Published on 03/01/2017
Most strategic and operational plans ignore the definition of strategic objectives. Many “objectives” are nothing more than an assortment of task lists submitted by various executives and managers. Someone compiles these lists, puts them into a three-ring binder, and attempts to update them on a monthly or quarterly basis.
Generally, the task lists originate from a well-orchestrated and energetic planning retreat, during which the management team agreed on the company’s major initiatives. This leads us to fall into the trap of believing that our lists actually have benefit.
They don’t. So how do we write objectives that actually support execution best practices?
First: Follow the Definition
The definition of strategic objectives is simple. A strategic objective is a business need that can be defined in quantifiable and measurable terms. That means when writing strategic objectives, they need to be phrased in a way that answers two simple questions:
How much? By when?
To write a powerful, precise, and most importantly ACTIONABLE objective, the business need must be bound by both a baseline and a target (how much?), as well as time (by when?). We must know the level of improvement required and how much time we have to achieve the established targets. If either of these elements are missing, the strategy becomes less actionable, and execution will likely suffer.
Impactful Strategic Objectives are Measurable Strategic Objectives
Baselines and targets provide current performance and desired future performance. Time provides an of how aggressive the strategy needs to be. If you can’t establish baseline or target numbers, it’s a sign that your objectives are really strategies or tactics. These objectives fail to adhere to the true definition of strategic objectives.
Implementing strategies and tactics without knowing how to measure success is a recipe for failure. Your goal is to execute on an action plan designed to achieve quantifiable, measurable outcomes by a specific due date. However, be aware of accidentally turning your objectives into strategies. An objective is an outcome measure, not the measure of a process designed to achieve the outcome.
Examples of Strategic Objectives
For an objective to be quantifiable, it must reflect an amount of something. Strategic and operational planning most often uses time, dollars, percentages, and numerical counts. Some examples:
- Time: Decrease the time required to produce a product or provide a service. For instance, a mortgage company might want to reduce the time required to process a loan. A residential construction company might want to reduce the time required to frame a house. A hospital might want to reduce the time an E.R. patient spends waiting to see a physician. This is the most common metric used to meet the definition of strategic objectives.
- Dollars: Decrease the cost of producing a product or service, or increase the revenue generated by delivering a product or service. For instance, a mortgage company might want to decrease its loan processing costs. A construction company might want to increase the average margin on new home construction. A hospital might want to decrease average supply costs per E.R. patient.
- Percentages: Decrease or increase the rate of a process, activity, or desired outcome. Using our previous examples, the mortgage company might want to increase its market share percentage for total loans closed. The construction company may want to decrease the percent of lumber rejected for failing to meet its internal specification requirements. The hospital might want to increase the percent of E.R. patients who pay their deductibles at the point of service.
- Numerical Counts: Decrease or increase the physical count of something. The mortgage company might want to increase the number of loans processed. The construction company might want to decrease the number of homes that don’t pass first inspection. The hospital might want to increase the number of E.R. patients.
There are many other units of measure. You could use length (inches or feet), mass (pounds), volume (gallon), temperature (degrees), area (square feet), heat (BTU), and pressure (pounds per square inch). Each of these can quantify and measure an objective.
If you’re looking for a better way to track your strategic plan, including, of course, your strategic objectives, sign up for a demo of the AchieveIt Execution Insight Platform today.
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