Strategic Planning: 4 Mistakes When Setting Priorities, Goals, and Objectives
This is the second article in a six-part series on how to approach the Strategic Planning Process for your organization.
One of the common reasons that companies fail to meet their goals and accomplish their vision is that they haven’t communicated effectively about what success looks like. In some cases, they measure their goals in the wrong manner — focusing on activities instead of outcomes. In other cases, they fail to establish concrete measures that contribute to company success.
In my prior article, I detailed the 5 Essential Elements of Strategic Planning. As a recap:
- Your Company Vision creates a clear picture of where your company is headed.
- Strategic Priorities determine how you will focus the business in order to accomplish your vision.
- Company Goals specify the outcomes you expect your Strategic Priorities to achieve.
- Objectives are the efforts driving the execution of your Strategy.
- Key Initiatives are the critically important tasks that require increased attention to stay on track in the interest of accomplishing your Objectives.
In this article, we’ll walk back through some common mistakes that occur when setting Strategic Priorities and Company Goals.
Mistake #1: Not Making a Distinction Between Strategic Priorities and Growth Metrics
Companies sometimes set priorities that specify an outcome or growth metric, rather than a strategic approach. For example, suppose that your company set the Strategic Priority to “Achieve $20M in ARR” or “Reach 4M Students.” While these outcomes are important and set clear expectations for what growth should look like, they do little to help align your company on the clear path to success. Strategic Priorities are intended to clarify and focus your team on how you want them to approach their work.
The problem with establishing a Strategic Priority such as “Achieve $20M in ARR” is that your team doesn’t have much clarity on what they should do… aside from increasing ARR (Annual Recurring Revenue). Your Strategic Priorities should tell your team how—specifically—you want them to grow the business. Your teams may have differing ideas about what to do to reach the ARR goal you’ve established, and, despite their well-intended efforts, your teams might end up running in different directions… with many of them headed in the wrong direction. Strategic Priorities point them in the right direction.
Consider pairing your growth metrics ($20MM in ARR) with the specific approach you want the team to take. An example of a stronger, actionable Strategic Priority might be:
Achieve $20M in ARR by focusing on increasing the revenue from existing customers.
Notice the key phrase: “...by focusing on…” This tells your team how you want them to focus their energy. Once you’ve set the focus with this Strategic Priority, you can establish goals that clarify the desired outcomes (e.g., $3.0M of expansion revenue or $2.0M of revenue tied to cross-selling). From there, the team can create the specific Objectives necessary to reach these goals.
Remember: Our job as leaders is not only to set expectations for the growth of the business but also to provide the strategic focus to align the team on the path most likely to lead to success.
Mistake #2: Setting Squishy “Themes” Instead of Measurable Strategic Priorities
When Strategic Priorities lack specificity and tangible outcomes, they often become frustrating time-sinks. Broadly worded priorities focused on collaboration, company culture, or innovation are often problematic because companies don’t establish a concrete definition of what success looks like. In many cases, these priorities end up being nothing more than feel-good “themes” that are difficult to measure and even harder to drive alignment around.
To be fair… the examples listed above are critically important for a business. However, because there aren’t standard business metrics to measure things like collaboration, culture, and innovation, companies have a hard time defining what success looks like and setting objective measures.
Driven by the desire to “check the box” on addressing collaboration, culture or innovation, executive leaders sometimes balk at setting company-level metrics and leave it to the department-level leaders to figure out what to do and how to measure it. Not surprisingly, these vague strategic themes rarely lead to meaningful results.
Strategic Priorities will feel hollow and meaningless unless they are tied to specific, measurable Company Goals that the organization is expecting to achieve. Don’t be afraid to question why you’ve identified something as a Strategic Priority and reflect on whether it is crucial to achieving your Company Vision.
Remember: when setting your Priorities and Goals, be intentional about how you want the company to engage, be specific about what kind of evidence will validate success, and be deliberate about the Objectives that will drive the necessary results.
Mistake #3: Setting Deadline-based Goals Instead of Outcomes-based Goals
When setting the metrics for Company Goals and Objectives, leadership teams sometimes slip into the habit of measuring “task completion” rather than measuring the outcome of the work. Deadlines are important. But they are just a means to an end. A few examples of deadline-based goals:
- “Launch New Product by Oct. 1” — Although there’s a lot riding on that new product launch, does the act of simply getting a product out the door on a specific date result in the business impact required? Instead, consider measuring the success of the product launch by the number of standards addressed, the percent of content meeting state-adoption criteria, or the number of schools agreeing to pilot the program. Certainly, time parameters are important for a product launch, but if the scope of the product launched doesn’t meet the needs of the business, have you accomplished the objective?
- “Roll Out Sales Enablement Program by June 1” — The timing of sales enablement programs is critically important, especially when intended to support a new product launch. However, the process of building training modules, creating competitor battlecards, and developing a new pitch deck isn’t the true measure of success. (Nor is the act of uploading these resources into the sales enablement platform). Throwing the materials over the wall to Sales does not equal success. Instead, consider measuring the number of sales reps to complete the training modules, the number of downloads of the resources, or the percentage of sales reps demonstrating proficiency and confidence regarding the new product. This drives your sales enablement team to create the right resources, by a specific date, and ensures that they partner cross-functionally so that the tools have the desired impact.
- “Develop New Customer Onboarding Process by July 1” — Simply developing a process won’t yield meaningful results. What matters most is how the process impacts customers. Instead, consider measuring the number of customers completing that onboarding process, or better yet, measure the customer satisfaction ratings or the customer retention numbers for those customers who have completed the new onboarding process vs. those who haven’t.
Remember: Simply completing a task doesn’t mean that it will have the impact required. Before establishing your Company Goals or setting Objectives, be clear about the business outcomes you want to achieve, and focus your team on making those results happen — not simply the tasks necessary to get there.
Mistake #4: Failing to Set Targets When Benchmark Data Doesn't Exist
When your Strategic Priorities involve establishing a brand-new process or system, teams are often skittish about putting a goal on paper. This is a fair concern. Absent any prior historical data, the team doesn’t want to be held accountable for a target number that was based on intuition and estimation, rather than historical data. However, having no specific goal or target whatsoever is not an appropriate solution.
In these situations, consider setting a target metric that is “meaningful and attainable.” Explain to the team that they are not going to be penalized for missing this goal (nor rewarded for exceeding it). However, the Company should set a target for what it expects to be able to achieve. Otherwise, the Objective might not receive the appropriate level of attention.
If this Objective was important enough to be part of your strategic plan, it’s important enough to be measured. The key concept to keep in mind is the “meaningful and attainable goal.” Meaningful, in that, if the company achieves the target, it will move the business forward in a significant way. Attainable, in that the target is something that is neither a stretch goal nor a slam dunk — it’s a number that the team feels relatively confident they can reach.
Remember: Setting a meaningful and attainable goal for first-year processes and systems will help ensure the business moves forward, and it provides the team with a sense of focus and accomplishment when the target is reached.
Making your Strategic Plan actionable requires you to focus your team on a set of Strategic Priorities and to establish concrete, meaningful measures of success that will move the business forward. With these pieces in place, your team will be well-aligned on the actions required and focused on driving the outcomes necessary for the business.