Two decades ago, if your organizational performance was lagging your expectations based on your market studies, your organization’s previous performance or benchmarking with other successful organizations in the same sector, the corresponding professional advice would have been to conduct an internal audit of your operations to diagnose their efficiency effectiveness and economic, to find out performance gaps and to identify and assess associated risks.
But this is no longer the case. Today, the reasons for an organization’s weak performance might very well lie at the strategic level, not the operational or financial one. In other words, the cause might lie at the very highest level of the management hierarchy represented by your strategy and business model – not at the bottom (procedures and processes).
The continuous, radical and dramatic changes in the political, economic, social, professional, technical, security and legal aspects of the business environment, whether at local, regional or international level have disrupted many long-held assumptions and practices and continuously changing the rules of the game for all business. Hence periodic and ongoing reviews of strategy and business model have become a vital task for small and large businesses and organizations alike. Those that neglect to do this soon find themselves out of the game, regardless of how great their initial potential for success is.
Perhaps the most prominent and apparent changes have been those of a technical and digital nature. Of note is the emergence and now-dominance of the sharing economy (gig economy), especially since 2008, and the impact this has had on even the finest details of our businesses strategically, operationally and financially. However, the reality is that these developments are nothing more than the tip of the iceberg.
Yes, regular internal audits at the operational and financial level are still important – more important than before, in fact – but most important is the need to review your strategy, business model and business plan frequently and regularly, perhaps once a year. The purpose of this is not only to preserve your competitive advantage and market share (and perhaps even to get ahead of others), but also to ensure that you do not suddenly disqualify yourself permanently from the game.
Remember, you don’t need to wait until your organization has hit a low point before making the decision to carry out these reviews. If you do so, it may be too late, and it might end up costing a lot more in the long run. So, make a decision to stay on top of your growth plan and intervene with the right strategic decisions at the right time