Alright, let's cut through the corporate fog and get real about strategic objectives.
No more jargon, no more buzzwords – just a straightforward chat about steering the ship in the right direction.
Ever felt lost in the sea of business plans and lofty goals?
Yeah, me too.
But here's the kicker: strategic objectives are your North Star, the guiding light in the chaos of the business world.
Think of them as your game plan, your secret sauce for success.
Now, I won't bore you with textbook definitions.
We're diving into the nitty-gritty of why strategic objectives matter and how they can be the game-changer your business needs.
So, grab a seat, and let's navigate this strategic jungle together.
No fluff, no fuss – just the real deal on strategic objectives.
What is a Strategic Objective?
A Strategic objective is a high-level statement that outputs what exactly you would like to achieve, with a stated deadline. In other words, it is something that can be perceivably achieved. Your strategic objectives should be attached and contribute to achieving at least one of your Strategic Focus Areas.
Strategic Objectives advance the long-term outcomes identified in the Business Strategic Plan and more specific performance goals and indicators support them. Every company needs to set strategic objectives. Strategic objectives form the backbone of a strategic operating plan for the coming year. Strategic objectives can be specific to financial growth, market position, product expansion, or any one of several factors. You should identify no more than eight strategic objectives, and they need to address three specific questions:
1. Where is the business world today?
Answering this question needs a firm grasp of internal operations. Analyzing the current state of the company needs to be clear and objective, with a realistic and critical examination of operations.
2. Where does my business need to go?
These are the top-level objectives, defined by the company’s mission and vision. These are the mission statement, values, techniques, and goals. Where should my business be in five years or ten years? Where should we focus on to maintain a competitive advantage and promote growth?
3. How to achieve that point?
Once the top-level objectives have been defined, the next step is to identify those strategic objectives to achieve the top-level objectives. These are the specific objectives that relate to financial resources, market position, personnel, equipment, etc.
The business experts offer numerous ways to define these strategic objectives. Probably, the easiest way to assess the achievability of your strategic objectives is to apply the acronym SMART for each objective.
What are the characteristics of a “SMART” objective?
Business experts say that each objective should be: Specific, Measurable, Achievable, Relevant, and Time-related. We will examine what each of these characteristics means and how they contribute to the overall strategy of the business.
When an objective is specific, it is well-defined about what has to be achieved to accomplish the goal. Goals can provide a general direction, but strategic objectives require specific metrics that provide milestones of achievement. For example, “increasing sales” is too general, but “increasing sales by 25 percent” is more specific and provides a marker for success.
All strategic objectives need to deliver measurable results. At the end of the planning cycle, it should be possible to decide whether we achieve strategic objectives or not. To do that, there should be some form of metric that can measure how well the objective’s results contribute to the success of the business.
An objective can only be strategic if you have the means to achieve it. The resources of the organization must be sufficient to carry out the objective. If the company can’t devote both the capital and people to execute the steps of an action plan which shows a roadmap of the steps that are necessary to achieve the objective, then it doesn’t meet the needs of being achievable. Every strategic objective should be achievable through direct action. For example, a strategic objective such as “reducing the economic impacts on sales” is not necessarily achievable and unfortunately, it is not actionable because you have no direct impact on the economy. However, a strategic objective such as “increase sales by 15 percent” is achievable.
Is the objective appropriate and necessary to carry out the strategies of the organization? If not, it is not relevant to the goals of the organization and likely should be dropped in favor of an objective that will further the organization’s strategies.
Every objective should have a time for action and dates for completion. Without the guidance and pressure of these time-related factors, actions will often be postponed and neglected. The efficacy of the objective will be compromised and the strategies of the organization hindered. These are not the outcomes desired when the organization started strategic planning and should be avoided whenever possible.
If the objective fails to meet one or more of these criteria, then you should assess it to determine if it is truly strategic or revise it to make it more specific, measurable, achievable, relevant, and time-related.
How to Write a Good Strategic Objective?
1. Select objectives based on your strategy, not your industry.
Just because you are in the same industry, it doesn’t mean that you have the same strategic plan. So, you may not have the same objectives as others in your industry. You should select objectives that are consistent with your strategic plan.
2. Consider all perspectives when setting a strategic objective
Business experts say that there are main four perspectives to set a strategic objective. These are financial, customer, internal processes, and people. Your strategic objectives shouldn’t fall into just one of those perspectives. Instead, we should distribute among the four.
