How to Analyze a Strategic Plan

Imagine the moment when your company’s entire future hinges on a single document: the strategic plan. It’s not just about hitting some targets or setting quarterly goals. This document embodies the very blueprint of where your company is heading. Analyzing a strategic plan might seem like a routine task—just another box to check off in your yearly responsibilities—but, what if I told you the future of your business depends on how thoroughly you dissect that document today?

Let’s rewind a bit. Picture a company that, on paper, had everything going for it. A robust team, sufficient funding, and an ambitious strategic plan that promised significant growth over five years. The numbers all added up; it looked like smooth sailing. Fast forward a couple of years, and this company is no longer around. What went wrong? The fault wasn’t in the plan itself, but in how it was analyzed—or rather, how it wasn’t analyzed.

The key takeaway here is that a strategic plan isn’t a static document. It’s a living, breathing roadmap that needs to be carefully evaluated and updated as circumstances evolve. But how do you go about analyzing it effectively? Let’s dive into a reverse-engineered approach to show you how critical the analysis of a strategic plan really is.

Understanding the Stakes Before Anything Else

What’s often missed in analyzing strategic plans is the initial step of understanding what's truly at stake. Most people will begin by focusing on the metrics, but that’s a misstep. Before delving into performance indicators and growth charts, ask yourself a more existential question: "What’s the ultimate goal of this plan?" Is it market expansion? Redefining the company's position in the industry? Innovating a product line? If you don’t know the end game, you won’t know what success looks like. Understanding this is fundamental.

The Hidden Risk of Assumptions

One of the critical elements in a strategic plan analysis is identifying assumptions. Every plan makes assumptions—whether it's about market conditions, customer behavior, or even internal capabilities. The problem is that assumptions often go untested. Imagine you're planning to grow by expanding into a new market, but your plan assumes that competitors won’t react aggressively to your entry. This assumption could lead to an overestimation of potential revenue. So, start by questioning every assumption baked into the plan. Which assumptions, if wrong, could derail the entire strategy?

A solid analysis doesn’t just review the numbers; it evaluates the validity of the core assumptions that support those numbers. Now, this might seem like a mundane task, but assumptions are often the Achilles’ heel of any strategic plan. Think about it: how many failed startups can attribute their downfall to faulty assumptions? Far too many.

Benchmarking Performance: A Snapshot vs. A Motion Picture

Analyzing a strategic plan isn’t just about reviewing last year’s performance. If you’re only doing that, you’re missing the big picture. Think of your analysis as watching a movie, not looking at a single snapshot. One year’s results only provide a frame in a much larger narrative. You need to evaluate trends, patterns, and deviations over time.

This is where benchmarking comes into play. Are you measuring your performance against industry standards? If not, why? What if your company is doing well in isolation but failing compared to competitors? Understanding these benchmarks is essential for recognizing whether your plan’s objectives are ambitious enough or if they need recalibration.

Take a company that aimed to grow its market share by 15% over five years. On the surface, it seems like a reasonable goal. But after comparing their growth against competitors who managed to increase by 30%, it’s clear their strategic goals weren’t ambitious enough. Had they benchmarked their performance properly, they could have pivoted sooner and avoided becoming stagnant in a rapidly evolving industry.

Red Flags in Execution: What to Look For

Often, the failure of a strategic plan comes down to execution gaps. These are the hidden pitfalls that derail even the best-laid strategies. What should you be looking for when analyzing how a plan is executed?

1. Misalignment between departments: Is every department aligned with the strategic objectives? This is crucial because a misalignment creates inefficiencies and slows down progress.

2. Lack of accountability: A plan without clear accountability is doomed from the start. Who owns which objectives? Without clear ownership, there’s no one to drive the initiative forward.

3. Unclear metrics for success: How are you measuring success? If there aren’t clear KPIs attached to every part of the strategic plan, you won’t know if you’re winning or losing.

4. Resource Misallocation: Often, companies don't allocate enough resources to the initiatives outlined in their strategic plan. This leads to underperformance. Are the right resources in place? And are those resources flexible enough to adapt as the plan evolves?

Identifying these gaps early on can save a company from the painful process of scrambling to course-correct once things have already started going wrong.

Agile Planning and Flexibility: Don’t Stick to a Failing Plan

One of the biggest mistakes companies make is sticking to a plan that isn’t working. Often, organizations continue to push forward with a failing strategy because they’re emotionally attached to it or have already invested too much time and resources into it. This is where agility comes in. An agile strategic plan allows you to pivot when necessary. When analyzing a plan, look for signs of flexibility. Can the company pivot if the current strategy proves ineffective?

Take Kodak, for example. At its height, Kodak had a strategic plan to maintain dominance in film photography. But when digital photography began to emerge, they were too slow to pivot. Despite warning signs and declining market share, Kodak stuck to its original plan, ultimately leading to its downfall. An agile approach might have saved the company by allowing it to shift resources into digital more quickly.

Incorporating Data and Analytics

Data analysis is critical when reviewing a strategic plan. This doesn’t just mean looking at revenue and profit margins. A robust analysis incorporates various data points, including market trends, consumer behavior analytics, and operational metrics.

For example, a retail company might notice that while their overall sales are increasing, their customer acquisition cost is skyrocketing. Without analyzing these additional data points, the company might think the strategy is working, when in fact, they are losing profitability. Analyzing these broader sets of data provides a more comprehensive view of whether the strategic plan is succeeding or failing.

Let’s add some numbers here to illustrate:

Metric	Last Year	This Year	Benchmark
Revenue Growth	10%	8%	12%
Customer Acquisition Cost	$50	$65	$40
Market Share	15%	14%	20%

This data paints a more nuanced picture. Sure, revenue is growing, but at a slower rate, and the cost of acquiring new customers is increasing—a potential red flag. Moreover, the market share is shrinking, which suggests that competitors are growing faster.

Wrapping Up: What the Future Holds

Strategic plans are essential, but they’re only as good as the analysis they undergo. Understanding the stakes, assumptions, benchmarks, and execution risks are all part of ensuring that your company doesn’t fall into the trap of following a flawed roadmap. Moreover, flexibility and data-driven insights provide the foundation to pivot when necessary.

Remember, it’s not about having a perfect plan. It’s about having a plan that’s continuously analyzed, challenged, and adapted to changing conditions. The future of your company may very well depend on it.