customer dissatisfaction or defection
 Delay of new business plans

3) Identify Preventive Controls

Preventative controls are designed to be implemented prior to a threat event and reduce and/or avoid the
likelihood and potential impact of a successful threat event.
Examples of preventative controls include the following;
 Policies
 Standards
  processes
 Separation of duties
 Physical control over assets (i.e. locks on doors or a safe for cash/checks)

Detective Controls are designed to find errors or problems after the transaction has occurred.  Detective controls
are essential because they provide evidence that preventive controls are operating as intended, as well as offer an
after-the-fact chance to detect irregularities.
Examples of detective controls include:
 Monthly reconciliations of departmental transactions
 Review organizational performance (such as a budget-to-actual comparison to look for any unexpected
differences)
 Physical inventories (such as a cash or inventory count)

Corrective Controls are typically those controls put in place after the detective internal controls discover a
problem. These controls could include disciplinary action, reports filed, software patches or modifications, and new
policies prohibiting practices such as employee tailgating.
Corrective controls are also to design the correct errors or irregularities that have been detected. Preventive
controls, on the other hand, are designed to keep errors and irregularities from occurring in the first place. Controls
may be automated, manual or hybrid.

4) Develop recovery strategies

You can develop and implement strategies that will help your business recover from an incident or crisis. Your
recovery strategies should demonstrate a clear understanding of your business's recovery objectives and reflect
what the business needs to continue operating. Prioritize critical business functions and record a recovery time for
each. This process will highlight the actions you should list in your recovery plan.

Designate a recovery team

 Nominate staff to be part of a recovery team, assign backups and ensure that all are aware of their roles and
functions in the recovery process. Your recovery team could be similar to your incident response team.
 Ensure that more than 1 person knows how to do a certain task and you don't risk losing essential skills or
knowledge if something happens to one of your staff members.
 Make sure your team can use manual processes in case your equipment or machinery is damaged.
 If you deal with hazardous materials, special equipment, or in risky environments, you may need to provide
training for your staff so they can do their jobs safely and respond after an incident. This will help you reduce
the impact a crisis may have on your business and help you recover quicker.
Recovery Strategies
If a facility is damaged, production machinery breaks down, a supplier fails to deliver or information technology is
disrupted, business is impacted and the financial losses can begin to grow. Recovery strategies are alternative methods
for restoring business operations to a minimum acceptable level after a business disruption, and they are prioritized
according to the recovery time objectives (RTO) determined during the business impact study.
Recovery strategies require resources including people, facilities, equipment, materials and information technology.
An analysis of the resources required to execute recovery strategies should be conducted to identify gaps. For example, if
a machine fails but other machines are readily available to make up lost production, then there is no resource gap.
However, if all machines are lost due to a flood, and insufficient undamaged inventory is available to meet customer
demand until production is restored, production might be made up by machines at another facility—whether owned or
contracted.

Disaster Recovery Plan

A disaster recovery plan is a set of tools and procedures that an organization uses to recover from a major
disruption to its IT assets. Disaster recovery planning can use a variety of tools depending on the organization’s existing
assets and recovery goals.
In disaster recovery planning, the “disaster” can be any event that interrupts access to data, apps, or systems. This
can include power outages, data storage corruption, DDoS attacks, natural disasters that sever server connections—
anything and everything that disrupts IT workflows. The goal is to overcome the data disaster and restore normal
operations.
As organizations rely more on technology and electronic data for their daily operations, the amount of data and
information technology infrastructure lost to disasters appears to be increasing. Organizations are estimated to lose
revenue and incur expenses every year due to disasters, unpreparedness, and lost productivity. Measures must be taken
to protect your organization from disasters.
 One way your organization can prepare and protect itself from disasters is to create and implement a disaster recovery
plan (DRP). Organizations should create a disaster recovery plan that can address any type of disaster. The plan should
be easy to follow and understand, and be customized to meet the unique needs of the organization. Typical elements in a
disaster recovery plan include the following:
1) Create a disaster recovery team.
2) Identify and assess disaster risks
3) Determine critical applications, documents, and resources.
4) Specify backup and off-site storage procedures.
5) Test and maintain the DRP.

Disaster Recovery plans often incorporate (but may not be limited to) the following:
 Recovery Point Objectives (RPO). This is a measure of how much data may be lost during recovery efforts. This
is controlled by adjusting the frequency of data backups.
 Recovery Time Objectives (RTO). This is an estimate of how long it will take for normal operations to resume
following a disastrous event. Faster RTOs generally require more resources than slower ones.
 Remote Data Backups. Creating a secondary offsite backup of your most important data is a core part of any
disaster recovery solution.
 Accountability Chart. Who is responsible for enacting a disaster recovery plan? Having assigned roles and
responsibilities in an accountability chart makes it easier to follow and enforce a plan quickly and consistently.
 DR Plan Testing. DR plans often require frequent testing to ensure that RTOs and RPOs can be met in case of an
actual emergency.
5) Develop an information system contingency plan
IT contingency planning refers to the plans, policies, procedures and technical measures that enable the
recovery of IT operations after an unexpected incident. A disruptive event could include a major natural disaster
such as a flood, or something smaller, such as malfunctioning software caused by a computer virus.
An IT contingency plan is the organization’s recovery strategy. It can include, among other items deemed
necessary by the organization, the following:
• Roles and responsibilities of key personnel;
• Communication protocols with outside parties (e.g., law enforcement, IT vendors);
• Prioritized mission-critical processes and services;
• Technical details concerning how systems and data will be restored;
• Details concerning how the plan will be periodically tested.
ISCP development is a vital phase in the process of creating a comprehensive contingency planning
program, as stated in the IT Contingency Plan and Planning Guide. An ISCP establishes methods for assessing
and recovering a system once it has been disrupted.

6) Plan testing, training, and exercises

Testing your plan will ensure that recovery will be successful while training prepares personnel so that they know
how to act in case of emergency and with regards to putting the plan into effect.
A Test Plan refers to a detailed document that catalogs the test strategy, objectives, schedule, estimations,
deadlines, and the resources required for completing that particular project. Think of it as a blueprint for running the
tests needed to ensure the software is working properly – controlled by test managers.
The purpose of the test plan is to define a comprehensive approach to testing. This includes a detailed plan for
verifying the stated objectives, identifying any issues, and communicating schedules towards the stated objectives.
The test plan has the following components:
 Project scope. Outlines the goals and what is included in the testing project.
 Test cases. Detail level test scenarios. Each test plan is made up of a list of test cases, their relevant test
phases (schedule), and relationship to requirements (traceability matrix).
 Business process script inventory and risk assessment. A list of components (business process scripts) that
require testing. Also describes related components and identifies high-risk components or scenarios that may
require additional test coverage.
 Test schedule. A schedule that describes when test cases will be executed.
 Test environment. Outlines the recommendations for the various test environments (for example, Functional,
System Integration, and Performance). This includes both software and hardware.
 Test data. Identifies the data required to support testing.

The best strategic management training will allow you to work directly on your own issues - for example,
by assisting you in analyzing your own business challenges and providing support to develop your business
strategy. It will also provide leadership skills training in strategy execution. Ideally, you will  leave with an action
plan to implement on your return to the office - and receive post-training support  to help you successfully
follow through with this plan.

7) Plan maintenance
Plan maintenance is the process the planning team establishes to track the plan’s implementation progress
and to inform the plan update. The plan must include a description of the method and schedule for monitoring,
evaluating, and updating it within a 5-year cycle. These procedures help to:
 Ensure that the mitigation strategy is implemented according to the plan.
  Provide the foundation for an ongoing mitigation program in your community.
 Standardize long-term monitoring of hazard-related activities.
 Integrate mitigation principles into community officials’ daily job responsibilities and department roles.
 Maintain momentum through continued engagement and accountability in the plan’s progress.

Plan updates provide the opportunity to consider how well the procedures established in the previously
approved plan worked and revise them as needed.

