How to Successfully Set Strategic Goals
Crafting strategic goals is a daunting task. When you create goals, decide which ones are vital to your company, which ones are actionable and measurable and which ones to prioritize.
Here’s what strategic planning is, what characterizes strategic goals, and how to select organizational goals to pursue.
What is Strategic Planning?
Strategic planning is an organizational process that uses available knowledge to document a business’s intended direction.
It is used to prioritize efforts, allocate resources and align shareholders and employees.
To stay competitive, you need a flexible business strategy to change as the market and technology do.
Most people think of business strategy as a one-time event, but that’s not how the world works. You can’t just pull a plan out of a hat when you need it.
It’s better to think of strategies as something that develops through a process that’s at work 24/7 in almost every industry.
Characteristics of Strategic Goals
A strategic plot is a valuable tool that organizations use to reach their long-term vision.
To craft a strategic plan, you first need to set measurable objectives. These are objectives that are indicative of your organization’s vision.
When you are setting goals, here are four characteristics to keep in mind.
What is your company’s purpose? What are your values? These are the foundational questions for your company’s strategic goals because they will guide the objectives’ development. The responses to these questions can show the outcome of your organization’s objectives.
Purpose-led companies offer more than just quality products and services. They can engage their employees and customers, create strong loyalty, and experience positive business growth.
When setting strategic goals, you must think of your company’s values and long-term vision. Strategic goals are your organization’s objectives.
Operational goals are the regular milestones that need to be reached to achieve those. Confusing strategic and operational goals is a common mistake.
Strategic goals should be set with the future in mind. For example, if your company is considering increasing profits, the operational goal of “identifying new markets” isn’t great as it’s not very specific.
Keep a vision forward as you progress toward your goals. A strong idea will ensure your objectives are challenging and can have a lasting impact on your organization.
Goals have to be specific and measurable to be effective. If there are no short-term, operational steps that your team can take to achieve the strategic objective, then it’s not worth pursuing.
When formulating strategic goals, consider the operational goals that fall under them. If those goals are actionable steps your team can take to achieve your organization’s objective, those goals are worthwhile endeavours for your business.
For your strategic goals, you must include measurable objectives. It’s good to say that you want to become a household name, but it doesn’t tell you what you need to do to get there.
How will you define it?
What metrics will you use to track your progress?
If you set a time limit to reach your goals, how will you measure your data?
A more specific, actionable revision could be: “Increase brand recognition by 50 percent among surveyed customers by 2025.”
By defining a more specific goal, businesses can more easily measure success and ensure that all employees and shareholders are aligned with the company mission.
Prioritizing Strategic Goals
With a list of strategic goals in hand, prioritize them, which can be a long, complex process, especially if other people on your team have different priorities and opinions.
Before setting any goals, make sure everyone understands the purpose behind each strategic goal. That is key for an organization to set itself apart from competitors.
1. Calculate Anticipated ROI
Next, you can figure out the estimated return on investment of your strategic objectives.
The formula to determine ROI is usually computed as:
ROI = (Net Profit / Investment Cost) x 100
Making an estimate gives you a sense of what to focus on to reach your goal. Although not all plans have the same return on investment, it can help calculate each goal’s anticipated ROI so you can compare their expected value.
2. Consider Current Events
Lastly, be mindful of current events when deciding which strategic goal to prioritize. What’s happening in the world that could influence the relevance of each objective?
For instance, the deadly coronavirus (COVID-19) pandemic and the ever-intensifying climate change crisis have impacted and changed many companies’ priorities. Only pressing goals in such cases are prioritized.
When crafting goals for the future, it’s important to remember that your business strategy should constantly evolve.
To set strategic goals worth striving for, you should have a measurable and actionable vision, a purpose, and an awareness of what’s happening in the industry.