Strategic trajectory evaluation

Strategic trajectory evaluation is a method used to evaluate the performance of an organization over time in relation to its strategic goals and objectives. It involves analyzing the organization's historical performance and comparing it to its projected performance in order to identify trends and assess the effectiveness of its strategic initiatives.

Steps of strategic trajectory evaluation

The following are some of the key steps involved in a strategic trajectory evaluation:

1. Define the strategic goals and objectives of the organization: These should be specific, measurable, achievable, relevant and time-bound (SMART).
2. Collect historical performance data: This includes financial, operational, and market data, as well as data on key performance indicators (KPIs) that are relevant to the organization's strategic goals and objectives.
3. Develop projections for future performance: This includes forecasting future financial performance and estimating the impact of proposed strategic initiatives on key performance indicators.
4. Compare historical performance to projected performance: This allows the organization to identify trends and assess the effectiveness of its strategic initiatives.
5. Evaluate the alignment of the organization's resources with its goals and objectives: This includes evaluating the alignment of the organization's budget, workforce, and technology with its strategic goals and objectives.
6. Identify areas for improvement: Based on the analysis, areas for improvement are identified and recommendations are made to address them.
7. Implement and track actions: Based on the recommendations, actions are implemented and tracked to ensure that the desired results are achieved.

In summary, strategic trajectory evaluation is a method of evaluating an organization's performance over time in relation to its strategic goals and objectives. It helps organizations to identify trends and assess the effectiveness of their strategic initiatives, and to identify areas for improvement and make necessary adjustments to ensure success.

Applications

Strategic trajectory depicts the position of the company at the time in future. This position is expressed by the quantitative and qualitative parameters of the basic functions of the company taking into account the impact of the external environment.

In the case of quantitative assessment of strategic position we compare the actual values of what is achieved by the company with reference values.

Quantitative parameters are e.g.:

• Market share
• Profit / Loss
• Company's assets
• ROA, ROE indicators

Qualitative parameters are:

• Company position within the economy
• Capacity of management
• General development opportunities

The position of the company can be determined on the basis of the following table. Universal scales of reference values is used. The company is assessed according to specific categories, which allow to determine its position.

An example of a universal scale could be, for example.

The strategic position of the company	Scoring
P1-very good	81-100
P2-good position	66-80
P3-average position	50-65
P4-poor position	30-49
P5-very poor position	less than 30

Examples of Strategic trajectory evaluation

• One example of strategic trajectory evaluation is the Balanced Scorecard. This approach is used to assess the performance of an organization in four key areas: financial performance, customer satisfaction, internal processes, and learning and growth. By assessing how each of these four areas contributes to the organization’s overall strategy, a Balanced Scorecard can provide valuable insights into how the organization is performing.
• Another example of strategic trajectory evaluation is the Strategic Map. This approach is used to visualize the organization’s strategic goals and objectives, as well as the steps taken to achieve them. It involves creating a detailed map that shows how each of the organization’s goals and objectives are related to each other, as well as how they are supported by the organization’s strategies, resources, and capabilities.
• A third example of strategic trajectory evaluation is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis. This approach is used to evaluate an organization’s internal and external environment, and identify opportunities and challenges. This analysis helps the organization assess its current situation and develop strategies to address its weaknesses and capitalize on its strengths.

Advantages of Strategic trajectory evaluation

The advantages of strategic trajectory evaluation are that it provides an organization with a comprehensive view of its progress towards strategic objectives, and identifies areas of improvement. It also allows an organization to evaluate the effectiveness of its strategic initiatives and assess the results of its efforts. Furthermore, it can provide insight into future opportunities for growth, and allows for the identification of potential issues that could disrupt the organization’s trajectory. Additionally, it can help organizations to track their progress over time and develop strategies to maximize their performance. Finally, it can be used to benchmark performance against that of competitors, to provide a clearer picture of the organization’s competitive positioning.

Limitations of Strategic trajectory evaluation

• Strategic trajectory evaluation has some limitations that should be taken into consideration when deciding whether it is the right evaluation method for an organization.
• One limitation is that it requires access to historical and future performance data. Without these data points, it is difficult to accurately assess the progress of an organization’s strategy.
• Another limitation is that it is difficult to account for external factors that may affect the performance of an organization. For example, changes in the economic climate, competition, or regulations can all have an impact on the success of an organization’s strategy.
• Additionally, strategic trajectory evaluation does not consider the impact of individual initiatives or the resources required to implement them. It is therefore difficult to assess the effectiveness of individual strategies in the context of the overall performance of an organization.
• Finally, it is hard to predict the future performance of an organization, and this can lead to a lack of accuracy in the evaluation of an organization’s strategic trajectory.

Other approaches related to Strategic trajectory evaluation

• Strategic planning: Strategic planning is the process of developing a comprehensive plan for an organization's future direction and success. It involves setting goals and objectives, analyzing internal and external environments, formulating strategies, and implementing tactics.
• Strategic Management: Strategic management is the process of making and implementing decisions and plans based on an organization's strategic objectives. It involves analyzing the organization's competitive environment and developing strategies to gain competitive advantage.
• Performance management: Performance management is the process of measuring and evaluating the performance of an organization towards its strategic objectives. It involves tracking and measuring performance, setting performance goals and objectives, and providing feedback to improve performance.
• Risk Management: Risk management is the process of identifying, assessing, and managing potential risks in order to protect an organization's performance. It involves identifying potential risks, assessing the likelihood and impact of those risks, and taking steps to mitigate or avoid them.
• Market Analysis: Market analysis is the process of researching and analyzing an organization's target market in order to identify opportunities and areas for improvement. It involves studying market trends, customer preferences and behaviors, and competitive dynamics in order to develop strategies for success.

In summary, strategic trajectory evaluation is a method used to evaluate the performance of an organization over time in relation to its strategic goals and objectives. Other approaches related to strategic trajectory evaluation include strategic planning, strategic management, performance management, risk management, and market analysis. These approaches are all used to analyze, evaluate, and improve an organization’s performance and success.

Strategic trajectory evaluation — recommended articles

Key success factors — Strategic management tools — Internal analysis — Strategic management functions — Strategic importance — Strategic control — Integrated measuring system — Strategic decision making — Strategic planning functions

References

• Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard business review, 72(1), 107-114.