conscientiously stripped of distortions such as employee stock option accounting (or lack of it), aggressive pension assumptions, and off-balance sheet manipulations.

The Economic Profit/Economic Value Added (EP) approach can help in this regard, and it will become increasingly common as a performance evaluation template.

If a company's Net Operating Profit After Tax is not consistently returning an excess over its cost of capital, it is dissipating, not creating, wealth and is a candidate for strategic renewal.

However, if technical aspects of cost of capital, capital weighting, time effects, projections, assumptions, and static versus dynamic assessments are intimidating, the well-known Altman Z-Score Formula, "The Bankruptcy Predictor," is an excellent, comprehensive, and easily applied tool for this purpose (see Exhibit I).1 Its benchmarks are well understood. Scores under a certain level almost certainly indicate imminent or short-term bankruptcy. Scores tilting towards these levels represent

a call for action. As an indicator of the need for strategic renewal, this quantitative tool stimulates constructive corporate action looking at score level and trend. Action plans can be strategic or tactical, but they would focus on producing positive movement of the factors in the formula, which, in the absence of a formal strategic measurement framework, would constitute a temporary surrogate for strategic improvement. Organizations can apply a formal Strategic Renewal Checklist when they need more qualitative information to support the quantitative information during their strategic renewal process. The abbreviated example in Exhibit 2 should be expanded to include questions that address Finance, Information Systems, Human Resources, and other key stakeholders.

There are many excellent approaches available for strategy formulation, calibration, or updating. However, any comprehensive and consistent model will assess the current and future strategic landscape, identify critical success factors, set strategic goals, uncover critical business issues and plan actions

to implement strategic thrusts and achieve strategic objectives. In doing so, corporate strategy will concisely answer the 13 key questions."

1. What values are going to guide our business?

2. How far down the road are we going to look?

3. What assumptions about the external environment (regulations, the economy, resource availability, technology, competition, the market, etc.) underpin our strategy?

4. What existing and new products and services will we be offering (and not offering)?

5. What criteria will we use to evaluate a new product or service opportunity?

6. What existing and new customer groups will we be serving (and not serving)?

7. What criteria will we use to evaluate a new market opportunity?

8. What factors (price and/or the various dimensions of quality, service, etc.) are meaningful to our customers?