Long-term strategic planning, vision, and execution are the hallmarks of businesses that survive and grow. Strategic objectives are one of the tools at your disposal to integrate long-term planning into every facet of your organization.
Since strategic objectives cascade down to every level of the organization, it’s also prudent to see them as a communication tool from leaders to employees responsible for execution.
In essence, good strategic objectives are clear and concise. They also encompass your company’s mission, vision, and execution plans. You should write each objective in the verb + adjective + noun (or detail) + deadline format to create an action statement.
Clarity is vital when writing strategic objectives because employees must understand the vision and direction to execute them well.
Below, we provide a deep dive into how to write strategic objectives. We also cover the different types of strategic objectives, how to choose one for your business, and tips to actualize your strategic goals.
Steps to writing good strategic objectives
Below, we’ve outlined the steps to write good strategic objectives.
Step 1: Think of your organization’s mission and vision
Every strategic plan should stem from your company’s mission and vision. Your mission describes your purpose, and your vision sheds light on what your business seeks to achieve in the long term.
Hence, every strategic objective must move the needle toward your overall purpose and future aspirations. All your plans must tether to these concepts.
Step 2: Analyze past performance and present environment
While looking towards the future, the past provides a platform to build upon. The benefit of looking at previous performance is that it helps you identify your focus areas and order of priority.
Ideally, every business should prioritize four to five core focus areas like finance, internal processes, customers, compliance, and people or organizational capacity. This way, you can emphasize goals that affect each key stakeholder group.
However, armed with previous performance, you know how urgent you must act and the kind of deadlines to impose.
Additionally, the current operational or regulatory landscape should influence the strategic goals you pursue and prioritize.
Step 3: Decide on focus areas
A focus area is a segment or department to which you want to prioritize and commit resources to within a specified timeline. Each strategic objective must target at least one focus area.
For every business, previous performance dictates the areas that need more focus.
For example, a business with a high employee attrition rate may prioritize people or organizational capacity in its strategic objectives.
Such a company may have business objectives to reinvent its hiring process from top to bottom and reevaluate its compensation.
Step 4: Determine the number of strategic objectives
There are many schools of thought on this subject. The Objectives and Key Results goal-setting methodology advocates for a maximum of seven strategic priorities. Duke Corporate Education recommends three to five strategic objectives within a 12-month period.
Whichever school you lean towards, your aim should be balance and urgency. By focusing on a few objectives, everyone knows what’s most important. Too many objectives stretch resources and can be overwhelming.
We recommend having a singular primary objective per focus area and 3-4 sub-tasks or goals. It’s okay to have more than four goals initially. If you do, determine which goals are worth pursuing by estimating the return on investment (ROI).
For example, a company with high employee attrition may adopt the following:
Objective: To recruit and retain high-performing employees
Subgoals will include:
Review and reinvent the current hiring process
Reevaluate the overall compensation policy
Developing employees for future success
Step 5: Write the strategic objectives
After settling on your focus areas and urgent needs, it’s time to write the objectives. Objectives are written in the Verb + (Adjective + Noun) + Deadline format.
The verb represents the action word like review, increase, decrease, evaluate, and more. The adjective describes the work to be done.
The noun shows the subject of the action, and the deadline puts a timeline to the strategy. A deadline is optional but should be added to sub-objectives to track progress.
Step 6: Create a strategic objectives statement
It's sensible to create an extra document that clarifies all the objectives so that employees can vividly see how they tie to the organizational strategy and their role in it.
The document will contain a 2-3 sentence explanation and potentially an execution plan on each objective.
Part of writing clear strategic objectives is that they're actionable and measurable. In that vein, you should also add measures for tracking progress.
Focus on key performance indicators everyone understands: percentage of or rate, increase or decrease in number, and increase or decrease in dollars.
What are the major types of strategic objectives?
As we’ve mentioned earlier, there are four major types of strategic objectives: financial, internal processes, customers, and people or organizational capacity.
Other examples of strategic objectives include compliance, growth, and social and environmental, all fall under one of these four categories.
Let’s discuss them in detail
Financial strategic objectives
These objectives focus on your company’s bottom line, often focusing on increasing or decreasing a key metric. Financial metrics are the ultimate metric of the success of your organizational strategy.
These objectives don’t always focus on the financial growth but also the source. For example, a brand may want to expand revenue sources, while a nonprofit may want to diversify its donor mix.
Financial objectives can also deal with the allocation of resources, like the percentage of expenses that goes into certain areas (marketing, overhead cost, etc.).
Ultimately, you want to promote efficiency, increase profit, reduce cost, and allocate resources judiciously.
