In an ever-changing business world, having strategic goals and a plan to guide organizational efforts is critical. However, developing strategic goals can be a difficult task. How do you determine which objectives are critical to your business? Which are actionable and quantifiable? Which objectives should be prioritized?
Here's a breakdown of what strategic planning is, what strategic goals are, and how to choose organizational goals to pursue to help you answer these questions.
What Does Strategic Planning Mean?
Strategic planning refers to the ongoing process within an organization where existing knowledge is utilized to outline the intended direction of a business.
Its goal is to prioritize efforts, effectively allocate resources, align shareholders and employees, and ensure that organizational goals are supported by data and logical reasoning.
According to research published in the Harvard Business Review, it is important to avoid becoming rigidly bound to a strategic plan and forgetting that strategy inherently involves risks and discomfort. A good strategic plan is adaptable and adjusts as opportunities and threats arise.
Harvard Business School Professor Clayton Christensen, in the online course Disruptive Strategy, emphasizes that strategy should not be viewed as a one-time event. Instead, it is an ongoing process that responds to unforeseen opportunities and threats. Success in strategy often emerges from this continuous process, which operates around the clock in almost every industry.
Qualities Of Strategic Goals
In order to create a strategic plan for your organization, it is essential to establish the objectives you aim to achieve. Strategic goals represent measurable targets that reflect the long-term vision of an organization. When setting these goals for your organization, it is important to consider the following four qualities.
1Purpose-Driven
The initial step in formulating strategic goals is to identify your company's purpose and values. What are your aspirations, and why is it significant to establish these objectives? Allow the answers to these questions to guide the development of your organization's strategic goals.
According to HBS Professor Rebecca Henderson, who specializes in reshaping capitalism for a fair and sustainable world, "You don't have to abandon your values when you enter the workplace" Henderson also emphasizes that leading with purpose can enhance business performance.
"If you genuinely and effectively adopt a purpose, it will not harm your performance," Henderson explains in a Facebook Live lecture. "By connecting your purpose to the company's strategic vision in a manner that aligns and motivates people in the right direction, you have the potential to outperform your competitors"
2Long-Term and Future-Oriented
While strategic objectives represent the long-range ambitions of your organization, operational objectives are the daily targets that must be achieved to fulfill them. When establishing strategic objectives, consider your company's values and long-term vision, and make sure you don't confuse strategic and operational goals.
For example, your organization may have the goal of developing a new marketing strategy; however, this is an operational objective that serves a long-term vision. In this case, could be to enter a new market segment, to which the creation of a new marketing strategy would contribute.
Maintain a forward-looking perspective to ensure that you set challenging objectives that can have a lasting impact on your organization.
3Feasible
Strong strategic objectives are not only long-term and future-oriented, but they are also feasible. If there are no operational objectives that your team can accomplish to achieve the strategic objective, it would be more beneficial for your organization to invest time and resources elsewhere.
When formulating strategic objectives, consider the operational objectives that fall within them. Are they actionable steps that your team can take to achieve your organization's goal? If so, the objective could be a worthwhile pursuit for your business.
4Measurable
When crafting strategic objectives, it is crucial to define how progress and success will be measured. For instance, the objective "become a household name" is valid but vague. Take into account the intended timeframe for achieving this objective and how you will operationally define "a household name" Consider the data collection methods as well.
A more appropriate revision to the original objective could be: "Increase brand recognition by 80 percent among surveyed Americans by 2030" By setting a more specific objective, you can better equip your organization to achieve it and ensure that employees and stakeholders have a clear understanding of success and how it will be measured.
Prioritizing Strategic Goals
When determining which strategic goals to focus on, it is important to assess their value. This process can be time-consuming, especially if decision-makers have different priorities and opinions.
To begin, it is crucial to ensure that everyone understands the purpose behind each strategic goal. This aligns with Henderson's view that when employees are united in their understanding of purpose, it can lead to superior performance compared to competitors.
Next, evaluate the anticipated return on investment (ROI) for the operational goals associated with each strategic objective. For instance, if the strategic goal is to achieve carbon-neutral status by 2030, it is necessary to break it down into actionable sub-tasks like determining the company's annual CO2 emissions and creating a marketing and public relations strategy.
Calculate the expected cost and return for each of these sub-tasks.
The ROI formula is typically expressed as
ROI = (Net Profit / Cost of Investment) x 100
In project management, the formula may use slightly different terms
ROI = [(Financial Value - Project Cost) / Project Cost] x 100
Estimating the ROI can provide valuable information when deciding which goals to pursue. While not all strategic goals need to yield a high return on investment, it is beneficial to calculate the anticipated ROI for each objective to make comparisons.
Lastly, when prioritizing strategic goals, it is essential to consider current events and their potential impact on the timeliness of each goal. Factors such as the COVID-19 pandemic and the escalating climate change crisis have influenced the strategic goals of many organizations in recent years. Goals that are relevant and urgent often receive higher priority.
Setting Future goals
Remember that your strategy should always evolve as you set and prioritize strategic goals. As circumstances and challenges change, so must your organization's strategy.
You can set strategic goals worth striving for if you lead with a purpose, a measurable and actionable vision, and an awareness of current events.
In conclusion,
Setting goals for strategic planning involves several key considerations. Strategic planning is an ongoing process that outlines the intended direction of a business and involves adapting to changing opportunities and threats.
When setting strategic goals, it is important to consider their qualities, such as being purpose-driven, long-term and future-oriented, feasible, and measurable.
Purpose-driven goals align with your company's values and can enhance business performance when connected to the strategic vision.
Long-term and future-oriented goals reflect the aspirations of your organization, while operational objectives are the daily targets that contribute to achieving them. It's crucial to differentiate between strategic and operational goals to ensure clarity.
Feasible goals are ones that your team can accomplish through actionable steps. Consider the operational objectives that fall within the strategic goals to ensure they are achievable.
Additionally, goals should be measurable, with defined metrics and a clear understanding of what success looks like. Specificity enables better tracking and evaluation of progress.
Prioritizing strategic goals involves understanding the purpose behind each goal and evaluating the anticipated return on investment (ROI) for associated operational goals. Calculating the ROI helps make informed decisions by comparing the expected cost and return for each goal. Considering current events and their potential impact on the timeliness of goals is also crucial for effective prioritization.
Finally, it's important to remember that strategic goals should evolve as circumstances and challenges change. Leading with purpose, a measurable and actionable vision, and an awareness of current events will help you set meaningful and adaptable goals for your organization's strategic planning.
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