Identifying Outcomes

Before setting specific goals, it’s essential to consider the desired outcomes, which should align with the company’s values, vision, and mission.

For instance, if you aim to enhance customer satisfaction but also prioritize lowest prices, you must evaluate whether this focus could compromise product quality and service, potentially affecting overall customer satisfaction. Consider how your goals may interact and possibly create conflicts.

Another important factor to assess before establishing goals is the duration of your sales cycle and customer return rates. For example, if you run a mortgage brokerage where clients renew their mortgages every five years, it’s crucial to secure referrals to maintain a robust sales pipeline. How will you factor this into your goal-setting process?

The Four Perspectives

Typically, your strategic plan will focus on four perspectives, similar to strategy maps used in the balanced scorecard process.

Financial

What non-tangible investments do we need to make? What results do we want to see?

Customers

What does success mean to our customers?

Internal Processes

How will we achieve our financial and customer perspectives? Typically you will focus on four major areas:

  • Operations management
  • Customer management
  • Innovation
  • Regulatory and social

Employee Learning and Growth

What non-tangible investments do we need to make? Typically you will focus on three major areas:

  • Human capital: What people do we need in place for success? What knowledge resources do we need?
  • Information capital: What information sharing and technology resources need to be in place?
  • Organizational capital: What cultural and leadership supports should be in place?

Customizing the Perspectives

These perspectives are only intended as a guideline. Various companies have also chosen to include perspectives on:

  • Operational excellence (i.e. improving processes with Six Sigma or Lean methods)
  • Cutting edge innovation
  • Quality
  • Suppliers
  • Stakeholders

Timeline for Your Plan

When it comes to strategic planning, there are different lengths of time to consider. Typically, a strategic plan looks at long term goals. In a flat organization (with few layers of management) the results can vary widely, but these plan lengths are common in many hierarchical organizations.

  • 5-10 years: Owner/CEO/board
  • 5 years: Vice president(s)
  • 2-3 years: Directors
  • 2 years: Managers
  • 1 year: Supervisor
  • 6-12 months: Front-line staff

Let’s examine the process at each level. It is the responsibility of company leadership—whether the owner, CEO, or board of directors—to establish objectives that align with the values, vision, and mission in accordance with the duration of the strategic plan, which often spans five years, though sometimes it may extend to ten years.

Leadership collaborates with senior managers (such as vice presidents or directors, depending on the organizational structure) to define objectives that support this direction. These objectives typically have a long-term focus of up to three years. Subsequently, these objectives are refined by directors and adapted to shorter timeframes that align with the strategic plan before being communicated to front-line staff and their immediate supervisors, who generally concentrate on setting goals for the coming 12 months.

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