One of the issues that comes up in the second session of the Simplified Strategic Planning process is whether your objectives are “strategic enough”. Strictly speaking, objectives are only strategic if they have a significant impact on what you sell, how you sell it, or how you beat or avoid competition. A set of well-executed, truly strategic objectives will definitely move your organization in the direction you envision in your strategies. We encounter several kinds of objectives, however, which are not strategic – and in some cases, end up wasting the precious management resources of an organization.
The first type of non-strategic objective is the incremental objective. It can usually be spotted by watching for objectives that are simply expressed as an increase in a key metric. While increasing your most important metrics – especially those which measure your achievement
of goals on page 6.2 – setting an objective that is simply an increase in one of those metrics has two problems. First, it can generate a lot of very non-strategic (and even counter-strategic) activity to hit the objective, and secondly, it can be very hard to write a good action plan for. A much more useful approach to this, especially if you are repeatedly failing to hit a key metric, is to set an objective to remedy this issue in a specific, strategic way, such as introducing a new product/service or changing processes. This will assure that hitting the objective will have a significant impact on one of the three strategic factors – what you sell, to whom you sell, or how you beat competition.
In my next post, I’ll discuss the second type of non-strategic objective – the accounting-driven objective.