5 Major Benefits of Planned Maintenance

Planned maintenance offers various benefits to companies on top of reducing unplanned downtime. These benefits
include:

1. Reduced Maintenance Costs

Planned maintenance creates an incredible opportunity to reduce maintenance costs. By outlining a preventive
maintenance plan, small problems and easy repairs can be caught before they turn into big failures and costly
repairs.
2. Extended Asset Life
Frequently servicing assets increases their life cycle. Maintaining equipment and keeping it operating in good
condition will extend its operational time, so it won’t need to be replaced as often.
3. Increased Workplace Safety
Preventing equipment failure is in everyone’s best interests. Not only do you reap the cost savings discussed
above, but also operators and other workers in close proximity to your equipment are safer with minimized risk of
disaster.
4. Improved Workplace Culture
Planned maintenance reduces not only equipment downtime but also employee downtime. Planning out preventive
maintenance tasks, and relieving the stress of unexpected equipment failures will keep employees active,
collaborating, and overall happier.
5. Planned Maintenance Decreases Downtime
Left unattended, any asset will eventually fail. Faults, failures, and breakdowns interrupt entire production
processes, and that could result in hours, if not days, of unplanned downtime. That downtime is expensive,
especially considering how labor and operations costs continue to mount, while productivity is at a standstill.

Planned maintenance allows minor issues to be resolved before they develop into major breakdowns. The
process of gathering data and prioritizing maintenance tasks makes sure the most pressing issues are handled
first, thereby preventing key assets from deteriorating further. The planning process also ensures all requisite
materials and tools are available. As a result, planned downtime is kept to a minimum, as work is carried out on
time.

Steps to creating an effective maintenance plan:

1. Detail the work that you'll need to do on each asset. While at it, write a procedure that workers will
understand.
2. Schedule the work – Use a dating frequency, running hours, or measures that will provide insight into the
condition of an asset. The schedule allows you to do predictive maintenance.

3. Add workers or contractors – including the estimated working hours.

4. Add spare parts. You can add stock quantities now, or later as you do the work and get insight into how
many pieces you need for the job.

5. Work permit: Highlight if the contractors and workers will need a specific work permit.

Planned Maintenance vs. Unplanned

Obviously, the opposite of planned maintenance is unplanned maintenance, and it’s generally preferred to
have a higher percentage of planned tasks. Unplanned tasks take two different forms, including emergency and so-
called “free-effort.”

"Free-Effort" Maintenance
Any non-emergency maintenance tasks that are performed without being planned out first are referred to as
“free-effort” maintenance (also known as minor maintenance). Free-effort tasks are typically simple, and they may
not require a lot of planning.

The maintenance department's responsibilities might include:

 Training supervisors so they have the necessary skills and knowledge.
 Maintain a sufficient staffing level, without over-staffing, such that all planned maintenance can be accomplished.  
Train maintenance workers so they are competent to perform the required tasks.
 Ensure all work is done to the required specifications (including using appropriate fluids and replacement parts).
  Inform the purchasing department about planned maintenance needs with sufficient lead time to allow parts and
supplies to be ordered on a normal basis.
 Track maintenance tasks, maintain records of the work that was done, and ensure work is done properly.
 Report on equipment problems noticed during planned maintenance so they can be addressed during turn-arounds
or scheduled plant outages.

The above list is only intended to provide some ideas. The staff in each facility is organized differently, and there
are different priorities. For example, part of the maintenance department's responsibility might be to minimize staffing
through scheduling and judicious use of overtime.

10 Ways to Improve Planned Maintenance in Your Facility

1. Improve Incident Reporting
2. Get Away From the Desk
3. Shift From Firefighting to Prevention
4. Involve Senior Leadership
5. Optimize Existing PMs
6. Control “Free-Effort” Work
7. Consider Workers and Backlog
8. Optimize MRO Inventory
9. Schedule Recurring PMs Through a CMMS
10. Track Maintenance Data

Emergency maintenance often occurs when critical pieces of equipment break down. In most cases, maintenance
teams will want to minimize the amount of emergency maintenance needed in their facility.
To keep emergency maintenance to a minimum, maintenance teams can:
 Implement an effective preventive maintenance plan.
 Improve upon existing PMs.
 Use predictive analytics to focus on key maintenance tasks.

Tip: While preventive maintenance is generally preferred, sometimes breakdown maintenance is best for certain non-
critical assets, so unplanned tasks aren’t always a bad thing.

“Importance of contingency planning in strategy evaluation”

Contingency plans should be considered when analyzing your business strategy since they provide your
organization the flexibility to shift focus to different elements of the business and modify operational methods as market
needs change. Mobility is an important part of contingency planning and your overall business strategy.
To have a good contingency plan is you must have a detailed contingency plan. It must have to list down the major
incidents that could harm your business operations, prioritize them based on their impact and probability, create an action
plan explaining what you should do in case they occur, and review and update them frequently.
Contingency also means something that could happen or come up depending on other occurrences. An example of
a contingency is the unexpected need for a bandage on a hike. The definition of a contingency is something that depends
on something else in order to happen.
All businesses are vulnerable to some amount of risk. Contingency planning can be effective in mitigating these
risks. Contingency planning is defined as a course of action designed to help an organization respond to an event that
may or may not happen. Contingency plans can also be referred to as ‘Plan B’ because it can work as an alternative
action if things don’t go as planned. The purpose of any contingency plan is to allow an organization to return to its daily
operations as quickly as possible after an unforeseen event. The contingency plan protects resources, minimizes customer
inconvenience and identifies key staff, assigning specific responsibilities in the context of the recovery.”
Contingency plans are not only necessary to respond to natural disasters, but cyber attacks as well. “Cyber attacks
using malicious software such as ransom-ware may render an organization’s data unreadable or unusable.”  Restoring entity’s
data from backups may be the only option to recover the data and maintain normal business operations. Therefore, having a
contingency plan in place is crucial for entities, especially covered entities who store protected health information.

There are seven steps outlined for a contingency plan which are as follows:
1. Develop a Contingency Planning Policy Statement: This will provide the authority and guidance necessary to
develop the plan.
2. Conduct the BIA (Business Impact Analysis): The BIA will help to identify and prioritize information systems and
components that are critical in supporting the organization’s mission/business functions.
3. Identify Preventive Controls: Preventive controls are measures taken to reduce the effects of system disruptions.
They will increase system availability and reduce contingency life-cycle costs.
4. Create Contingency Strategies: These are thorough recovery strategies that ensure the system will be recovered
quickly in case of a disruption.
5. Create an Information System Contingency Plan: This should contain detailed guidance and procedures for
restoring a system after emergencies occur. These procedures will be unique to the system’s security impact level
and recovery requirements. Each third-party vendor must be prepared for working within the bank’s contingency
plan during and after emergencies.
 6. Provide Plan Testing, Training and Exercises: Testing your plan will ensure that recovery will be successful while
training prepares personnel so that they know how to act in case of emergency and with regards to putting the plan
into effect.
7. Ensure Plan Maintenance: The plan should be updated regularly to remain current with any changes made within
the organization.

When you run a business, risk comes with the territory and can occur in the form of accidents, natural disasters,
financial risks, IT attacks and more. Be sure you are prepared by providing comprehensive contingency planning in your
workplace.
Contingency planning and risk management are essential components of any business strategy. A small business
owner working on limited funds must pay careful attention to contingency planning and risk management when
evaluating the strengths and weaknesses of a proposed business strategy. Smart planning can provide the edge the
small business owner needs to establish a niche in the market and sustain growth.

Anticipating Business Risks

A business plan that only considers the best-case scenario for your small business isn't likely to last long.
Anticipating risks to your company, including seasonal drops in revenue and new competitor products entering the
market, is crucial to ensure your overall business strategy has the wide vision necessary to keep your business from
being caught off-guard by foreseeable events. The more risks your business can anticipate, the better your company is
at meeting the many challenges that can arise for a small business in any industry.

Developing Mitigation Strategies

Contingency planning and risk management are only as good as the strategies developed to help mitigate the
potential financial damage to your company. Mitigation strategies may include a variety of methods for limiting the
affects of future problems to your business, including storing capital for revenue shortfalls as well as making
improvements to facilities to reduce the chances of employee injury. These strategies provide your small business with
a plan of action in the event of a problem. This allows your company to devote more time to solving a problem in the
moment without having to first sit down and develop a plan of action.

Mobility of Business Strategies

In evaluating your business strategy, contingency plans should give your company the mobility necessary to shift
focus to different aspects of your company and change operating strategies as needs in the market shift. Mobility is an
essential element of contingency planning and your business strategy as a whole. If you notice your company's strategy
isn't working, you must have the systems in place to switch gears and find the profitable solution. Without mobility, your
small business could remain locked in the same money-draining strategy until you're broke and out of business.

