You’ve put in the time to create a strategic plan for your startup. You’ve invested the effort and resources to implement the plan. Now it’s time to determine if it worked. But how do you know if the strategic plan was a success?
According to McKinsey, 70% of strategic initiatives fail. The five main reasons for the failure of these strategic plans are misinterpretation of the opportunity, poorly designed strategy, misalignment in competencies, lack of follow-through, and changes in external factors. You can create a great strategy, but it might fail due to poor execution or reasons beyond your control. The only way to know for sure is to measure the results of your strategic plan. But what do you measure, how do you measure, and how do you decide what matters when you get the results?
Let’s dive into how to measure the success of your startup’s strategic plan.
- Measuring the success of the strategic plan increases the likelihood that the plan will succeed
- Choose the right metrics when measuring the success of your strategic plan
- Connect metrics to goals to ensure you measure what matters most in your strategic plan
Reasons for Measuring the Success of a Strategic Plan
You should measure the results of your strategic plan to:
- Ensure that you are performing activities within the parameters laid out by the strategic plan
- Determine that the activities you are performing are consistent with your corporate mission, vision, and values
- Assess your company’s ability to achieve its goals and identify problems
Using Metrics to Measure the Success of a Strategic Plan
Measuring the success of your strategic plan depends upon choosing the right metrics and connecting those metrics to specific goals.
Choose the Right Metrics
When measuring the success of your strategic plan, it’s important to choose the right metrics. Purposeless data cannot help you make informed decisions and can actually confuse the analysis of the results. Ideally, you should have identified the key metrics in your strategic plan. If you haven’t already done so, use metrics to measure:
- Milestones: Completing tasks or projects by certain dates
- Launching your website
- Purchasing new equipment
- Obtaining a business loan
- Hiring new salespeople
- Key performance indicators (KPIs): Analyzing data based on quantifiable performance
- Acquisition of customers
- Profit and loss
- Awareness metrics (e.g., impressions, shares, likes)
Connect Metrics to Goals
Metrics can measure different elements of your strategic plan. Tie specific metrics to different goals so you can measure what matters. Again, your strategic plan should describe the goals you want to reach. Connect your metrics to your strategic objectives so you can direct your team on the actions to take to achieve these goals. Strategic goals with matching metrics can be:
- Financial (e.g., profits, revenues, cash flow, budget)
- Marketing and sales (e.g., conversions, repeat customers)
- Operational efficiency (e.g., value creation)
- Environmental (e.g., energy usage)
Simplify the Measurements
Limit the number of metrics that you track for different goals. Using too many KPIs could cause confusion and impede decision-making. Train team members in different departments on how to keep current data and track KPIs. Failure to educate staff on metric usage may lead to improper monitoring or updating of data, which could negatively impact the strategic plan.
Use Dashboards and Applications for Tracking and Reporting
Many software applications (e.g., CRMs) have performance dashboards that enable you to track and report on KPIs tied to your strategic plan. They also enable you to publish reports on progress toward milestones and metrics for stakeholders and team members. Use intuitive visuals to clearly present data and conduct performance reviews when discussing the results of your startup’s strategic plan.
The Importance of Measuring Your Startup’s Strategic Plan
After you have implemented your strategic plan, use the right metrics to measure its success. It is important to track your progress toward key goals, ensure you are performing the right activities for achieving those goals, and connect your metrics to specific goals.
Do you need help creating a strategic plan for your startup or measuring the success of your strategic plan? Sellerant can guide the way.