In our introductory article, we presented the Intrafocus Strategic Planning Process (SPP), which has been endorsed by the CPD Certification Service. The seven-step methodology is designed to help organisations of all sizes and kinds to develop their strategy with ease.
As you will see from the high-level introduction to the accredited Strategic Planning Process, each stage flows seamlessly to the next, and links activities in a holistic and meaningful way. Firstly, we looked at setting vision, purpose and priorities. Now, let’s turn our attention to objective setting and KPIs / targets, and review some of the key points.
Once strategic priorities are in place, they need to be broken down and translated into actionable items, or objectives. These are assigned to named individuals and designed to be continuous improvement activities, grouped (typically) under customer, internal process, financial and organisational capacity categories.
When setting objectives, it is necessary to take a top-down approach (vision, purpose and priorities) and a ground-up approach, incorporating the expertise, insights and skills of your employees.
One of the biggest challenges lies in setting ‘true’ objectives, that actually contribute to strategic goals, and which the business can control. They must have the ‘SMART’ formula applied and must inter-relate and offer value when grouped together.
Again, the handy Post-It method works a treat here, and the ‘rule of three’ applies once again. Our process will guide you through this with an effective organisation framework that identifies possible objectives, correctly categorises them and creates relationships between them. It also provides the tools that you need to ‘test’ your objectives and determine whether they are truly strategic objectives – or projects, tactics or operational tasks.
Our goal point with this activity is to end up with a set of strategic improvement objectives that are grouped, clear, action-oriented and measurable.
Key Performance Indicators (KPIs) are a fundamental of all businesses, and we discuss them regularly – particularly as they are quite tricky to correctly define! Our acid-check for confirming a ‘true’ KPI is to ask:
- Does it measure the attainment of a strategic objective?
- Can it be counted and compared (to evidence attainment of that objective within the timescale.)
KPIs are always tangible measures. Think conversions, sales, leads, stock control ratios, creditor days and so forth. Although most KPIs are lagging (easier to measure), leading KPIs are important too. Leading KPIs measure actions that take the business towards success.
Setting KPIs is the first step of this stage. One defined they must be:
- Ranked by priority
- Assigned to owners. (It is vital that each KPI belongs to one named individual who is responsible for its delivery. Otherwise, the work will never get done!)
- Given a threshold limit which will be used to flag up acceptable and unacceptable results (essential when tracking KPI progress using the Red, Amber, Green reporting system, for example.)
Making it easy
These two steps; defining objectives and setting KPIs can be time-consuming and challenging. Common errors occur such as:
- Setting objectives which aren’t intrinsically linked to strategic intent, and which dilute the focus of work
- Choosing too many KPIs which are impossible to track (or attempting to track everything within the business)
- confusing KPIs with operational tactics
- assigning KPIs to departments and teams, rather than named individuals – and risking them falling entirely by the wayside as a result.
In the next article, we will look at how businesses should handle strategic projects and strategy communication and the role of automation.
Making the process easy
With the certified Intrafocus Strategic Planning Process, we guide your business decision-makers through the process from start to finish. Our Strategic Planning Workbook contains everything that you need to host your internal workshop at each stage of the process. It includes a presentation, templates and helpful prompts and tools for each step of the process.
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Our team of strategy consultants are also on hand to support your business and facilitate your workshops. With years of industry experience, our professionals can add real value to the process; expertly guiding your decision-makers, adding insight and context at each stage and working on a flexible basis around your needs.
Contact us about a strategy workshop for a no-obligation discussion about how we might help your business to take its strategy success forward today.