Have you ever wondered what a strategic audit could do for your business? Would it be useful for your company? If yes, how would you do it?
What is the Return-on-Investment of a Strategic Audit in YOUR Company?
Consider these questions:
- What increase in organizational performance could you get out of a strategic audit?
- Which results will make a positive, transformational difference to your company?
- Would your board be able to give better advice and be even more helpful to management based on such an audit’s data?
- Would a strategic evaluation lead to a more accurate SWOT analysis?
- How likely is it that the insights you gain from such a review of your business could lead to
- A better, more results-focused business strategy?
- Improved operations?
- Fine-tuned leadership and people dynamics?
- Best-in-class systems and processes?
- More successful marketing?
- Unearthing cases of things have gone wrong and finding new solutions?
- Better use of capital and other resources for focused investments in your business?
- All up, a strategic path to grow your business value faster and with greater ease?
- What return-on-investment is possible?
Helping you answer these questions for your situation in your business is the goal of this article.
- Let’s begin with the definition of what a strategic audit is.
- Next, discover a specific strategic business audit model called the Fresh Eyes Assessment™. You will see which eight areas of your company this assessment includes.
- Find out how to get everyone onto the same page with the Fresh Eyes Assessment™. Everyone means your company management, your staff, and if available, your board.
- Appreciate the difference between strategic analysis and SWOT analysis.
- Discover the ultimate benefits of a strategic audit/ Fresh Eyes Assessment™.
- Understand when a strategic audit brings the biggest return-on-investment. Find out how often to do one. Know which special circumstances warrant doing a strategic audit right away.
In a nutshell, a well-executed strategic audit has a great return-on-investment. It leads to significant increases in
- Your company’s bottom line,
- Your business value,
- Your team’s satisfaction (including your own),
- Your ability to navigate with great success through transition periods.
Let’s begin with this question:
What is a Strategic Audit?
The Oxford College of Marketing defines a strategic audit this way:
“A strategic audit assesses your:
- Current business strategy
- How suitable it is for your business
- Whether your company is in position to execute the strategy”
This definition of a strategic business audit is a great start. Yet, here is another question:
Is A Strategic Audit Focused on Evaluating Your Current Business Strategy?
In short, yes, for sure, evaluating your business strategy is an integral part of a strategic business audit. Yet, there is more to it.
The bottom line is this: A strategic company audit, when done right, unearths new opportunities and hidden challenges. You need to know these opportunities and challenges as best as possible, on an ongoing basis. That way you are able to adapt and tune your business strategy. Your business stays relevant despite the marketplace evolving faster now than ever before. And your business reaps success.
In our experience, it is not enough to audit only the current strategy of your business. First, you must find out more – with fresh eyes – about where you are at currently. What is your status quo right now?
Using a metaphor: Strategy is like a roadmap for driving to a given destination, for example, New York City. Developing such a roadmap requires that you know where you are currently.
You also must put your finger on the pulse of what is currently happening in your entire organization. That includes team dynamics, operational routines and systems, beliefs, and company culture. In our metaphor, this may be equal to checking your car’s condition.
Your company may be running well. Or, you may know that your business has challenges that are holding back its growth or profitability. The Fresh Eyes Assessment™ strategic organizational audit is a well-rounded analysis that reveals new paths to profits and efficiency in either of these scenarios.
It takes courage, a willingness to listen, and an innovative spirit to step back from your company and view it with fresh eyes. It is a new look at what is working well, and also at it what could be even better.
Which Areas in Your Business Need to be Part of The Analysis?
Meet the Fresh Eyes Assessment™, a proven strategic audit method developed by Top-Notch CEO. The Fresh Eyes Assessment™ creates meaningful, even transformational results. It is used to grow companies and is instrumental for company turnarounds as well.
The basis for this strategic business audit is the evaluation of eight critical aspects of your company.
The analysis considers the perspectives of team members across all levels of leadership. The method gives a well-rounded view of the company by seeking out the perspectives of
- The company’s management
- The board members
- Staff members across the entire company
- The board (if available for input)
- What is your vision and mission for the business? Can anyone remember them with what level of clarity? Is the understanding of vision and mission consistent throughout the organization? Is there a plan for making the business sustainable for the long run? If the founder is still around, has he/she the intention to create the company as a lasting legacy?
- What are the people dynamics? What is the culture? What are the beliefs driving daily activities? What levels of synergy exist? Where does conflict arise and why? How well does leadership work throughout all levels of the company?
- Is the work environment supportive of the team reaching its goals?
- What do the financial results look like? What can we learn from those data?
- How well do the operations of the company perform? What are the methodologies? What is working well and what is a good candidate for optimizing or rethinking?
- What are the practices and results of the sales and marketing team? E.g.: What market niches are being pursued? Do you have a marketing plan and could it use revision? How successful are the sales? Is every potential customer viewed as equally important? What is the process and cost of customer acquisition?
- Which systems and processes is the company using? Which areas could use systems it doesn’t have currently or which systems have become inadequate?
- What kind of training is the company offering now? Are staff members yearning for training they are not getting? Are there signs that lack of training costs the company money, even major losses in money and talent?