3. Follow the “Verb+ Adjective+ Noun” Format
The typical format of a strategic objective is “Verb + adjective+ Noun.” If you use this format, your strategic objectives will create an action statement as we mentioned from the beginning. Your strategic objectives should describe your strategy – not just a typical strategy.
4. Create “Strategic Objective Statements” that clarify the goal.
Usually, a three-to-five-word strategic objective is not enough information for those who are not in the meeting when we decide on the objective. So, you should write the objective statements - no more than 3-4 sentences for each- that make clear the objective’s goal and meaning.
Guidelines for Setting Strategic Objectives
- You should not have more than 8 objectives in your strategy.
- Objectives should link together as a group in a logical way. You should be sure that all of your objectives work together in a way that reflects your strategy.
- Every objective must have at least one verb and a noun.
- Make sure that you are not including projects as objectives.
Benefits of Setting Strategic Objectives
- Setting strategic objectives allows organizations to be proactive rather than reactive.
- Creating a sense of direction for the organization.
- Increase operational efficiency.
- It helps to increase market share and profitability.
- It can make a business durable and sustainable.
Mastering Strategy: 11 Practical Examples of Strategic Objectives
Strategic objectives serve as the roadmap for an organization's success. Explore these 11 practical key steps, along with a Bonus Point, to gain insights into crafting effective strategic objectives, incorporating both conventional wisdom and innovative approaches.
1. Clarify the Vision:
- Insight: A clear vision drives strategic direction.
- Solution: Define a compelling vision statement that succinctly communicates the organization's long-term aspirations. This sets the tone for strategic objectives.
2. Customer-Centric Focus:
- Insight: Customer satisfaction is a cornerstone of success.
- Solution: Develop strategic objectives centered around enhancing customer experience, such as improving service quality or introducing customer loyalty programs.
3. Employee Engagement Goals:
- Insight: Engaged employees drive organizational success.
- Solution: Set objectives to improve employee satisfaction, foster professional development, or enhance workplace culture. Engaged employees are more motivated; hence they become key contributors to strategic success.
4. Innovation and Adaptability:
- Insight: Adaptability is crucial in a dynamic environment.
- Solution: Establish objectives that promote a culture of innovation, encouraging employees to contribute new ideas and adapt to changing market trends.
5. Operational Efficiency Targets:
- Insight: Streamlined operations enhance overall performance.
- Solution: Craft objectives focused on optimizing processes, reducing costs, and improving overall operational efficiency. This contributes to the organization's competitiveness.
6. Market Expansion Initiatives:
- Insight: Growth is a fundamental strategic goal.
- Solution: Develop objectives related to market expansion, whether through geographic growth, diversification of product lines, or entering new customer segments.
7. Digital Transformation Objectives:
- Insight: Embrace technology for long-term competitiveness.
- Solution: Define objectives that drive digital transformation, such as implementing new technologies, enhancing online presence, or leveraging data analytics for informed decision-making.
8. Sustainability and Corporate Responsibility:
- Insight: Social and environmental responsibility is a strategic imperative.
- Solution: Set objectives related to sustainability, corporate social responsibility, and ethical business practices. This aligns the organization with modern values.
9. Strategic Partnerships and Alliances:
- Insight: Collaboration enhances capabilities.
- Solution: Establish objectives to forge strategic partnerships, joint ventures, or alliances. Collaborative efforts can amplify the organization's impact and capabilities.
10. Talent Acquisition and Development:
- Insight: A skilled workforce is a strategic asset.
- Solution: Craft objectives focused on attracting top talent, developing employee skills, and fostering a learning culture. This ensures the organization remains agile and competitive.
11. Agile and Responsive Objectives:
- Insight: Adaptability is key in a rapidly changing landscape.
- Solution: Develop objectives that emphasize organizational agility and responsiveness to unforeseen challenges. This includes rapid decision-making and flexible resource allocation.
Bonus Point: "Game-Changing Moonshot Goals"
- Insight: Ambitious goals inspire innovation.
- Solution: Include a 'moonshot' objective – an audacious, game-changing goal that challenges the status quo. This stimulates creativity and pushes the organization to reach new heights.
Crafting strategic objectives involves a balance of traditional and forward-thinking approaches. By incorporating these practical steps and embracing innovative goals, organizations can navigate the complexities of strategic planning with confidence and vision.