»Out job is not to predict the future but to prepare for it.«
— Pericles
How to Improve Performance over Time?
Managing performance over time is about as valid a definition as there can be for the task of strategic management. A strategic plan has to show how performance will develop over time if a range of actions are taken within the planning horizon.
Strategic decision making poses three elementary questions:
- Why has our business performance followed the trajectory we observe for the past?
- Where will we go from here if we do business as usual?
- How can we improve our performance in the future?
(More precisely: What will we need to do when and to what extent?)
Understanding past performance is an important part of business analysis. Only with a valid and thorough explanation can we attempt to reliably predict future performance developments. Quantitative modeling prevents us from simply following anecdotal evidence – it puts just the right amount of science to the craft.