Strategic objectives link to and breathe life into your vision and mission statements. Each one sets an expectation for achieving a high-level, long-term goal, most often relating to finances, growth and maintaining a competitive edge. Specificity and measurability are vital, because without them, strategic objectives are far less useful. Rather than setting an unspecific strategic objective, a clear, quantifiable objective affords opportunities to create metrics that not only measure progress, but that also motivate and inspire your employees.
Create SMART Strategic Objectives
Measuring progress with strategic objectives requires that they be specific, measurable, actionable, realistic and time-bound. Narrowly defined objectives state what you need to accomplish. Measurability refers both to quantifiable metrics and measurement methods. Every strategic objective must be achievable through direct action. Although challenging objectives help your business grow, they must also be doable. Deadlines are critical to prevent strategic objectives from becoming open-ended. As an example, a SMART strategic objective might be to “improve customer satisfaction survey scores by 15 percent within six months.”
Develop Measurement Metrics
Specific metrics will vary depending on the type and purpose of a strategic objective. Despite this, following best practice recommendations can help you create effective standards of measurement. Quantifiable metrics most often include percentage and ratio calculations such as percentage of sales increase, inventory reorder ratios, churn rates -- the number of customers who discontinue a service during a specified time -- or employee turnover ratios. They can also be simple measurements such as a count of customer complaints.
Measure progress over time instead of waiting until the end of a measurement period to determine whether you’ve successfully achieved a strategic goal. Break the goal into milestones that include both deadline dates and appropriate benchmark metrics. You might set monthly deadline dates and percentage benchmark metrics that start at 2 percent and increase each month for an objective such as “increase sales by 15 percent within six months.” Regular measurements can also serve as a motivational influence.
Create Progress Reports
Prepare and display or distribute ongoing progress reports that coincide with milestone dates and measurements. A simple spreadsheet that lists each strategic objective separately is all that’s really necessary. Create column labels that describe each objective and the target measurement, and list each milestone reporting date. Record benchmark results in the appropriate row, and indicate whether you’re on target, behind or ahead of the benchmark expectation using different colors, such as black, red and green.
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