Internal processes objectives
The value your company delivers to customers or stakeholders is possible through multiple internal processes. Your internal processes fall into four primary categories: customer management, innovation, regulatory and social, and operations management.
Operations management processes enable you to deliver your products or services. This encompasses layers like sourcing for raw materials, your supply chain, and product distribution into various markets.
Regulatory and social processes enable you to comply with local and international laws, standards, and requirements in all the jurisdictions where you have operations.
Innovation processes help you evolve your services and products. These processes help you create new products to reach new markets and perhaps demography.
Customer management processes involve customer selection, customer acquisition, customer satisfaction, customer retention, and deepening customer relationships with your brand.
Strategic objectives examples for internal business processes include:
Decrease production errors by 50%
Reduce budget approval time by 80%
Improve company culture to promote innovation and creativity
Customer strategic objectives
While you can classify customer objectives under internal processes, we reckon it deserves a spot on its own. After all, customers or the stakeholders you serve are the lifeblood of your business or organization.
For emphasis, customer-related objectives seek to improve loyalty, retention, and acquiring high-value customers, donors, or partners. Examples of strategic objectives for customers include:
Double community impact in all communities we serve
Reduce delivery time
Offer more cross-sale opportunities
People or organizational capacity
There are always new technologies, opportunities, challenges, and threats for businesses to contend with. Responding to these developments requires employees equipped with the right tools and knowledge.
You can create strategic objectives to provide development and growth opportunities for all your employees.
Enforce a performance-focused promotion system
Provide access to a world-class education for self-development
Provide rebates for certificate training for all employees
Growth strategic objectives
These objectives cover growing your company's market share, expanding into new markets or segments, and identifying market opportunities in primary and adjacent industries.
Growth strategic objectives could also encompass creating new products and expanding production capacity to meet growing demand.
Examples of these objectives are:
Add ten new locations to distribution hubs
Acquire a company in the ABC industry in the next 24 months
Expand into the Middle East
How do I choose the best strategic objectives for my business?
There are potentially many areas of your business to develop strategic objectives for. However, it’s wasteful allocating resources and time to multiple objectives at a time.
Asides from resource allocation, having too many strategic objectives can dilute your employee’s focus, leading to unsatisfactory results.
Hence, it’s a must to stick to only a handful of critical objectives you can currently allocate resources.
For example, you may wish to undergo digital transformation, but it is not prudent to pursue this initiative haphazardly if the right structure/team and finances are not in place.
But how do you choose the best strategic objectives for your business? Here’s how:
Think of it in terms of behavioral outcomes
As a business, some outcomes from your business’s stakeholders (employees, suppliers, volunteers, donor partners, clients, customers, and shareholders) are more likely to help you progress toward your mission and vision than others.
The Harvard Business Review calls them behavioral outcomes. What outcomes do you want for/from each group the most now? Are these outcomes pertinent to each group?
Think of it this way: successful strategic objectives should trigger action and change in a desired direction. You want every strategic objective you choose to lead to specific outcomes by major stakeholders.
We’ve talked about focus areas earlier, but one way to dig deeper into the best objectives is to think from the perspective of all key stakeholders. You should ask questions like:
What do we want our stakeholders to do?
Who do we want them to become?
The answers to these questions will help you create a pathway to achieve your desired behavioral outcomes. You’re practically outlining how to help them deliver on your preferred outcomes.
Let’s take the second question from above and assume your answer is: “To get our employees to create super innovative and secure products.”
Turn the outcomes into strategic objectives
Our outcome from our example above was: “To get our employees to create super innovative and secure products.” There are different ways to approach this.
A good strategic objective that encapsulates this outcome would be: “To increase the number of world-class developers in the IT department.”
You can hire world-class software developers and/or create a pathway or programs to raise the level of junior and intermediate software developers in the company to a higher level.
Typically most managers and execs start from the second step. While you can still generate great strategic ideas like this, identifying a key outcome provides a reference point that helps you create clear and measurable objectives.
Identify measures
The best strategic objectives are attainable and measurable. You need to identify the measures that’ll help you track progress or lack thereof. These measures are known as key performance indicators (KPIs).
The three major ways to measure results are dollar value, number of, and percentage change. Everything else is mostly noise. You want to be able to quantify and track any goal with a number. It’s much easier to interpret that way.
That’s one of the numerous things Kippy excels at. You can select the best KPI for your objective in seconds with an artificial intelligence strategy consultant.
In our example, the best KPI would be the number of top-rated software engineers you added over the tracking period. Ultimately, you’ll also have to develop an internal rubric for determining elite software engineers.
