Strategic goals have three main purposes:
- Ensure Company-wide Focus on the Few Strategic Things that Matter
- Hold People Accountable to Performance Targets that move the company forward
- Evaluate Variances – Understand Why We Are Hitting the Mark or Coming up Short
These three straightforward aims seem get to lost in many organizations when they come to revisit or finalize goals for board approval. The critical few engorge to the multitude of many.
If your company is nearing this time or planning point there are three pitfalls to avoid and I recommend you check your organization against these to avoid starting off with a less than crystal clear plan.
Pitfall 1: Assume Strategic Goals Must Be Long-term:
A culprit that needs resetting for the benefit of your organization is that strategic goals need be described as long-term. Over the years when I’ve asked a CEO or leadership team to define strategy they unusually answer “strategic goals must be long-term.”
What is long-term anyway?
- 10 years?
- 20 years?
- 3 years?
- 5 years?
- 1 year?
A strategic goal need not be long-term (whatever your definition of long is).
Strategic goals are born out of the dynamics of the industry, competition, substitutes, technology and the macro forces in the world in which we live. They represent your choices based on the nature of your industry balanced against the purposes and path the leadership of your company determines and what is realistic.
It’s true that many goals are long-term – greater than a 12-month effort – because the nature of turning an organization around, or achieving major shifts in resources takes time, or developing a new product requires a set cycle to design and launch – but the reason for long-term is the nature of the products, markets, and capabilities required against the backdrop of the industry you reside in.
The other danger of associating strategic goals with long-term is that it creates a false sense of NON-URGENCY in the company. If you look at GOOGLE, ALIBABA, UBER, FACEBOOK or AMAZON right now – they have strategic goals being accomplished in days and months, not years. Primarily because technology, customer feedback and expectation cycles have shortened to such a level that it’s impossible to say what their strategy aims are in 5 or 10 years.
It’s not that they don’t have longer-term missions – part vision part market – but they are responding to what’s working now.
The simple takeaway is – strategy goals should not be assumed as long-term only – there are reasons behind the distance that a company looks out and the goals it sets – not clarifying this handcuffs your organization.
PITFALL 2: Ending Up with Too Many Strategic Goals
Many, many CEOs and leaders have recognized less is more. It might sound interesting to have eight strategic goals – but the reality is the company, its leaders, and its employees – not to mention its board just get lost in that many and resources get apportioned too thinly.
There should be no more than 3 Strategic Goals per fiscal year.
This means if you have more than three – even if they are “good ones” you should really re-examine your strategy and ask:
By eliminating too many goals – you will find many of those mission-critical initiatives in your implementation portfolio eliminated and scarce resources that were stretched thin are now purposefully assigned to projects that matter.
Pitfall 3: Strategic Goals are Not Relatable by ALL Employees
If you want to engage your workforce – ensure the goals are meaningful to all your employees no matter what the pay grade. Too often CEOs and leadership teams set goals that cut a divide between them. For example, one company I saw set their goals as:
While the intent may resonate to the board, leadership team and Wall Street analysts how can the average manager and leader see themselves and their jobs in those goals, be motivated and or drive behavior on a daily basic to achieve them.
Goals like the above alienate the very workforce you are seeking to engage.
Strategic goals need to be set in straightforward language that all employees can see themselves contributing to – or so that it can be explained how they fit in. If you don’t have goals that people understand you should reset and communicate them differently. Your employees will thank you.
Avoid these three pitfalls to ensure your company has crystal clear and focused start strategic goals.
No Replies to "3 Pitfalls to Avoid as You Set Strategic Goals"