Strategic goals are the objectives that you want to accomplish in the next three to five years. They are the bridge between your vision and your action plan. They help you align your team, allocate your resources, and measure your progress.
But how do you set strategic goals that are not only ambitious, but also realistic, specific, and relevant? How do you avoid ending up with a list of vague and generic statements that don’t inspire or guide anyone?
In this blog post, I will share with you a simple and effective method to identify the right strategic goals for your business, based on an article by Graham Kenny in Harvard Business Review. The method consists of three steps:
1. Identify your key stakeholders
The first step is to identify who are the most important groups or individuals that have a stake in your business. These are the people who can affect or be affected by your actions, decisions, and performance. They can be internal (such as employees, managers, shareholders) or external (such as customers, suppliers, regulators, competitors, community).
You can use a stakeholder map to list and categorize your key stakeholders according to their level of interest and influence on your business. For example, you can use a matrix like this one:
Source: HBS Online
The stakeholder map will help you prioritize your stakeholders and focus on those who are most critical for your success.
2. Define what you want from each stakeholder
The second step is to define what you want to get from each key stakeholder group or individual. This is where you articulate your expectations, aspirations, and desired outcomes for each relationship.
For example, you may want to get:
- Loyalty and satisfaction from your customers
- Engagement and retention from your employees
- Profitability and growth from your shareholders
- Quality and reliability from your suppliers
- Compliance and trust from your regulators
- Reputation and impact from your community
You can use a table like this one to summarize what you want from each stakeholder:
| Stakeholder | What I want |
|---|---|
| Customers | Loyalty and satisfaction |
| Employees | Engagement and retention |
| Shareholders | Profitability and growth |
| Suppliers | Quality and reliability |
| Regulators | Compliance and trust |
| Community | Reputation and impact |
3. Translate what you want into strategic goals
The third step is to translate what you want from each stakeholder into strategic goals. These are the specific and measurable objectives that will help you achieve what you want.
For example, you may translate what you want from each stakeholder into strategic goals like this:
| Stakeholder | What I want | Strategic goal |
|---|---|---|
| Customers | Loyalty and satisfaction | Increase customer retention rate by 10% by 2026 |
| Employees | Engagement and retention | Reduce employee turnover rate by 15% by 2026 |
| Shareholders | Profitability and growth | Increase return on equity by 20% by 2026 |
| Suppliers | Quality and reliability | Reduce defect rate by 25% by 2026 |
| Regulators | Compliance and trust | Achieve zero violations of regulations by 2026 |
| Community | Reputation and impact | Donate 5% of profits to social causes by 2026 |
You can use the SMART criteria to make sure your strategic goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
By following these three steps, you will end up with a list of strategic goals that are clear, meaningful, and aligned with your vision. You will also have a better understanding of who are your key stakeholders and what they expect from you.
Now that you have set your strategic goals, the next step is to create an action plan to achieve them. You will need to break down your strategic goals into smaller and shorter-term objectives, assign responsibilities and resources, monitor progress and performance, and adjust as needed.
Setting strategic goals is not a one-time event; it is an ongoing process that requires constant review and refinement. But by using this method, you will have a solid foundation for creating a successful strategy for your business.