Seizing Business Opportunities

Planning for business opportunities is just as important in developing risk management strategies for your
business. Incorporating opportunity planning into your contingency plans can allow your company to get ahead of the
competition in a variety of areas, including developing new products to meet a need in the market or increasing
promotional campaigns in advance of a tourist season. Taking advantage of these opportunities helps your company
maximize its profit potential and secure new customers or clients.
Additionally, if you're a small business owner, contingency or continuity planning is an essential element of your
operational strategy. Planning of this type can help you identify weak points in your infrastructure that could slow down
or stop productivity in adverse conditions, including damage to your business location or insufficient personnel.
Contingency planning can provide you with the infrastructure to keep your company running through a variety of
problems, including equipment failure, a weather-related disaster or shortage in key resources. Keeping your business
open and operating allows your company to continue bringing in revenue to help mitigate the damage a problem is
causing while your team works to solve the issue. Without a contingency plan, operations could shut down in a crisis,
resulting in further loss of revenue and greater damage to your small business in the long term.
Building your responses to adversity doesn't just include large-scale events but also daily difficulties that can
slow productivity. Contingency planning encourages you to build in scheduling redundancy to ensure worker absentees
in key positions doesn't stop or slow the production of your business. Shoring up this weak point in your company can
allow your workers to continue to meet customer needs without having to work in multiple roles. Employees devoting
more attention to customer service can make the purchasing experience more satisfying for your clients, increasing the
likelihood of repeat business.
Developing contingency plans shows potential investors that you take the success of your company seriously,
notes the continuity planning company Disaster Recovery. Investors are more likely to give money to a company that
shows an ability to maintain a high level of productivity regardless of difficult circumstances. Extensions of capital can
increase the growth potential of your business and make it easier to meet financial obligations, including paying vendors
and devoting more attention to product development.
Telling your customers that have a contingency plan to continue providing goods or services even in adverse
conditions can increase customer confidence in your business and make them more likely to choose your company
over the competition. Customers may show loyalty to your company because you have taken the steps to ensure you
can continue to meet your obligations to the marketplace. As long as small business continues to place a high priority
on meeting customer needs, your company can maintain consumer confidence and loyalty.
 In evaluating your business strategy, contingency plans should give your company the mobility necessary to shift
focus to different aspects of your company and change operating strategies as needs in the market shift. Mobility is an
essential element of contingency planning and your business strategy as a whole. There may be multiple ways to address
each plan, and multiple ways to implement each, each component should be developed fully for maximum effectiveness.
Creating a fully-fleshed out contingency plan is difficult and time consuming, and, once created, must be polished to
maintain a state of readiness for any situation at any time. A well-made contingency plan can save an organization from
going out-of-business should an incident or disaster occurs.
A contingency plan is a plan devised for an outcome other than in the usual (expected) plan. Contingency plans are
often devised by governments or businesses. For example, suppose many employees of a company are traveling
together on an aircraft which crashes, killing all aboard.
A good contingency plan is how you make a detailed contingency plan. List down the major incidents that could
harm your business operations, prioritize them based on their impact and probability, creating an action plan explaining
what you should do in case they occur, and review and update them frequently. The key elements of a contingency plan
are “protection, detection, and recoverability.” Some examples of contingency mean something that could happen or
come up depending on other occurrences. An example of a contingency is the unexpected need for a bandage on a hike.
The definition of a contingency is something that depends on something else in order to happen.

Benefits of Forming a Contingency Plan

While you might think you’ll never gain advantages from a contingency plan except in unlikely disasters, the reality is
that having one can help right away in several ways in addition to the usefulness when something goes wrong. When you
prepare a contingency plan for your business, it will:

 Increase awareness: Almost every business owner has considered how the company would face and handle a
crisis, but usually, the plans aren’t comprehensive. When people in charge take time to create a full contingency
plan, they’re forced to evaluate every possible scenario and ramification. You’ll have to consider every strength and
weakness of your facility and operation, which will give you a more methodical strategy for prevention, resolution,
and bounce-back.
 Improve peace of mind: Understanding the ins and outs of your business and performing a full analysis of
possible threats and solutions will keep you and all employees feeling more confident about the company’s
trajectory. When you understand the big picture and know it, you can focus on what you do best and move the
business forward instead of fretting over what ifs.

 Prevent panic: No matter how many times you’ve thought about something going wrong and how prepared you
might feel, it doesn’t change the fact that people tend to panic in emergency situations. The fear response is a
strong one, and trying to make crucial decisions while you’re panicking about losses could lead to incorrect,
irrational choices. When everyone has a clear, well-documented plan of action to follow, everyone can rapidly
move into recovery mode.

 Minimize company losses: When disruption occurs, whether in the form of a power outage, storm or other
situation, production losses can be devastating. Employees could feel too unsafe to work, data could get lost and
equipment could stop working. The best contingency plans will include a way to reroute data, emergency
generators, and determination for who will supervise what duties, escape routes for employees in danger, and
plans to obtain equipment should yours fail.

The Great Game of Business, we define contingency planning in business as the proactive process of planning for
both the short-term and long-term security of a company. Contingency planning is sometimes known as the “Plan B,” and
is most often used in risk management, business continuity, and strategy.
What would you do if your company suddenly lost 10% of its revenue? That scenario may seem unlikely, but
unexpected events and outcomes are almost a guarantee in business. So, the question becomes, “How can we use our
insights and historical data to better foresee these surprises?”
Too many businesses get into trouble because they don’t have well-designed contingency plans, or perhaps don’t
have any plans at all. Those that do have a business planning process in place often focus only on things like sales
projections and ignore potential negative events that they’d rather not think about. Contingency planning is a powerful tool
because it helps uncover weaknesses so that they can be proactively addressed, which ensures that a company can rally
quickly when things go off course.
We define contingencies as products or services that have been researched, developed, and cost-justified, and are
ready to be activated on very short notice. Based on this definition, consider what you would do if one of your biggest
customers suddenly went out of business?
A contingency plan to deal with this possibility might include anticipating this risk, exploring opportunities for
revenue replacement, or identifying company-wide changes that can soften the impact of a significant revenue loss. Our
business coaches partner with business owners and leaders to develop contingency plans with the help of our growth and
contingency evaluation template and High-Involvement Planning playbook.

The four types of planning for a sustainable business are:

Financial planning
Strategic planning
Contingency planning
Succession planning
 These activities work together to support the broad goals and future direction of the organization. The business
planning process is an integral part our open-book management structure. However, we do things a bit differently than
everyone else. Our High-Involvement Planning process taps into the collective knowledge and experience of an
organization by involving employees at all levels. While this may seem unnecessary or impractical, our process has been
proven time and again to engage employees and produce positive results.
Contingency planning is just one component of the sales planning process, and it actually complements strategic
and financial planning. Without a backup plan in place, all the hard work put into future plans can get derailed.
The process of developing contingency measures takes you out of reactive mode and puts your organization into a
proactive stance. In fact, contingency planning can actually can be a source of innovation that makes you stand out from
your competition.

Elements of a Good Contingency Plan

Realizing the importance of having a contingency plan is the easy part. Knowing how to put one together is a whole
different story. The following five actions are essential for creating a great business contingency plan.
1. Perform thorough market research
2. Understand consumer wants and needs
3. Design and test your process
4. Create a go-to-market strategy, including the selection of distribution channels
5. Understand costs and set pricing

A contingency plan is typically activated when revenue drops unexpectedly. However, a plan may also be used for
more positive growth situations. These might include incorporating a contingency plan into next year’s sales growth plan
or activating the plan in response to a sudden increase in customer demand or new market opportunities.
Once a contingency plan is activated, you must define another one to take its place. Remember, a contingency
plan is a living document, and is meant to be revised or updated on at least a quarterly basis.
By making contingency planning a regular part of your planning procedure, you ensure that you are always
prepared to respond to crises and mitigate the damage from everything from small problems to worst-case scenarios.
Once supported by your overall business planning process, a rock-solid contingency plan helps ensure growth and
sustainability.
Contingency planning and risk management are essential components of any business strategy. A small business
owner working on limited funds must pay careful attention to contingency planning and risk management when evaluating
the strengths and weaknesses of a proposed business strategy. Smart planning can provide the edge the small business
owner needs to establish a niche in the market and sustain growth.

Benefits of a Good Business Contingency Plan

1. Makes the overall planning process easier
2. Provides better control over profit
3. Helps you more accurately plan purchases
4. Gives your company an edge over the competition
5. Allows for an accurate assessment of personnel needs
6. Improves internal confidence in the company
7. Has the potential to save people’s jobs and the entire organization
8. Strengthens company culture
9. Protects the supply chain
10. Improves long-term business insights

Anticipating Business Risks

A business plan that only considers the best-case scenario for your small business isn't likely to last long.
Anticipating risks to your company, including seasonal drops in revenue and new competitor products entering the market,
is crucial to ensure your overall business strategy has the wide vision necessary to keep your business from being caught
off-guard by foreseeable events. The more risks your business can anticipate, the better your company is at meeting the
many challenges that can arise for a small business in any industry.

