Strategy, Planning and Performance Management
From purpose to measures
Strategy is the set of choices about where to play and how to win, translated into plans, budgets and measures. Candidates must understand the strategic planning cycle: environmental and stakeholder analysis, vision and objectives, option generation and appraisal, selection, resource allocation, implementation, and review. Know the main analytical tools and, more importantly, when each is appropriate: SWOT for structured reflection, PESTLE for the external environment, Porter's five forces for industry attractiveness, value chain for internal capability, and scenario planning for deep uncertainty.
Performance management links objectives to critical success factors and key performance indicators. Good indicators are few, balanced across financial and non-financial dimensions, owned by named individuals, and linked to targets and incentives. Understand the balanced scorecard perspectives (financial, customer, internal process, learning and growth) and the risk of measure fixation - where people optimise the metric rather than the outcome. Distinguish lead indicators (predictive) from lag indicators (historical), and outputs from outcomes.
Traps to watch
Questions often present a well-worded plan with no resource commitment or no review mechanism and ask what is missing. Others confuse a target with a forecast, or assume more KPIs mean better control. Beware options that treat strategy as a one-off document rather than a living set of choices revisited as the environment changes.
Worked example
A charity reports rising numbers of people served (output) but no change in the social problem (outcome). Rule of thumb: ask what would change if the strategy worked. If the answer is only activity volume, the performance framework measures effort, not effectiveness - add outcome and lead indicators.