The independent Strategy Audit experiences a revival

The strategy audit has been popular in the ‘70s and ‘80s of the last century. Especially banks asked for in depth assessment of the strategy of their (potential) client in order to determine the long term benefits of investing in that firm. After a period of relative silence, we see a revival of the Strategy Audit. Major reasons are the uncertainties caused by the financial crisis and – more fundamental – increased complexity and fundamental uncertainty that are associated with modern strategies.

What are the typical questions in a Strategy Audit?

A Strategy Audit is often asked when one or more of the following questions arise:

• Is the proposed strategy viable and well founded on facts?
• Is the strategy sustainable, both from a competitive and a social perspective?
• Does the business model fully exploit the modern opportunities in technology, cooperation and customer interaction?
• What are the major risks that may disturb the outcomes?
• Is the company able to execute the strategy properly and meet its financial liabilities?
  

What’s new in the modern Strategy Audit?

Compared to the traditional Strategy Audit, we see some additional needs that are included in the modern Strategy Audit. First, the perspectives to assess a firm’s strategy have been broadened over the past few years, based on the increased attention for sustainability, social responsibility and stakeholder value. Second, our clients have increased awareness of uncertainty and risks. Therefore the modern Strategy Audit puts more emphasis on (strategic) risks, real options, effects of negative scenario’s, and plans for risk mitigation. Third, assessment of market structure oriented strategies has been included, given their prominent role in modern strategies. Finally, the audit includes an assessment of the execution power, based on the experience in many firms that even excellent strategies may fail due to poor execution.

The NNC Strategy Audit

Over the years, NNC has developed an effective method to conduct a Strategy Audit, meeting the requirements of our clients. One of the key characteristics is that we start with a high level assessment that reveals the critical areas. In the next steps, most of the efforts are focused on these areas that determine the validity of the specific strategy.

Download the Strategy Audit brochure