Strategic Feedback

Performance Measurement (or control) is usually depicted as the last phase. However, this way of looking at things is not applicable to strategic management. Since planning begins by setting premises in order to structure the decision making field, a large number of possible situations are removed from consideration. This is not done without a certain risk. Strategic Performance Measurement should therefore offset the selectivity that results from planning (Steinmann/ Schreyögg 2000, pp. 247-248). In this context, the terms “strategic learning” or “double loop learning” are commonly heard.

Even if target and actual values largely coincide, changes in the basic conditions on which planning is based can cause the strategy to become obsolete in the long term. The purpose of the feedback process, therefore, is to find out if the strategic objectives are still valid. In contrast to the question posed by operational Performance Measurement, strategic feedback asks: “Are we doing the right things?”

In a company in which there is a danger of plans being frequently revised – for example, because of a change on the executive board – a plan/plan comparison may also be recommended. This comparison shows how the revised plans differ from the original plans.

It is possible to distinguish between two different levels of comparison. A premise check starts with the assumptions made and attempts to determine if they were made incorrectly. Strategic monitoring, on the other hand, acts as a kind of global safety net. It takes into account the fact that there can be a large number of critical events that were not recognized when the premises were laid out.