Session 11 - Strategic Objectives

The strategic planning tire meets the road when you develop 6-8 strategic objectives to pursue in the coming years.

You have come a long way in your planning process and are nearing the finish line.  In the last session you identified 5-7 critical issues facing your company.  In this session you will develop specific, measurable strategic objectives to pursue in the coming years which address these critical issues.  Most authors refer to these as "long-term objectives," as I did for many years.  Eventually, I came to realize that for most companies, especially those doing their first strategic plan, one-third or more of the objectives were short-term, i.e. 6-18 months.  That did not make them any less strategic; it just made them shorter than long-term objectives with timeframes of 3-5 years or more.  Hence, my adoption of strategic objectives.

Strategic objectives typically, though not always (see above), have multi-year timeframes for their achievement and are multi-functional, i.e. they require concerted efforts by people from many different parts of your company.

Strategic objectives (SO's) begin with such words as "to have," "to be," "to become," or "to achieve" and end with a specific year by which the SO will be met.

Developing Your Strategic Objectives

You develop your strategic with reference solely to the critical issues you identified in the last session.  Begin with the highest priority critical issue and discuss ways to address it.  When your ideas begin to gel, write an SO in the above format.  Make them positive in concept and wording.  Focus on the achievement to come, not on the shortcoming or problem in the present.

Since you might draft two or three SO's for each critical issue, you can easily end up with 15-25 potential SO's.  Once again, you must prioritize them and choose 6-8 SO's to drive the future development of your company.  This discussion and prioritization process is markedly similar to the one you used in settling on your critical issues, so I advise following that technique.

When you have competed this prioritization, you may well find that one or more of the critical issues has no associated strategic objective.  Don't worry!  If you have followed the process well, then the 6-8 SO's you chose are the best ones.  Resist with a passion the temptation to add more SO's so that all critical issues are addressed, which can easily balloon the SO's to a dozen or more.  There is no quicker way to kill the vitality of a strategic plan than this!  The only way for SO's to be special and to serve as focal points for your company's development is to have few of them.  Otherwise, efforts are diluted, and achievements are diminished.

As a final step, George Morrisey suggests validating your SO's against four criteria:

    1.  Is it measurable or verifiable?
    2.  Is it achievable or feasible?
    3.  Is it flexible or adaptable?
    4.  Is it consistent with the rest of your strategic plan.

To this list I would add the following:

    5.  Does it stretch your people without breaking them?
    6.  Is it clear, easy to understand, and inviting to achieve?

Examples of Strategic Objectives

To give you some sense of what strategic objectives look like for real companies, the following have been drawn from my clients over the past several years, grouped by type of SO rather than by client.  Each SO ended with a date phrase such as "by 2001."  These dates have been dropped here.  You can assume a short-term sounding SO had a date for achievement soon after the completion of the plan.  Indeed, sometimes an SO was achieved before the strategic plan was formally adopted and disseminated!

Growth
Achieve $1 billion in annual revenues with $60 million in profits.
Maintain a net profit rate equal to or better than the best world class companies in our industry.
Have investment policies and fiscal procedures to foster aggressive growth and profitability.
Have a comprehensive business development plan.
Have 6 projects in 3 countries.

Management
Have a management team capable of meeting our strategic objectives.
Have a complete management team.

Safety
Have an injury free workforce.

Administrative
Have standardized cost management and financial systems.
Have standard operating procedures.

Employees
Have a comprehensive career development program.
Achieve an employee turnover rate less than 5%.
Define and communicate organizational roles, responsibilities, and expectations for all employees.

Natural resources
Produce coal on our lands.

Physical plant
Have all digital equipment.
Have a replacement equipment financing plan.
Have a technology development and implementation plan.

Quality
Complete the ISO 9000 certification of all projects.
Achieve zero errors and omissions claims.
Achieve compliance with federal, state and local environmental mandates.
  
Your Homework - Draft Your Strategic Objectives

For those who are sketching a strategic plan through these sessions, your homework is to develop 6-8 specific, measurable strategic objectives from your critical issues.  Use the prioritization process from the last session.

Click here to obtain our prompt, free critique of your strategic objectives.  All submittals will be treated with complete confidentiality.

Go to the full set of strategic planning sessions in this series.

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