Choosing Your Strategic Objectives
There is often confusion over what precisely a strategic objective is and how it differs from a goal. Erica Olsen sets the record straight in this Whiteboard session: Strategic objectives are like mini vision statements for different areas of your organization that set the framework for the rest of the strategic plan. This step forms a bridge from overall strategy to the specific organizational goals. Strategic objectives differ from goals in that strategic objectives are broad, 3-5 statements whereas goals are specific 1-3 year objectives.
For more resources on building your strategic plan, view the Essentials Guide to Strategic Planning.
“Hi. My name is Erica Olsen. Today’s whiteboard session is on Strategic Objectives. We’re using the word strategic objective, but you can use the word strategic priority, plank, platform, cornerstone, goal, it doesn’t really matter. What we’re really talking about today is putting together three to five year, that’s important, broad reaching statements. Okay, that’s the point. Three to five year broad reaching statement. The difference between a strategic objective, three to five year, versus a goal, one to three year. A strategic objectives are broad, and goals are specific. Or, in other words, we’re talking about architecting, being the architect of the strategy, not the brick layer of the building. Setting goals is brick laying. We’re talking about architecting and frankly architecting can be kind of hard. The other way to think about this is these mini little vision statements for different areas in your organization.
Let’s look at what am I taking about. This right here is a strategy map. It’s a great framework to help you think about your organization holistically. Now, this was developed by Caplin & Nortin, the guys from Harvard. We’re not going to get into all the details on strategy maps but what I want you to take away from this is you can develop great strategic objectives when you think about your organization in four very specific areas or perspectives. The first area is the people area. The people area, we’re always focusing on getting the right people in the right seats, doing the right thing in your organization. A great strategic objective in this area is such as develop our workforce. There is a verb, it’s broad reaching, it doesn’t have something that’s time specific and it’s not measurable, pretty generic in nature. The next perspective is looking at your internal processes, it’s also called operational. Let’s not confuse that with the operations department if you have one, we’re talking about processes. A pretty great strategic objective is enhancing operational efficiency.
The next perspective is looking at our customers. What are we trying to do as it relates to looking at growth normally, and market serving several markets and developing value. A pretty standard strategic objective in this area is growing our market share. And lastly, we always have a financial strategic objective or perspective to look at. In this case, I just have to improve our profitability. You may be working on revenue growth, whatever is important to you.
Let’s look at how all of this comes together. It tells a story of your strategy back to that architect idea. If we’re trying to improve our profitability, how do we do that? Well, we do that through growing our market share, and how do we grow our market share? By enhancing our operational efficiency. Now by enhancing our operational efficiency we’re also going to be more profitable, correct? Or how do we enhance our operational efficiency, we need to develop our workforce. Let’s go the other direction for a moment. We need to develop our workforce in order to enhance our operational efficiency, and we need to enhance our operational efficiency because we need to grow our market share. The reason we want to grow our market share is to improve our profitability.
In closing, my tip for you is if this feels like it’s too hard to get your arms around, perhaps this are too nebulous. You might think about just doing your goal three to five years, excuse me, one to three year, and then coming back around and see where your big themes are, and putting those three to five year strategic objectives in place.”