Developing Mitigation Strategies

Contingency planning and risk management are only as good as the strategies developed to help mitigate the
potential financial damage to your company. Mitigation strategies may include a variety of methods for limiting the affects
of future problems to your business, including storing capital for revenue shortfalls as well as making improvements to
facilities to reduce the chances of employee injury. These strategies provide your small business with a plan of action in
the event of a problem. This allows your company to devote more time to solving a problem in the moment without having
to first sit down and develop a plan of action.

Mobility of Business Strategies

In evaluating your business strategy, contingency plans should give your company the mobility necessary to shift
focus to different aspects of your company and change operating strategies as needs in the market shift. Mobility is an
essential element of contingency planning and your business strategy as a whole. If you notice your company's strategy
isn't working, you must have the systems in place to switch gears and find the profitable solution. Without mobility, your
small business could remain locked in the same money-draining strategy until you're broke and out of business.

Seizing Business Opportunities

Planning for business opportunities is just as important as developing risk management strategies for your
business. Incorporating opportunity planning into your contingency plans can allow your company to get ahead of the
competition in a variety of areas, including developing new products to meet a need in the market or increasing
promotional campaigns in advance of a tourist season. Taking advantage of these opportunities helps your company
maximize its profit potential and secure new customers or clients.

The National Institute of Standards and Technology designed the seven progressive steps to be integrated into
each stage of the system development life cycle. They include:

1. Develop the contingency planning policy statement. A formal policy provides the authority and guidance
necessary to develop an effective contingency plan.

2. Conduct the business impact analysis (BIA). The BIA helps identify and prioritize information systems and
components critical to supporting the organization's mission/business functions. A template for developing the
BIA is provided to assist the user.

3. Identify preventive controls. Measures taken to reduce the effects of system disruptions can increase system
availability and reduce contingency life cycle costs.

4. Create contingency strategies. Thorough recovery strategies ensure that the system may be recovered quickly
and effectively following a disruption.

5. Develop an information system contingency plan. The contingency plan should contain detailed guidance and
procedures for restoring a damaged system unique to the system's security impact level and recovery
requirements.

6. Ensure plan testing, training, and exercises. Testing validates recovery capabilities, whereas training prepares
recovery personnel for plan activation and exercising the plan identifies planning gaps; combined, the activities
improve plan effectiveness and overall organization preparedness.

7. Ensure plan maintenance. The plan should be a living document that is updated regularly to remain current with
system enhancements and organizational changes.

In conclusion, a business must form a recovery team in order to construct a disaster recovery strategy that includes
identifying and assessing disaster risks, designating critical applications, and outlining backup methods. Depending on the
organization, more procedures may be incorporated in the plan. After that, the recovery team and organization must put
the DRP into action and follow the plan's protocols.

9.6 STRATEGY MONITORING AND REVIEW PROCESS

Monitoring and evaluation is an essential component of any adaptation planning and should not be neglected.
Trigger indicators and performance indicators can be monitored and the results used to determine when actions
should be implemented and to track the success of the adaptation plan. Effective monitoring and evaluation underpin
the planning cycle.
Monitoring and evaluation (M&E) is critical to ensure the long-term success of climate adaptation initiatives,
plans and actions. It can help to demonstrate accountability to stakeholders and communities.
Monitoring, evaluation and review design is critical to ensure that information is used to inform decision-making,
make appropriate adjustments, and report to stakeholders and decision makers. Without a clear link between
monitoring and decision-making, there is a risk that monitoring activities and resources will be seen as a drain on
resources and discontinued.
Trigger points can be identified and monitored and, when reached, can stimulate the implementation of the next
action in a sequence. In identifying trigger levels for response, it is important to consider the time required for the
decision to be made and implemented. This should include acknowledging the time that may required for effective
stakeholder engagement, or for any detailed investigation, design and development of actions that may be required.
Evaluation helps you to learn from what you have planned and what has been done. It helps with considering
what changes need to be made to your planning approach, your plan and associated activities to get adaptation
outcomes.
Your monitoring program should include a variety of measurements which enable you to report to your
organization and stakeholders about your activities.
 Monitoring should include outputs, immediate and short-term outcomes, and longer term outcomes.
Stakeholder feedback is essential. People or groups who have an interest in the plan, or who are responsible for
delivering various actions, must be made aware of any changes that affect them. Importantly, consideration must be
given to how the plan is being amended so that the planning cycle can be continued.
Monitoring, evaluation and review is not the end of the adaptation planning cycle, it is a new beginning!!

Strategy Monitoring and Review Process

In recent years there’s been significant effort toward creating a “balanced scorecard” of metrics to serve as a
guide to performance improvement with real value creation versus improvements via trade-offs. Moreover, efforts to
include non-financial and leading indicator metrics to help redirect worker behavior are being used to balance purely
financial goals with strategic imperatives. Yes, in the end we want an upward trend in financial indicators, but if this is
all we’re managing, the strategy will be short term and reactive.
Below are principles that we’ve discovered in setting up an effective value-adding strategy monitoring and
control process.
The starting point is strategic goals, and then the initiatives to achieve them (see “Accepting the Fundamental
Challenge of Strategy Implementation”). The selection of metrics then follows from the questions: How will we know if
this is working? What leading and lagging indicators will guide us?
But what does one do with these measures? The most beautiful and balanced scorecard in the world won’t
compensate one iota for a poor review process namely, an executive who reviews the metrics and uses them to drive
behavior change. The change occurs less because the metric is being reported and more because that’s what
management is paying attention to. Yes, what gets measured gets managed if that’s what the boss is watching.
The actual review process can be informal or a rigid periodic review. It is the style and openness of the review
that makes all the difference in whether the organization will quickly seek effective course adjustments, seek excuses
or praise with little real direction change, or ignore much of the scorecard because in the end, the old lagging metrics
are still implicitly the most important thing. When a review meeting is well run it is much more than a control tool. It is a
problem-solving session where the business examines what it has learned since the last review, with data (the
metrics), that serves as a basis for ongoing adjustments for even better performance. These adjustments are in the
form of how resources should be reallocated, especially the most important and scarcest resource of all: how people in
the organization will use their precious time.
The good thing about lagging metrics is they are usually objective and available via the company’s systems.
Leading measures often are not easily available and have only an assumed correlation with performance. These are
limitations, and the organization must determine that the value they’ll receive from these metrics far exceeds the cost
and time of assembling them. In our extensive strategic planning experience, after the most important goals have been
defined, and the balanced slate of metrics has been whittled down to the essential ones, invariably, within the next six
months, we will need to cut back the number further and find easier-to-assemble surrogates because of this point. The
easiest way around the leading indicator challenge is through the use of milestones. To be actionable, a strategy
needs to be stated as a set of programs and initiatives. Once that’s done, one of the most important leading indicators
is achievement of critical milestones for each initiative. The planning process needs to outline these milestones, which
is where the rubber meets the road regarding linking how people spend their time with the strategy. In our experience,
milestones should be the top leading indicator. Milestones should be substantial achievements that are assignable and
are needed within the next six months.
After the metrics are set, including a healthy set of milestones as leading indicators, targets must be set. People
respond well and are often motivated when there’s something to aim for. A key choice is whether to set incremental
steps or stretch goals. The latter is often useful when it’s critically important that the organization break out of old
habits if they are to achieve a strategic goal.
Finally, senior management needs to be committed to both the strategic planning process that will generate the
goals and the control/review process that follows, or all of this will have been a waste of time. In our experience, after
the plans are done and the ideal metrics defined, it takes a full year for the organization to assemble, routinely report
on and begin adjusting course based on the metrics. That’s if management diligently follows through with “inspection.”
If they don’t, if they continue to follow their old guides, which are usually the monthly accounting figures forget value
creation through measuring the right things.
In summary, strategy monitoring and control is a lot more than reporting metrics. The starting point for
developing your approach is the question “What metrics, targets, review process and review style will most change
behaviors toward the work that will create the most value?” The emphasis must be on the review process, with the
goal being course adjustments, not measurements. But with this philosophy, there is greater likelihood that the right
metrics will be chosen and their use will indeed be value creating.