Getting Everyone On The Same Page with a Fresh Eyes Assessment™ – Management, Staff, and Board
A strategic audit like the Fresh Eyes Assessment™ is about
- Asking the right questions,
- Evaluating the current strategy and status quo,
- Identifying strategic risks, opportunities, and challenges, and assessing changing resource needs.
To get the best possible return-on-investment, the strategic audit’s findings must lead to the implementation of new steps.
For implementation to succeed, you need to develop a plan to which your team supports. You want your entire team to be behind the plan. The best chance you have to create that ideal scenario is by getting input from all or at least many. You want all layers and areas of the company represented.
- Establishing meaningful metrics and accountability for implementation are also crucial. Otherwise, new activities outlined in an action plan are unlikely to happen.
- Engage an external strategic auditor. Such a person has the experience and skills to speak to your people and get them to share their thoughts. This person is able to give some confidentiality to people who share something they might hesitate to speak about otherwise.
- An external strategic auditor also brings fresh eyes. No one inside of your business can have “fresh eyes”. Even you are too close to your own business and views of it. Your team members may or may not see which new opportunities are available to taken advantage of. They also may be not verbalizing what they see, think, or feel. Reasons could include:
- They don’t think their manager would appreciate their input,
- They are apathetic or feel discouraged, or
- They think that management might oppose or feel offended by their views.
- Not knowing these views hurts your business control.
- The strategic audit must involve not only the executives and board members. It is important to include team members from all departments, including those working in the “trenches”. It is impossible to get an accurate, complete picture of your current status quo without it. If you don’t know your status quo, it is like starting a road trip to a given destination without knowing from which location you are starting off.
What is the Difference Between a SWOT Analysis and a Strategic Audit?
A SWOT analysis examines the company’s strengths, weaknesses, opportunities, and threats. Generally, such SWOT analysis has a narrower focus than the eight areas evaluated by the Fresh Eyes Assessment™. Another difference is that most times SWOT analyses stem from the efforts of management alone. If the company has a board, its directors are likely to give their views on a SWOT analysis as well. It is rare that such an analysis includes feedback from other staff. That is especially true for staff who are working in the proverbial “trenches.”
That said, a strategic audit such as the Fresh Eyes Assessment™ gives management and the board plenty of insights that lead to a powerful SWOT analysis.
Will this Audit Influence our Strategy for Marketing and Sales?
The answer is “it depends”. The answer is “yes” if the audit concludes that your business has the opportunity to grow with tweaks or even an overhaul in your marketing and sales strategy. For example,
- Your niche needs to be more focused with a refined marketing message
- Your company can grow into new markets
- Your company needs to refocus its efforts in a particular niche
- Your prospective customers need to be able to find more answers to their questions online
- Your website is a “lazy slacker” instead of selling your customers/clients on what you offer on a 24/7 basis
Remember, that nowadays, especially for “considered purchases” (i.e., non-spontaneous purchases of higher ticket items or services) your clients/customers research answers to their questions online long before they ever talk to a salesperson.
Can we Pick a Strategic Subset of the Fresh Eyes Assessment™?
Yes. you can. For example, a Fresh Eyes Assessment™ of your marketing and sales strategy can make all the difference by itself. In some cases, companies choose to do a partial Fresh Eyes Assessment™, i.e., they pick a strategic area to focus on during the audit, such as sales and marketing, operations, systems, etc. Of course, the “people” aspect always comes in for any of the other audit areas.
Making the Case for a Strong ROI: The Ultimate Benefits of the Audit
What are the benefits of conducting a strategic audit such as the Fresh Eyes Assessment™ discussed here? At the end of the day, the benefits are that your business reaches and even exceeds its goals. You get there with a plan that you and your team commit to. As a result, you are achieving this new level of success with much less stress than what would be the case normally.
What is the Strategic Frequency For the Audit?
Perform a strategic audit such as a Fresh Eyes Assessment™ at least every two years. It is crucial to the success of your business. Otherwise, you are leaving money on the table. External factors such as market conditions change. Nowadays, external conditions change faster than ever.
Internal factors change, too. A strategic business audit is vital when the company is undergoing changes or a major transition.
- The company sets ambitious new growth goals.
- The company reaches hyper-growth. It’s time to beef up the company’s foundation (systems, policies, etc). This ensures the aggressive growth is sustainable instead of leading to collapse later on.
- The dependency on key people creates bottlenecks. There is uncertainty about how to replace them in the future. There is also the concern about losing critical expertise.
- The question arises on how key people can go on vacation without having to work while being away.
- The company founder is working on an exit strategy.
These examples are some of the common situations that cause company owners/ executives to look for a strategic audit.
The optimal outcome is one where the strategic analysis leads to an actionable plan. An action plan that stems from a Fresh Eyes Assessment™ is very successful. That is because it finds the support of the company’s team as a whole. Creating a plan that incorporates the feedback and input of the whole team – rather than executives alone – is an important key. The other key is the fact that the eight areas included in the Fresh Eyes Assessment™ touch all critical areas of the company.
What to Do Next About Your Strategy?