In this video we’ll talk about how to build a strategic framework. We will review what makes a good strategic objective, and how to build a plan framework so your strategic plan is actionable.
Let’s talk strategic objectives. This is the second segment in a two-part series. Here, we’ll talk about a framework, how we use strategic objectives to build a framework, also known as a strategic framework. The first segment is on defining strategic objectives, what they are, how to build them, their anatomy, and some examples. If you haven’t checked it out yet, it may be helpful to do so before this segment. If you have, let’s jump in.
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Strategic Objectives & Framework Defined
As we mentioned in the last segment, strategic objectives are your bridge between your vision, or that big future state, and your annual execution, goals, and initiatives. They are the crux of any great strategic plan. They are your strategic framework for your plan. They create that scaffolding that connects up to your vision and down to your goals and your initiatives. So, what are some of the different ways that a framework happens? But first, let’s review some criteria of what makes good strategic objectives.
Criteria for Good Strategic Objectives
- 3+ Years Vision: Strategic objectives need to be multi-year in nature–three years, five years, whatever works for you. They just need to be longer than annual. They also need to have some runway.
- Vision Bridge: They are absolutely the bridge from your vision to your annual execution.
- Less than 6 Total: In this case, less is more. If you have more than six strategic objectives, you have too many. The more you have, the bigger your plan and no one needs bigger plans. We really like to think about these handful of strategic objectives, or whatever you call them, as broad statements of where you are going. They are often articulated as little mini vision statements.
- Where, What, How: Strategic objectives again tell you “where” you are going. Then goals are the next layer down and they are the “what,” and then the “how” would be your initiatives. So that is how we think about what they do for our strategic plan.
- Top Focus: Your strategic objectives should really be your top focus. Really awesome strategic objectives are great talking points for any CEO or executive team to say, "Hey, these are the priorities. These are the objectives we’re driving for this year and beyond."
- Company-wide Direction: And let’s remember, strategic objectives are not just a mishmash of department goals. They actually are a company-wide direction.
Balanced Scorecard Strategic Framework Example
Here’s a couple examples of frameworks, or a couple of ways to think about your strategic objectives. If you want more examples, check out our white paper
. Here is one example of a framework that is a traditional balanced scorecard framework and what makes this great is it’s holistic. We like to see strategic objective frameworks that cover all aspects or perspectives of the organization:
- Financial: It’s often great to have a strategic objective that is focused on the Financial perspective—something like “Financial sustainability and consistently achieve year-over-year growth.”
- Customer/Market Growth: Following from there, it’s important to take the customer perspective. So, this strategic objective might look something like “Expanding our footprint through vertical integration.”
- Operational Excellence: The next strategic objective would be for operational excellence or looking at the internal perspective. An example may include “Transform operations to be fully digital and deliver digital services.”
- People Expertise: The fourth perspective might have a strategic objective that is focused on people expertise. An example of that might be “Become the team of the future.”
So, this again is a traditional framework, borrowing from the balanced scorecard structure. It’s holistic and it tells a strategy story. It says if we have the right people in the right seats and loving their jobs, we are able to deliver amazing operations, a great customer experience, and acquire new customers, thus generating a set of financial returns that show we’re successful. So, that’s the strategy story, bottom up in this case.
Strategic Framework by Theme Example
A different framework might be by theme. This option is similar, but a little different with strategic objectives focusing on:
- Revenue Growth: One strategic objective might focus on revenue growth or your whole growth theme.
- Profitability Improvement: Another strategic objective theme might be one focused on profitability improvement or increasing your bottom line. All of the goals and initiatives under growth would be literally under the growth strategic objective, and your top-line numbers would be for revenue. The theme then for the next strategic objective for profitability improvement is everything you’re doing to improve the bottom line or improve profitability. So you’re basically taking a theme such as the growth theme, and you’re creating a couple of strategic objectives from the Financial perspective as well as the customer or market growth perspective. And then you’re taking your margin numbers and maybe cash flow, also with strategic objectives from the Operational Excellence perspective.
- People Expertise: This strategic objective is people-specific and supports the two themes above.
So, those are two really great standard frameworks to think about when building your strategic objectives in a holistic, comprehensive manner. For non-profits and government organizations, flip-flop a couple of the strategic objectives and put Customers at the top and the Financial Results then drops to the bottom.
A couple of tips to wrap up:
- A great set of strategic objectives tell the story that you’re trying to tell about where you’re going and why. Be compelling.
- Don’t use words that you could find in anybody else’s strategic plan. Use the words that are relevant to you and the message you want to send to your team.
- And start with placeholders. We like to start with labels, build out the rest of your plan, and come back and finalize the language. That’s really helpful, and it takes the pressure off of getting it perfect.