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How to achieve my strategic objectives
After shortlisting the best strategic goals that’ll produce behavioral outcomes, it’s time to focus on execution. Three factors that contribute immensely to a high execution rate are buy-in, ownership, and accountability.
Technology can help you tie all three together. Kippy has features that enable you to do all three in a single tool rather than multiple complicated spreadsheets.
But before using any tool, it’s imperative to follow the steps below:
Get the buy-in of all stakeholders
We’ve already established that the best objectives are anchored on the behavioral outcomes you want from your stakeholders. In the same vein, it’s prudent to ensure you have the buy-in of the stakeholders before rubber-stamping and cascading a goal down the hierarchy.
This means engaging the stakeholders early, providing grounds for the objectives, making expectations clear, identifying potential risks, and communicating all the way.
For example, a potential risk with seeking only world-class software engineers in the IT department is that some people may have to be laid off.
Having stakeholders’ buy-in ensures everyone is pulling in the same direction and can be transformative for execution and meeting KPIs.
Adopt a goal-setting framework
Popular goal-setting frameworks like Objective and Key Results (OKRs), balanced scorecards, and Objectives, Goals, Strategies & Measures (OGSM) can provide a system to manage your objectives.
We’ve written extensively about these frameworks, and how to choose one for your business, so we won’t belabor it any further.
However, we recommend adopting both OKR and OGSM. The former is great for short-term goals, while the latter is for long-term goals (annually or as much as 3-5 years).
The benefit of embracing the two methodologies is how they complement each other. You can use OGSM to create a long-term company strategy and use OKRs to execute and cascade the plan into achievable objectives for teams.
Companies can easily and quickly have too many OKRs. Anchoring short-term OKRs to a long-term plan ensures coordination and unison across the board.
You may also like: OGSM vs. OKR: Goal-Setting Approaches Compared
Assign ownership
Assigning ownership is central to the successful implementation of your goals and objectives. The benefits of giving primary responsibility include:
For accountability: You have a central figure to liaise with and to drive the project forward.
For motivation: To encourage people to do better.
For easy delegation: They can cascade the key results into goals/objectives and KPIs for employees and delegate tasks in their department or project team.
Choose goal owners carefully. They should ideally have a stake in the success of the objective and be able to contribute expertise, leadership, and management skills to facilitate the successful implementation of the goal.
Kippy is a great tool that can help you assign ownership and cascade objectives down to any level of the organizational hierarchy.
Set expectations
The next step is to set expectations by establishing and agreeing on KPIs with the objective owner. One of the reasons it’s imperative to agree on KPIs and targets is that the assigned owner can have input.
“Oh, I think this target is too outlandish for the next three months because of ABC. XYZ may be more attainable within the same time frame.”
This way, you avoid imposing seemingly unattainable goals on teams, which can dampen morale. There are ambitious goals, and we recommend having ambitious goals, but always listen to your team’s concerns.
Track KPIs regularly
Track KPIs often against the targets you set to see how much progress the team is making. You can easily course-correct if the project or objective is not going as planned. You can then use the information to provide feedback to the KPI owner.
The feedback you give must be actionable and full of empathy. You must seek to understand what the problem is. Do they have the resources they need? Is there a skills gap? Is the problem internal or external?
KPI tracking and feedback are baked into Kippy. You can see the KPI owner’s performance and the score for that KPI.
You can also provide direct feedback to the owner from Kippy without having to set up time-consuming meetings, except when necessary.
Always review for relevance
Some objectives may seem relevant today but become redundant tomorrow due to new opportunities, risks, or unexpected threats. The reality is that the business world is fast-paced, and things change in an instant.
It’s imperative to be flexible enough to drop or adopt new objectives as the situation develops.
Leverage technology
Tools like Kippy help you "align every metric, person, and activity to your organization's most important objectives." You can put strategy at the core of every action your organization takes.
Features like live dashboards, cascading objectives, KPIs, artificial intelligence strategy consultant, and data analysis make your life easier by helping you do all we mentioned above and more.
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Takeaway: Learn how to write clear, succinct, and understandable strategic objectives for a better business outcome
One of the reasons strategic plans fail is because employees do not understand the strategy.
Writing clear and straight-to-the-point objectives and preparing strategy documents that explain these objectives is super helpful.
You should also write each objective in the verb + adjective + noun (or detail) + deadline format to create an action statement. That’s after you must have decided your focus areas and behavioral outcomes you seek for each stakeholder.
The keys to successful strategy execution are ownership, accountability, and continuous tracking, all of which technology can aid and fast-track.
Do you need help assigning ownership, cascading objectives, and tracking the performance of your organization’s strategic plans? Book a demo today and see how Kippy can help.