Strategic Plan Step 6: Monitor and Review

The final step in any planning process is to monitor and evaluate progress. The same way as you check the
signposts along a road when completing a journey, it is similarly important to check that development is on track.
The management committee should use reports against its annual operational plans to review progress towards
meeting the strategic aims and objectives. Therefore, they must ensure that whoever is doing the work is keeping
appropriate records so that progress can be assessed. This will involve, at the implementation stage of your plan,
being clear what systems and structures are required. The things you decide to measure will give an indication of how
well you’re doing, hence, the name indicators or performance measures.
Before completing your plan, you need to agree how and when it will be monitored and reviewed and what
information the Management Committee needs to receive in order to review progress.
 When reviewing progress towards achieving the strategic aims and objectives, the Management Committee
should:
 ensure that activities are kept within the parameters of the agreed strategic aims and objectives;
 ensure that activities are consistent with organization’s vision, mission and values;
 if the organization is a charity, use the information collected to show the public benefit the charity is having; and
 keep under review internal and external changes which may require adjustments to the organization’s strategy
or affect their ability to achieve their objectives.

Strategy Monitoring is the oversight of strategy implementation. This is done to detect and clear issues, adapt
strategies that are failing and to identify tactical opportunities. The following are the basic types of strategy monitoring.
1. Action Plan. An action is a plan that contains enough detail to achieve an objective or goal. This typically includes
an outline of goals, objectives, measurements, action steps and responsibilities for each step. In some cases,
dates and budget are also included . In this way, an action plan resembles a small scale project. In addition,
Weekly or bi-weekly meetings that the review action plans that detail is strategy implementation progress and
issues. For example, a marketing team that monitors a project launch strategy with an action plan that identifies the
individuals responsible for each objective of the strategy.

2. Performance Management. Performance management is the process of setting goals for teams and individuals and
monitoring performance against these goals. This is a basic tool of strategy implementation and monitoring. It is
also the process of planning, monitoring, reviewing and evaluating the performance of organizations, teams,
vendors, partners, employees and other individual contributors such as volunteers or contractors. This is often a
process of agreeing to objectives for a period and reviewing the completion of those objectives at the end of the
period. The following are common performance management terms. https://simplicable.com/new/performance-
management

3. Program Governance. The top level process of directing and controlling program and project execution. For
example, weekly project governance meetings where project managers present status reports.

4. Reporting. Communication of strategy implementation and benefits realization with reports, dashboards, analytics
and status meetings.

5. Risk Monitoring. Risk monitoring is oversight of risk management efforts, monitoring of risk levels and the detection
of risks that actually occur to become issues. Moreover, Risk monitoring is the ongoing process of managing risk.
Risk management often has an initial phase that involves identifying risk, agreeing to treatments and designing
controls. Risk monitoring is the process of tracking risk management execution and continuing to identify and
manage new risks. The following are common elements of risk monitoring.
 Risk Identification - The continuing process of identifying new risks.
 Risk Analysis - Ongoing analysis of risk probability, impact, treatment options and other factors such as
moment of risk.
 Risk Controls - Monitoring the implementation of risk controls such as risk mitigation processes. 
 Measurement & Communication - Measuring current risk exposure and communicating risk information to
stakeholders. This may include regular reviews.

6. Change Management. Change management is the leadership of change including the sponsoring of projects,
communication of strategy and clearing of issues. This requires total engagement with strategy implementation and
the authority to sideline resistance to change by transferring responsibility to agents of change.  Furthermore,
Change Management is the practice of planning and leading organizational change. It is often an executive
leadership function that's mostly focused on communication, motivation, clearing issues and driving a change
forward through obstacles such as resistance to change. The following are common change management
techniques and considerations. https://simplicable.com/new/change-management.

7. Management by Walking Around. Management by walking around is the principle that senior managers be fully
engaged with low level operational realities as opposed to watching strategy implementation from a simplistic
dashboard or high level action plan. Aside from that, Management by walking around, also known as management
by wandering around. It is a management technique or style that involves randomly engaging with employees
rather than restricting interactions to schedule meetings. It is most applicable to senior managers who may be
perceived as unapproachable and out of touch with the day-to-day realities of their business. By regularly engaging
employees in an unstructured way, managers may improve employee morale, openness and productivity. They
may also be able to unearth critical problems and worthy ideas.

Below are principles that we’ve discovered in setting up an effective value-adding strategy monitoring and control process.
1. The starting point is strategic goals, and then the initiatives to achieve them (see “Accepting the Fundamental
Challenge of Strategy Implementation”).
 2. But what does one do with these measures? The most beautiful and balanced scorecard in the world won’t
compensate one iota for a poor review process — namely, an executive who reviews the metrics and uses them to
drive behavior change. The change occurs less because the metric is being reported and more because that’s
what management is paying attention to. Yes, what gets measured gets managed … if that’s what the boss is
watching.

3. The actual review process can be informal or a rigid periodic review. It is the style and openness of the review that
makes all the difference in whether the organization will quickly seek effective course adjustments, seek excuses or
praise with little real direction change, or ignore much of the scorecard because in the end, the old lagging metrics
are still implicitly the most important thing. When a review meeting is well run it is much more than a control tool. It
is a problem-solving session where the business examines what it has learned since the last review, with data (the
metrics), that serves as a basis for ongoing adjustments for even better performance. These adjustments are in the
form of how resources should be reallocated, especially the most important and scarcest resource of all: how
people in the organization will use their precious time.

4. The good thing about lagging metrics is they are usually objective and available via the company’s systems.
Leading measures often are not easily available and have only an assumed correlation with performance. These
are limitations, and the organization must determine that the value they’ll receive from these metrics far exceeds
the cost and time of assembling them. In our extensive strategic planning experience, after the most important
goals have been defined, and the balanced slate of metrics has been whittled down to the essential ones,
invariably, within the next six months, we will need to cut back the number further and find easier-to-assemble
surrogates because of this point. The easiest way around the leading indicator challenge is through the use of
milestones. To be actionable, a strategy needs to be stated as a set of programs and initiatives. Once that’s done,
one of the most important leading indicators is achievement of critical milestones for each initiative. The planning
process needs to outline these milestones, which is where the rubber meets the road regarding linking how people
spend their time with the strategy. In our experience, milestones should be the top leading indicator. Milestones
should be substantial achievements that are assignable and are needed within the next six months.

5. After the metrics are set, including a healthy set of milestones as leading indicators, targets must be set. People
respond well and are often motivated when there’s something to aim for. A key choice is whether to set incremental
steps or stretch goals. The latter is often useful when it’s critically important that the organization break out of old
habits if they are to achieve a strategic goal.

6. Finally, senior management needs to be committed to both the strategic planning process that will generate the
goals and the control/review process that follows, or all of this will have been a waste of time. In our experience,
after the plans are done and the ideal metrics defined, it takes a full year for the organization to assemble, routinely
report on and begin adjusting course based on the metrics. That’s if management diligently follows through with
“inspection.” If they don’t — if they continue to follow their old guides, which are usually the monthly accounting
figures — forget value creation through measuring the right things.

In summary, strategy monitoring and control is a lot more than reporting metrics. The starting point for developing your
approach is the question “What metrics, targets, review process and review style will most change behaviors toward the
work that will create the most value?” The emphasis must be on the review process, with the goal being course
adjustments, not measurements. But with this philosophy, there is greater likelihood that the right metrics will be chosen
and their use will indeed be value creating.  In addition to that, the final step in any planning process is to monitor and
evaluate progress.  The same way as you check the signposts along a road when completing a journey, it is similarly
important to check that development is on track.

The management committee should use reports against its annual operational plans to review progress towards
meeting the strategic aims and objectives.  Therefore, they must ensure that whoever is doing the work is keeping
appropriate records so that progress can be assessed.  This will involve, at the implementation stage of your plan, being
clear what systems and structures are required.  The things you decide to measure will give an indication of how well
you’re doing, hence, the name indicators or performance measures. Before completing your plan, you need to agree how
and when it will be monitored and reviewed and what information the Management Committee needs to receive in order to
review progress.

