Welcome to the third in the series of weekly articles working through the Intrafocus 7-Step Strategic Planning Process.
What are strategic objectives?
We created three strategic priorities in the previous stage, which grouped the most critical outputs from our workshop exercises. The next step is to break these strategic priorities down further to create workable items that your management team can take forwards.
Key features of strategic objectives:
- Strategic objectives are invariably continuous improvement activities
- Each can usually be assigned to one of four categories; financial, customer, internal processes and organisational capacity.
- An individual will own each objective.
- Each objective will have a ‘doing’ verb attached to it – such as ‘increasing’, ‘improving’, or ‘reducing’ – reflecting the dynamic nature of each objective.
- They are not projects – these come later.
How do we develop strategic objectives?
Again, we recommend holding a workshop to focus on two back-to-back exercises. You’ll need one business executive, three or four senior managers and a subject matter expert. Get that coffee on and get those ideas flowing!
In the workshop, you’ll take 2-3 hours to brainstorm possible strategic objectives, grouping them under the four categories above. Here are some examples:
- Financial – grow company profit in the current financial year or strip out wasteful operating costs.
- Customer – improve customer satisfaction scores or build customer retention
- Internal processes – work towards zero carbon operation and boost fleet efficiency.
- Organisational capacity – deliver new customer service training programme to frontline staff, invest in strategic partnerships or new technology.
The latter category is the most significant investment area and spans knowledge, people and organisational infrastructure.
Brainstorming within the team
In your workshop, brainstorm possible strategic objectives, considering that each must contribute to at least one strategic priority. This litmus test proves it will genuinely support the overall strategy. don’t forget the question, what are strategic objectives?
Each person should write down one or two objectives that they believe will help to improve the organisation. At first, these tend to be too broad to be actionable – such as ‘slash customer cost to serve’ or ‘grow profits’, but as you focus on each, you can drill down to more controllable, specific objectives. For example, you might invest in new customer self-serve technology that cuts costs and improves customer satisfaction.
Don’t worry about precision at this stage – that will come later. Instead, think about whether;
Each possible objective will contribute towards the organisational vision and purpose, and how,
- It is controllable (essential for delivery)
- It is truly one thing rather than a grouped series of objectives, and
- It is genuinely important.
To help answer the questions, you can ask whether each proposed objective is:
- Directly contributing to the previously defined vision and purpose
- Genuinely important and able to make a difference
- A singular objective
- Controllable so that your efforts can influence the result (at least to an acceptable degree)
You can move on if your identified objectives answer more or all of the above checklist questions. If they don’t, then refine them. Aim for ‘halfway’ there at this stage; your set shouldn’t be perfect, but it should be well on the way.
At this stage, we recommend looking at each objective and its causal objectives. We cover this in more detail in our free strategy workbook.
An Intrafocus consultant can also facilitate this stage, which involves establishing how each possible strategic objective sits within the four original categories of financial, customer, internal processes and organisational capacity. You’ll want 3-4 in each layer. By adding causal relationship arrows, you can create a strategy map. This shows how lower-layer activities can combine to drive a desired outcome in the upper layer. This exercise is simple and intuitive, but the result is a highly compelling strategic story that maps your necessary investment to the desired financial outcome.
A warning note
Businesses often use phrases such as ‘best in class’, ‘world-leading’, ‘optimised’ and ‘best practice’, which are very hard to measure and vague. In our experience, objectives using this type of jargon fall short of clearly articulated and results-oriented objectives. Use words that are common and easy to understand by everyone in the organisation.
Also, note that we don’t need to add targets at this stage – that falls within the next step!
So, in stage three, we work to
- Check that identified objectives are objectives – rather than tasks, projects or activities.
- Defined in results-oriented language that all can understand.
If you’re happy with your work, then it’s time to move ahead to step four. If not, and you’ve spotted shortcomings in your work so far, then loop back. This investment in time will reap more robust rewards later down the line.
Once you’re happy, add the final strategic objectives to your Strategic Plan Summary and your objectives and results to the Strategic Plan Template. It’s time to move on to stage 4: measures!
The help you need
Remember that the Intrafocus team is here to help you with all stages of your strategic development using our proven Intrafocus Seven-Step Strategic Planning Process. Don’t hesitate to contact us to find out more.