Background
“Strategy is the allocation of resources toward activities that lead to a desired outcome” (https://ventrek.com/latest-news/what-is-entrepreneurial-strategy/). “Resources” are time, money and people. “Desired Outcome” is your company’s 5-Year Mission (https://ventrek.com/latest-news/an-entrepreneurs-guide-to-creating-a-5-year-mission-statement/). Now we get to part of the answer on what “activities” are in this definition.
The Entrepreneurial Strategy Methodology
To effectively build a strategy within the entrepreneurial environment, it is critical to follow Ventrek’s proven methodology. This was outlined in an earlier post (https://ventrek.com/latest-news/strengthening-your-entreprenerial-company-the-strategy-factor/) and explained the four key components of building a powerful strategy: analysis, crafting, implementing and monitoring. A key part of “crafting” is the development of strategic objectives.
What Are Strategic Objectives?
To achieve our desired outcome (5-year mission) and build a great company, we must set out milestones to gauge progress. These milestones are called “strategic objectives” and are built at both the 3-year and 1-year level. Strategic objectives are big initiatives for the company as a whole and will take significant time and effort to achieve and general fall into two categories: company strengthening or mission realizing. Regardless, they harness the resources of the company and provide direction, clarity on priorities and accountability. Without them, it would be incredibly difficult to measure progress toward your 5-Year Mission and you would spend too much time in BAU and not enough time on strategy (https://ventrek.com/latest-news/entrepreneurial-strategy-business-as-usual-activities-vs-strategic-activities/). Here are the “rules”….
- Only about ~5 for both the one- and three-year-time frames
- Assigned to one person only who champions the objective and ensures it moves forward
- Seven words in length with a strong verb and a why/what statement to be truly effective
- One-year objectives are reviewed each quarter (on track, off track)
- Three-year objectives are refreshed annually (rolling objectives)
Here are a few really good examples…
Example 1: Create a National Sales Team Delivering an Amazing Customer Experience. To achieve our growth targets as a company, our sales team must grow and expand. Our Sales Team must provide customers with a business transactional experience that makes them comfortable and confident in our ability and intent to meet and exceed their expectations. We believe that through frequent sales team training, individual team member coaching, customer satisfaction surveys and our expanded field representation, our sales team will be equipped to deliver world class customer service while achieving our revenue targets.
Example 2: Document Critical Processes and Have Them Followed By All. When our processes are clear and consistently followed, everyone’s job becomes easier to do and we will increase the value of our business. We will use the Ventrek Process Documenter tool to document processes for the entire business. Our goal is to create consistent, repeatable processes that everyone follows while ensuring simplicity – this will NOT be complicated! We will ensure that all staff are trained and equipped to follow these processes.
Example 3: Diversification of Services – Spreading our Wings. We want to grow and expand our company and one way to achieve this is through service diversification and increase client wallet share. We will strategically identify new markets to pursue prospective clients and projects. We will be strategic and only pursue those opportunities that are a fit for ABC Inc. Our pursuit begins with the evaluation of the market to determine the ROI, and the current and potential operational needs required. Once the market is determined as viable, we will develop products, services and innovative ideas required to enter the new market. The overall result will create diversified revenue streams and leave ABC Inc. less reliant on tradition markets.
When reading through these, notice a few things critical to building solid strategic objectives. First, they utilize strong verbs so we know when we are “done” with the objective. Second, they are written in clear language and avoid “MBA-speak” (or even “ChatGPT speak”!). Third, they explain why this objective is important and an idea of what has to happen to achieve the objective.
How to Create Strategic Objectives
It’s impossible to create strategic objectives without a 5-Year Mission first in place. You need a goal and your mission is that mountain you are willing to climb, For 3-year objectives, you must ask: “what do we need to do to achieve our 5-Year Mission while strengthening the company?” Now, take out some post its and, with your leadership team, brainstorm answers to the following questions (try to be specific and only one thought per post it)…
- What needs to happen for us to achieve our 5-Year Mission?
- Look back at your analysis (hits, misses, start, stop, keep, strengths weaknesses, opportunities, threats) – what needs to be done to address these?
- How is our financial house? What needs to be addressed in finance and accounting?
- How is our operations? What needs to happen to address any concerns?
- How is our administration? What needs to happen to address any concerns?
Once you have a brainstormed list of possible objectives, spend time grouping them and prioritizing them. You should ideally arrive at about 5 or so at the 3-year timeframe. Once you have agreed on them, ensure you assign a champion to each and then describe the essence of the objective in 7 words or less, use 1-2 sentences to describe WHY we are pursuing this objective and use 1-2 sentences to describe (high level) HOW we will achieve this objective.
Once you have finalized your 3-year objectives it’s time to move to your 1-year objectives. Each of our 1-year objectives must tie into our 3-year objectives and support them. We seek a coherent strategy – 1-year objectives should complement 3-year objectives. Review the 3-Year Objectives – what do we need to do this year to move the objective forward? Once you’ve settled on about 5 1-year objectives, repeat the process of assigning a champion to each and then describe the essence of the objective in 7 words or less, use 1-2 sentences to describe WHY we are pursuing this objective and use 1-2 sentences to describe (high level) HOW we will achieve this objective.
Next Steps
Once you have your strategic objectives established, it is critical you build quarterly priorities (rocks) for each objective, KPIs and also effectively implement the plan. We will cover each of these in future blog posts.