Monitoring and evaluation (often called M&E ) is a combination of data collection and analysis (monitoring) and
assessing to what extent a program or intervention has, or has not, met its objectives (evaluation).   Monitoring and
Evaluation have been used to assess the performance of the project, program, and social initiatives.
Monitoring, reviewing and evaluation activities are undertaken to track progress against desired outcomes
and provide feedback on the process itself, to inform ongoing and future strategic activities.
Surprisingly not all retailers are highly skilled in these areas, partially because they are busy on competing
priorities and spending all their available time dealing with pressing day-to-day issues. Taking the time to
evaluate and review strategy can itself be a future time saving activity.
Monitoring is an activity that occurs at established milestones throughout the implementation phase. It can
be invaluable in helping businesses track progress and identify variations from the expected outcomes in time,
to make necessary adjustments and realign with desired outcomes.
 Depending upon the scope, speed and importance of the action plan being implemented; monitoring may be
a highly frequent or an infrequent activity. It is best undertaken with clear responsibilities and accountabilities
established so confusion does not stall the monitoring process.
When conducted well, a strategic review can deliver significant benefits to a business. In addition to the direct financial
benefits of improving performance and targeting new growth opportunities, the process itself can improve
alignment between employees, senior management teams and other key stakeholders, helping to drive a high-
performance culture and clarity on the future direction of the business. When unexpected issues or deviations arise, it
is necessary for them to be flagged and shared with stakeholders empowered to take action. It may be that
staff is responsible for monitoring the implementation phase are not the same as those empowered to take
corrective action.

Monitoring and reviewing helps to:

 assess what is working and what is not
 make adjustments to plans and strategies
 discuss new workforce and organisational issues which may have arisen.

Consider at the beginning of the process what qualitative and quantitative data needs to be collected, so that baseline
data can be established and progress measured.

Decide what lead and lag indicators provide the highest value to the evaluation:
 Lead indicators are the 'canary in the mine' that help inform future activities
 Lag indicators provide valuable information about what has happened in the past.

Key questions
 Have we delivered against our strategic priorities?
 Have we met our service delivery obligations?
 Did we do what we said we'd do, how well did we do it and are stakeholders/customers better off?
 Have we achieved and/or made progress towards planned outcomes for the workforce and our organisation?
 Have we reduced key risk indicators in relation to the workforce?
You should include:
 key workforce data (profiles and capabilities)
 business plans and targets, outcomes and performance indicators
 planned actions, strategies and implementation progress
 proposed systems and organisational changes
 cost and benefit realisation of projects
 workforce quantitative performance data (i.e. turnover, absence and workforce safety data)
 qualitative information and performance indicators (i.e. culture, values and behaviours and staff feedback)
Information sources
 executive and management meetings
 employee and stakeholder surveys
 focus group feedback
 analysis of workforce data (payroll, recruitment, workplace health and safety) reviews of progress reports
 key findings from project review meetings
 organisation performance reports and assessments
 specific management and project reporting management systems
 MOHRI trend analysis

In recent years there’s been significant effort toward creating a “balanced scorecard” of metrics to serve as a guide
to performance improvement with real value creation versus improvements via tradeoffs. Moreover, efforts to include non-
financial and leading indicator metrics to help redirect worker behavior are being used to balance purely financial goals
with strategic imperatives. Yes, in the end we want an upward trend in financial indicators, but if this is all we’re managing,
the strategy will be short term and reactive.

Below are principles that we’ve discovered in setting up an effective value-adding strategy monitoring and control process.

1. The starting point is strategic goals, and then the initiatives to achieve them (see “Accepting the Fundamental
Challenge of Strategy Implementation”). The selection of metrics then follows from the questions: How will we know if
this is working? What leading and lagging indicators will guide us?

2. But what does one do with these measures? The most beautiful and balanced scorecard in the world won’t
compensate one iota for a poor review process — namely, an executive who reviews the metrics and uses them to
drive behavior change. The change occurs less because the metric is being reported and more because that’s what
management is paying attention to. Yes, what gets measured gets managed … if that’s what the boss is watching.

3. The actual review process can be informal or a rigid periodic review. It is the style and openness of the review that
makes all the difference in whether the organization will quickly seek effective course adjustments, seek excuses or
praise with little real direction change, or ignore much of the scorecard because in the end, the old lagging metrics are
 still implicitly the most important thing. When a review meeting is well run it is much more than a control tool. It is a
problem-solving session where the business examines what it has learned since the last review, with data (the metrics),
that serves as a basis for ongoing adjustments for even better performance. These adjustments are in the form of how
resources should be reallocated, especially the most important and scarcest resource of all: how people in the
organization will use their precious time.

4. The good thing about lagging metrics is they are usually objective and available via the company’s systems. Leading
measures often are not easily available and have only an assumed correlation with performance. These are limitations,
and the organization must determine that the value they’ll receive from these metrics far exceeds the cost and time of
assembling them. In our extensive strategic planning experience, after the most important goals have been defined, and
the balanced slate of metrics has been whittled down to the essential ones, invariably, within the next six months, we
will need to cut back the number further and find easier-to-assemble surrogates because of this point.

The easiest way around the leading indicator challenge is through the use of milestones. To be actionable, a
strategy needs to be stated as a set of programs and initiatives. Once that’s done, one of the most important leading
indicators is achievement of critical milestones for each initiative. The planning process needs to outline these
milestones, which is where the rubber meets the road regarding linking how people spend their time with the strategy. In
our experience, milestones should be the top leading indicator. Milestones should be substantial achievements that are
assignable and are needed within the next six months.

5. After the metrics are set, including a healthy set of milestones as leading indicators, targets must be set. People
respond well and are often motivated when there’s something to aim for. A key choice is whether to set incremental
steps or stretch goals. The latter is often useful when it’s critically important that the organization break out of old habits
if they are to achieve a strategic goal.

6. Finally, senior management needs to be committed to both the strategic planning process that will generate the goals
and the control/review process that follows, or all of this will have been a waste of time. In our experience, after the
plans are done and the ideal metrics defined, it takes a full year for the organization to assemble, routinely report on
and begin adjusting course based on the metrics. That’s if management diligently follows through with “inspection.” If
they don’t — if they continue to follow their old guides, which are usually the monthly accounting figures — forget value
creation through measuring the right things.

In summary, strategy monitoring and control is a lot more than reporting metrics. The starting point for developing your
approach is the question “What metrics, targets, review process and review style will most change behaviors toward the
work that will create the most value?” The emphasis must be on the review process, with the goal being course
adjustments, not measurements. But with this philosophy, there is greater likelihood that the right metrics will be chosen
and their use will indeed be value creating.

9.7 CONTINUOUS IMPROVEMENT FRAMEWORK

Continuous improvement is a way of thinking about your business. It’s about focusing on the different aspects of
your business to identify where there’s room for improvement. By discovering where you could be doing better, you can
find ways of optimizing your processes and performing efficiently to achieve your growth goals. The continuous
improvement model was originally applied to the manufacturing industry. This placed a strong emphasis on the reduction
of waste from time to raw materials. However, the continuous improvement model has since evolved into a wide range of
sectors and industries.

It’s that it does not concentrate on one big initiative to transform your organization. Instead, it’s about improving
your processes over time in small ways. In the CI model, continuous and on-going improvement of processes, services,
and products are a constant focus and are stressed. This allows you to maintain your edge over your competitors.

What is the Continuous Improvement Model?

Continuous improvement is a way of thinking about your business. It’s about focusing on the different aspects
of your business to identify where there’s room for improvement. By discovering where you could be doing better, you
can find ways of optimizing your processes and performing efficiently to achieve your growth goals.
The continuous improvement model was originally applied to the manufacturing industry. This placed a strong
emphasis on the reduction of waste from time to raw materials. However, the continuous improvement model has
since evolved into a wide range of sectors and industries.
Continuous improvement is also known as Kaizen. Kaizen originated in Japan shortly after the end of the
Second World War. It gained massive popularity in manufacturing and became one of the foundations of Toyota’s rise
from a small carmaker to the largest automobile manufacturer on the planet.

Continual Process Improvement Model

The term continuous improvement can be very abstract if not placed in a specific context. Explained shortly, it is a
never-ending strive for perfection in everything you do. In Lean management, continuous improvement is also known
as Kaizen.
Kaizen originated in Japan shortly after the end of the Second World War. It gained massive popularity in manufacturing
and became one of the foundations of Toyota’s rise from a small carmaker to the largest automobile manufacturer on the
planet.

In the context of the Lean methodology, continuous improvement seeks to improve every process in your company by
focusing on enhancing the activities that generate the most value for your customer while removing as many waste
activities as possible.

Many strategies and methodologies can be used when focusing on continuous improvement. Finding the right
one for a given industry is important as it will help maximize the results. All the continual improvement models,
however, will focus on similar types of improvement, as seen in this image:
Making ongoing improvement in performance, commitment, strategy, and process all help build up the
company's bottom line. This image also illustrates that any improvements in these four categories will also help build
up improvement in the overall quality being produced by the facility.
In the context of the Lean methodology, continuous improvement seeks to improve every process in your
company by focusing on enhancing the activities that generate the most value for your customer while removing as
many waste activities as possible.

