Every so often, I encounter questions about whether an objective is a good one. Over the past 30 years, I’ve watched many hundreds of objectives set, and most of them completed. I’ve seen some have great positive effects on companies and a few that turned into disasters. As a result, here are a few things I can tell you about which objectives make the most sense in your strategic planning.
1. Strategic planning objectives should be truly STRATEGIC.
This seems like a no-brainer, but it isn’t for many. Too often I’ve seen companies attempt to set objectives that look more like operational management by objective than strategic objectives. For example, objectives like “improve profit by 10%” and “lower admin costs” CAN be strategic, but usually aren’t. The best test of whether something is strategic is a three-question test.
- Does it change who we are selling to?
- Does it change what we are selling?
- Does it change how we beat or avoid competition?
You must get a “yes” on at one of these questions for the objective to be strategic.
2. Good strategic planning objectives cross departmental boundaries.
Sometimes we come up with objectives to fix issues in a specific part of the company. My first question about these is “Why can’t the department head fix this?”. If it’s simply a question of time or money, we may want to look at how those resources are prioritized. The best objectives to address such problems though, often cross boundaries into other parts of the company. This is because it’s a good practice to assume your managers can do a good job optimizing within their area of authority.
When you do this, however, problems can arise in between those areas. Good strategic objectives often address the interaction between, for example, sales and operations. This is because the managers in each area may be doing a fine job in their departments, but an issue arises from poor co-ordination of their management. Remember, the sales VP is probably trying to maximize sales while the operations person is likely trying to maximize efficiency and quality. When these priorities conflict, improving the process for resolution can be a great strategic objective.
3. Objectives should improve the capability of the organization.
Organizational capability is a core driver of competitiveness and productivity. Hence, improving such an ability tends to improve your ability to grow, survive and profit as a company. In many cases, these abilities don’t get operational attention because they aren’t urgent.
4. The best objectives drive a better ability to capture the value of your Strategic Competency.
A Strategic Competency is the truly unique way you create great value for customers. Moreover, It is really a key strategic concept. I can’t think of a company that has seen a five or tenfold improvement in profit without using it. Any objective that enhances this or improves your ability to capitalize on that value is likely to pay off in a huge way over a long period of time.
5. Good objectives should be SMART objectives.
SMART objectives are Specific, Measurable, Achievable, Results that are Time-bound.
6. Good objectives make an actual difference.
In conclusion, if I can look at your company a year from now and see the difference made by the objective, it’s much better than an objective that can be completed while basically making no changes in any part of your company. Most of all, strategic progress is about productive change, and that never happens when everything stays the same.
What objectives have you struggled with – and how did you choose to prioritize the objectives you actually work on? If you’d like to learn more about setting and reaching the best objectives, Simplified Strategic Planning is a great place to start. For great ideas on how to improve the quality of your planning, contact me at firstname.lastname@example.org. Consider holding a one-day workshop on Simplified Strategic Planning.
Dana Baldwin is Senior Strategist with the Center for Simplified Strategic Planning, Inc. He can be reached by email at email@example.com.
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