Facing challenges in strategy execution? Audit your strategy implementation to detect improvement points and gain actionable insights with a comprehensive checklist.
Why Audit Strategy?
Like any audit, a strategy audit provides a review of the strategy-related processes and behavior patterns established within an organization to assess how complete and effective they are. Here are some benefits of a strategy audit:
- Continuous improvement – implementing best practices and detecting inefficiencies.
- Similar to a financial audit – a strategy audit objectively assesses the implementation of strategy and provides early warning signals to the board of directors.
- Implied in governance standards – see governance-related standards like International Standards for the Professional Practice of Internal Auditing (IAA) 2110 and ISO 37000.
How did strategy auditing change in 2024?
- A general trend over the last few years has been that the business landscape is becoming more complex, partly due to new regulations focusing on sustainability reporting, risk management, and the increasing role of stakeholders.
- AI-related technologies are also playing a role, for example, as tools for horizon scanning and compliance analysis.
These trends translate into additional requirements for the strategy and functional scorecards, which we track using the checklist below.
Checklist for Strategy Audit
Below is the checklist we use for auditing the strategic planning and implementation process within an organization.
We also offer independent strategy audits through our consulting services.
1. Strategy Definition
Team involvement (according to involvement levels):
- 1.1. Define the roles of the strategy owner
- 1.2. Define the roles of the strategy contributor
- 1.3. Define the strategy awareness criteria
Strategic analysis:
- 1.4. Verify that stakeholders are identified
- 1.5. Ensure regular analysis of external factors and their alignment with strategy scorecards
- 1.6. Ensure regularity and alignment of competitive analysis
- 1.7. Check that formal risk management is in place via a centralized risk register or risks aligned with objectives
- 1.8. Ensure governance and compliance controls are implemented
2. Strategy Description – Overall Strategy
For the high-level strategy:
- 2.1. Define strategy attributes (mission, vision, values)
- 2.2. Define high-level strategy (preferably via K&N Strategy Map format)
- 2.3. Cascade high-level strategy into sub-strategies via strategy scorecards
3. Strategy Description – Strategy Scorecards
For each strategy scorecard:
- 3.1. Decompose high-level goals
- 3.2. Align goals with stakeholders
- 3.3. Define the cause-and-effect logic between goals
- 3.4. Assign ownership of the goals
- 3.5. Quantify goals with KPIs
- 3.6. Define action plans in the context of goals
- 3.7. Define risks for the goals or align them with the risk register
See the decomposition of goals in strategic planning for more details.
4. Strategy Description – KPIs
For performance indicators:
- 4.1. Define measurement methods
- 4.2. Set measurement scale (baseline, target)
- 4.3. Establish normalization methodology (performance function)
- 4.4. Determine relevant importance (weight)
- 4.5. Track historical and current data over time
- 4.6. Utilize leading and lagging indicators
See the full guide to KPIs for more details.
5. Strategy Office
For strategy oversight:
- 5.1. Ensure use of consistent strategy-related terminology
- 5.2. Establish standards for strategy description and mechanisms to control them
- 5.3. Maintain a single source of truth for the strategy
- 5.4. Implement mechanisms for strategy communication (reports, internal dashboards, view-only access)
- 5.5. Establish mechanisms for strategy review and discussion (regularity, commenting, approval)
- 5.6. Maintain an audit trail (record of strategy-related changes)
- 5.7. Ensure AI readiness (tracking strategy data in a format usable for AI analysis)
Strategy Audit – Presentation Slides
Frequently Asked Questions (FAQs)
What is the scope of the strategy audit?
The audit covers the mission, vision, stakeholder alignment, risk management, KPIs, and the cascading of strategic goals across the organization.
Are Balanced Scorecard audit and Strategy Audit the same?
A typical strategy implementation process includes the Balanced Scorecard framework as part of it. In this sense, a strategy audit has a broader scope.
What are the goals of the audit?
The goals depend on the complexity of your strategy. For example, a simple audit might aim to improve alignment between objectives and resources, while a complex audit could focus on governance standards, risk management, and performance monitoring.
What is the timeline for the strategy audit process?
It depends on the complexity of the audited strategy. For example, a comprehensive strategy audit, including all stages conducted by our experts, typically takes about 20 hours.
Who should be involved in the audit?
Key stakeholders, strategy office representatives, department leaders, and data owners should be involved to ensure comprehensive insights. Additionally, external consultants can facilitate the audit process.
What documentation or data is required?
Strategy maps are needed to evaluate goal alignment. KPIs and risk registers are used for other assessments. The company typically involves all relevant documentation in the audit, including spreadsheets, strategic plans, and any automation software they use for strategy management.
How can the audit findings be reported?
Findings can be presented in a detailed report or executive summary, depending on the organization’s needs. Even for internal audits, it is a good practice to document the findings in a formal report to ensure clarity and provide a reference for future audits.
How will success be measured?
Short-term success can be measured by stakeholder satisfaction, while long-term outcomes can be evaluated through improved alignment, faster decision-making, reduced rework, and better strategic awareness.
Alexis is a Senior Strategy Consultant and CEO at BSC Designer, with over 20 years of experience in strategic planning. Alexis developed the “5 Step Strategy Implementation System” that helps companies with the practical implementation of their strategies. He is a regular speaker at industry conferences and has published over 100 articles on strategy and performance management, including the book “10 Step KPI System”. His work is frequently cited in academic research.