There are three types of waste in Lean:

Muda – The seven wastes
Mura – The waste of unevenness
Muri – The waste of overburden
Muda consists of 7 major process wastes: transport, inventory, motion, waiting, overproduction, over-processing,
and defects.
Removing all of them completely is nearly impossible but focusing on minimizing their negative effects on your
work is crucial for successfully implementing continuous improvement.
Mura is caused by unevenness or inconsistency in your process. It is responsible for many of the 7 wastes of
Muda. Mura stops your tasks from flowing smoothly across your work process and therefore gets in your way of reaching
continuous flow.
Muri is a major problem for companies that apply push systems. When you assign too much work to your team,
you place unnecessary stress on both your team and process.
Muri is usually a result of Mura, and if you want continuous improvement to become part of your culture, you need
to focus on getting rid of those wastes.

Focusing on Continuous Improvement in the Workplace

 A continuous improvement strategy is any policy or process within a workplace that helps keep the focus on
improving the way things are done on a regular basis. This could be through regular incremental improvements or by
focusing on achieving larger process improvements.
Facilities that focus on improving continuously become more competitive over time and can maintain their
advantages in their industry, but only if the improvement efforts are done correctly. Taking good baseline
measurements and taking ongoing measurements will help identify the effectiveness of the efforts being made.

Plan-Do-Check-Act
Another helpful concept is the "plan, do, check, act" process. This is a cyclical process that walks a company or
group through the four steps of improvement. By continuing to cycle through these steps, improvement is always being
worked on and evaluated. The model Plan-Do-Check-Act is the most popular approach for achieving continuous
improvement. Also known as the Deming circle (named after its founder, the American engineer William Edwards
Deming), it is a never-ending cycle that aims to help you improve further based on achieved results. It was first
developed for quality control but, in time, became an instrument for achieving continuous improvement.
Each step builds on the previous step, and then feeds into the next.

Plan - In the planning phase, teams will measure current standards, come up with ideas for improvements, identify
how those improvements should be implemented, set objectives, and make the plan of action.
Do - Implement the plan that was created in the first step. This includes not only changing processes, but also
providing any necessary training, increasing awareness, and adding in any controls to avoid potential problems.
Check - Taking new measurements to compare with those taken prior to the change is an important step here.
Analyze those results and take any corrective or preventative actions to ensure the desired results are being achieved.
Act - All the data from the change is analyzed by management teams to determine whether the change will become
permanent or if further adjustments are needed. The act step feeds into the plan step since once a change has been
fully implemented, it is time to begin looking for new ways to make further improvement.

Improvement Strategies
The concept of continuous improvement is an umbrella term covering many methodologies used to achieve the
goal. Choosing the right strategies for a facility will help maximize results and ensure the long-term success of the
efforts. A facility can choose to have multiple continuous improvement strategies in place at any given time. Different
areas of the company, or even different departments within an area, can each work off of a separate strategy to
maximize results.

Lean & Continuously Improving

Lean continuous improvement is a strategy designed to help eliminate waste throughout a company. Waste is
anything that doesn't add value for the customer. In many ways, this continuous process improvement strategy works
to eliminate problems rather than directly improve a process. The results are similar, but by taking a waste-focused
approach, it is often easier to come up with goals from which improvement strategies can be developed.

Value Stream Mapping

 Value stream mapping is one of the most important continuous improvement strategies because it can be used
within almost all others. This process looks at the design and flow of processes within a company to see where value
is being added. A value stream map can also be a great brainstorming tool for areas that could be improved.
A good value stream map will be very detailed and formatted like a flow chart. It is utilized to help isolate each of
the steps in a process to see where value is being added and where it is not. This makes it easier to eliminate or
modify the areas where value is either missing or could be increased in the process. The idea of value stream mapping
was originally developed for manufacturing processes, but it can be adapted to other industries as well.
Kaizen
Kaizen is a popular continual improvement strategy that has been around since the 1980s. This concept helps
focus on improvements that are based on making a lot of small changes rather than fewer larger changes. The ideas
for the changes typically come from the front-line employees rather than the management team or other planning
department. This is effective because those working on the front-line are directly impacted by problems and will be
able to more easily identify where improvements can be made.

Some of the benefits of Kaizen include:

Capital Investments - By focusing on smaller, incremental changes, the company doesn't typically need to come up
with significant capital resources to implement the changes.

Engaged Workplace - By encouraging employees to contribute the improvement ideas, they become more engaged.

Long-term Improvement - Each small improvement made builds on previous improvements, leading to a snowball
effect.

Total Quality Management

Total Quality Management (TQM) began in the manufacturing sector, but has since been adapted for use in
many other environments. It focuses on improving employee involvement, customer satisfaction, communication, and
other key elements for success within a company. This is a continuous improvement strategy that is often incorporated
into or alongside, other strategies to help maximize the successes.
The 5S Strategy
5S is an organization method that helps identify how a workspace should be organized to improve efficiency
and effectiveness. This is done by identifying what is needed at each step of a process and ensuring it is immediately
available. There are many ways to do this including organizing tools so they are easy to find, moving machinery
around so that a part flows from one to the next, and ensuring stored parts or equipment are available when needed.

Continual Improvement Tools

Having the right continuous improvement tools is essential to the long-term success of any strategy. These tools
can be anything that helps ensure the quality improvement process can move forward successfully.
Some simple examples of this include foam tool organizers to ensure tools are kept in good working order and
stored where they are easy to access. Floor marking tape is an excellent example of improving visual communication,
which can help improve efficiency and boost safety, which is essential for improvement.

Implementing Continuous Process Improvement

There are many strategies and methodologies available to help companies implement continual improvement.
These are a great way to start since they offer guidance on taking those first steps, as well as longer-term ideas for
how to keep this strategy moving forward when it becomes more difficult.
 Most companies don't strictly implement just one strategy, but rather adapt existing methodologies to meet their
specific needs. Using something like Lean as a base from which to build on can be a very effective strategy to keep a
facility focused on improvement strategies today and long into the future.
What makes the continuous improvement model different from other business management ideas?
It’s that it does not concentrate on one big initiative to transform your organization. Instead, it’s about improving
your processes over time in small ways. In the CI model, continuous and on-going improvement of processes,
services, and products are a constant focus and are stressed. This allows you to maintain your edge over your
competitors.
Many successful and popular methodologies have emerged out of the continuous improvement movement. You
might have heard of some of the following methods:
 Six Sigma
 Kaizen (“kai” means “change” and “zen” means good).
 Lean
 Toyota Production System

All of the above methodologies have been developed for different types of organizations with different goals in
mind. And yet, they all share the 6 principles of the continuous improvement model.

Principle 1
Improvements are based on small changes, not major paradigm shifts or new inventions
Many businesses identify problems in their organizations and act radically to change them. This can also pose
its own risks to the stability of the organization. You need to see your business as a system or organism. If you make
changes somewhere in your organization, you might find that this affects other parts of your business. That’s why this
principle is so important to make improvements to your business. Changes need to be small and incremental to reduce
the risk, fear and resistance from elements within your business. By implementing smaller changes; you’re more likely
to be able to achieve buy-in from your employees and other stakeholders. Unlike with huge transformative changes,
you begin making small incremental changes immediately. You don’t have to wait for the perfect time to make the
paradigm shift.

Principle 2
Ideas come from employees
The continuous improvement model is a bottom-up rather than a top-down approach to management. This
means that you don’t simply want top management and executives generating all of the ideas and making the
decisions. Instead, you need to involve your employees in the improvement process to help identify ways the
organization can improve. This ensures that your employees feel a sense of ownership and engagement in the
changes being made. Additionally, the employees work on a daily basis with the processes, products, and services
that your business utilizes. Therefore, they’re likely to have a different and important perspective on ways to improve.
The incremental problem-solving approach is particularly suitable for involving employees in the process. Your
employees might not be able to come up with the answers to the great challenges of your organization at the drop of a
hat. However, they are capable of improving the way they carry out their daily work. There are many useful techniques
to discover ways to improve your business. For example, you might try asking your employees to suggest ways that
they can save 10 minutes every day. It’s not only important to have your employees identify the problem, it’s also
essential that they implement the solution. By empowering your employees to find solutions to problems in your
business you’ll achieve better results. By implementing a single idea to save your employee 10 minutes every day, you
can have a big impact. After all, if you have one hundred employees who all save 10 minutes each day that amounts to
almost 17 hours of work per day saved.

Principle 3
Incremental improvements are typically inexpensive to implement
Major changes to your organization will involve a substantial expense to your business. However, incremental
improvements are often much more cost-effective. You might find that many changes that are proposed by your
employees involve the elimination of specific processes. This is much cheaper than the creation of new processes to
ensure efficiency. It’s amazing how often your employees can identify ways to reduce waste for your business. In
addition, many changes will end up saving your organization money by making your processes more efficient.

Principle 4
Employees take ownership and are accountable for improvement
One of the biggest challenges in business management is getting an employee to change something they’ve
been doing for a long time. Many employees have the skills and knowledge that they have built up over the years.
They don’t simply want to throw this away because management has come up with a new idea. That’s why small
changes that came from your employees themselves are much effective. This way they see the value in making the
change. This also eases the pressure on your management.
 What about if the employee did not come up with the change personally?
Knowing that a co-worker who has actually worked with the same processes came up with the solution that
reinforces the value of the change. Involving your employees in the continuous improvement process makes sure they
feel empowered to take responsibility for the changes. The employees have identified the problem. They have
proposed the solution. They have implemented the change. And now they have monitored the impact of the change.

Principle 5
Improvement is reflective
Regular feedback about how things are going is another important principle of the model. It’s important to
establish communication channels between employees and management at each stage of the improvement plan. This
ensures that employees stay engaged with the process and that the improvement goals are on track. Ensuring the
improvement is reflective is one of the most challenging aspects of the continuous improvement model. It can be
extremely time-consuming for management to stay on top of every stage of the improvement plan. As a result, it’s
common for meetings to get re-scheduled and emails to get stuck in the inbox. That’s why it’s essential that you open
up communication and collaboration in real-time. Employees keep up to date reports on the program, while
management can monitor the improvements that are relevant for them.

Principle 6
Improvement is measurable and potentially repeatable
It’s important to be aware that “change” and “improvement” are not always the same thing. Sometimes
businesses identify problems within their organizations and seek to make changes for the sake of change without
considering whether it is the right change.
How can you know whether the change has resulted in an improvement?
You have to ensure that the outcomes of improvements are measurable and repeatable. By finding tools and
indicators to measure the effectiveness of the outcomes, you can assess whether the change resulted in an
improvement. This way you can establish whether to apply the change to other aspects of your organization. Ensuring
that you get a return on your investment is an essential part of the continuous improvement model.

Adopting Continuous Improvement – Tools and Techniques

Understanding the theory behind it is the first step in applying continuous improvement to your management
culture. To set yourself up for continuous improvement, you need to create a suitable environment within your company.

In Lean management, there are three major approaches for achieving continuous improvement:

The model Plan-Do-Check-Act is the most popular approach for achieving continuous improvement.

Also known as the Deming circle (named after its founder, the American engineer William Edwards Deming), it is a
never-ending cycle that aims to help you improve further based on achieved results. It was first developed for quality
control but, in time, became an instrument for achieving continuous improvement. In the planning phase, you need to
establish the objectives and processes necessary to deliver results per the expected output (the target or goals).

Setting output expectations is a key to achieving continuous improvement because the accuracy of the goals and
their completeness is a major part of the process of improving. It is recommended to start on a small scale so you can test
the effects of the approach. The second phase is “Do”. It is straightforward as you need to execute what you’ve laid down
during the process's planning step. After you’ve completed your objectives, you need to check what you’ve achieved and
compare it to what you’ve expected. Gather as much data as possible and consider what you can improve in your process
to achieve greater results next time. If the analysis shows that you’ve improved compared to your previous project, the
standard is updated, and you need to aim for an even better performance next time. In case you’ve failed to improve or
have even achieved worse results compared to the past, the standard stays as it was before you started your last project.

Root Cause Analysis

Root Cause Analysis (RCA) is a technique practiced in Lean management that allows you to achieve Kaizen by showing
you the root causes of your process's problems. It is an iterative practice that drills down into a problem by analyzing what
caused it until you reach the root of the negative effect. It can be considered root only if the final negative effect is
prevented for good after the cause is removed. To apply RCA for continuous improvement, you need to perform a
thorough analysis of the problem.

For example, let’s say that you are leading a software development team. When you released the latest update of
your product, your support team was bombarded with bug reports from customers. You begin to look for the root cause
starting from the top of the problem. You investigate how your QA team allowed for this to happen and discover that they
failed to run all the necessary tests on the software. Afterward, you look into what caused that and learn that the
development team provided them with the features that were to be released at the last possible minute. Looking into the
cause of that, you find out that the developers finished the majority of features right before they submitted them for quality
assurance.

Digging into the cause of that, you find out that your development team took more time than you have planned to
develop the features in the first place.
Investigating the reason behind that, you discover that your team was inefficient because each developer simultaneously
worked on a few features. Therefore, instead of giving features one by one to QA, they submitted a batch that was too
large to process on short notice.

Analyzing why this happened, you realize that you haven’t placed any regulations on the amount of work that can
be in progress simultaneously and did not ensure the evenness of your process. Reaching this point, you conclude that
the root cause of the bug problem is Mura (the waste of unevenness). To achieve continuous improvement, we suggest
you analyze each problem's root cause and experiment with solutions. Often, problems may turn out to be far more
complex than you think, and the RCA would require a few iterations before preventing the negative effect from ever
happening again.
If you are not sure how to perform a root cause analysis, we suggest looking into the 5 Whys for determining root causes.

Applying Lean Kanban

To continuously improve your process, you need to visualize what needs to be improved clearly. If you lack
visibility, you’ll be able to improve from time to time but won’t be able to spot symptoms of a problem before it is too late.
When Toyota was looking for a way to do that, they developed Kanban as a system for improving the workflow efficiency
of the production process. Eventually, Kanban was adapted for knowledge work and managed to help thousands of teams
to achieve continuous improvement. The method relies on six core practices for minimizing the wastes in your process:
 Visualize your workflow
 Eliminate interruptions
 Manage flow
 Make process policies explicit
 Create feedback loops
 Improve collaboratively

To visualize your workflow, the method relies on whiteboards for mapping every step of your process. The board is
divided by vertical lines forming columns for the different stages.
A basic Kanban board consists of three columns: Requested, In Progress, Done. Each task that your team is working on
is hosted on a Kanban card (originally in the form of a post-it note) and needs to pass through all the stages of your
workflow in order to be considered complete. Kanban boards allow you to monitor your process's evenness and can be a
serious weapon for minimizing Mura. Besides, they show you the amount of work that every person on your team has and
can help you prevent overburden (Muri) by allowing you to delegate tasks according to your team's capacity.
Finally, you can monitor the pace at which work is progressing across your workflow and achieve continuous improvement
of your workflow efficiency.

For the sake of eliminating interruptions, Kanban relies on limiting the work that can be in progress simultaneously. The
goal is to eliminate multitasking, which is nothing more than a constant context switch between assignments and only
harms productivity. With the help of Kanban, you can manage the flow of work in your process. To ensure an even
process, you need to be aware of where work gets stuck and take action to  alleviate the bottlenecks in your process. This
way, you can experiment with the different steps of your workflow and keep improving continuously. In Lean management,
continuous improvement is a group activity. Therefore you need to make sure that your team understands the common
goal and why their part of the process is important.

By making process policies explicit, you’ll encourage your team members to take more responsibility and take
ownership of their process. For positive change to happen there needs to be a constant flow of knowledge between you
and your team.

The Kanban board itself is a great feedback loop generator because it makes it visible who is doing what at any time. In
combination with the widely adopted practice of holding daily stand up meetings between the team, you can continuously
improve information sharing between individuals.

Other techniques that are part of the continuous improvement arsenal are the Gemba walk and the A3 report. The A3
report is a structured approach that helps you deal with problem-solving issues, while the Gemba walk encourages you to
go and see where the real work happens. Both are extremely useful, and they can help you discover problematic parts in
your workflow.

Bottom Line
Kaizen is a never-ending quest for perfection, but you’ll start feeling the benefits of continuous improvement on
your business when your whole team takes it by heart.
 Kanban and the other continuous improvement tools can help you with that because your team will obtain lots of
knowledge about process improvement and workflow management. As a result, each individual will understand how your
process works and how it can be improved.

I n Summary
There are many ways to achieve continuous improvement. All of them have one thing in common - analyzing what can be
done better compared to the past. You can sustain continuous improvement by:
 Minimizing the wastes in your process
 Creating a suitable environment for your team to improve
 Implementing the PDCA cycle
 Always looking for the root cause of existing and potential problems
Apply the Kanban method for workflow management