HOW TO SET STRATEGIC PLANNING GOALS

By Catherine Cote (HBR)

In an ever-changing business world, it’s imperative to have strategic goals and a plan to guide
organizational efforts. Yet, crafting strategic goals can be a daunting task. How do you decide
which goals are vital to your company? Which ones are actionable and measurable? Which goals
to prioritize?

To help you answer these questions, here’s a breakdown of what strategic planning is, what
characterizes strategic goals, and how to select organizational goals to pursue.

WHAT IS STRATEGIC PLANNING?

Strategic planning is the ongoing organizational process of using available knowledge to

document a business's intended direction. This process is used to prioritize efforts, effectively
allocate resources, align shareholders and employees, and ensure organizational goals are backed
by data and sound reasoning.

Research in the Harvard Business Review cautions against getting locked into your strategic plan
and forgetting that strategy involves inherent risk and discomfort. A good strategic plan evolves
and shifts as opportunities and threats arise.

“Most people think of strategy as an event, but that’s not the way the world works,” says
Harvard Business School Professor Clayton Christensen in the online course Disruptive Strategy.
“When we run into unanticipated opportunities and threats, we have to respond. Sometimes we
respond successfully; sometimes we don’t. But most strategies develop through this process.
More often than not, the strategy that leads to success emerges through a process that’s at work
24/7 in almost every industry."

CHARACTERISTICS OF STRATEGIC GOALS

To craft a strategic plan for your organization, you first need to determine the goals you’re trying
to reach. Strategic goals are an organization’s measurable objectives that are indicative of its
long-term vision. Here are four characteristics of strategic goals to keep in mind when setting
them for your organization.
1. Purpose-Driven

The starting point for crafting strategic goals is asking yourself what your company’s purpose
and values are. What are you striving for, and why is it important to set these objectives? Let the
answers to these questions guide the development of your organization’s strategic goals.

“You don’t have to leave your values at the door when you come to work,” says HBS Professor
Rebecca Henderson in the online course Sustainable Business Strategy.

Henderson, whose work focuses on reimagining capitalism for a just and sustainable world, also
explains that leading with purpose can drive business performance.

“Adopting a purpose will not hurt your performance if you do it authentically and well,”
Henderson says in a lecture streamed via Facebook Live. “If you’re able to link your purpose to
the strategic vision of the company in a way that really gets people aligned and facing in the right
direction, then you have the possibility of outperforming your competitors.”

2. Long-Term and Forward-Focused

While strategic goals are the long-term objectives of your organization, operational goals are the
daily milestones that need to be reached to achieve them. When setting strategic goals, think of
your company’s values and long-term vision, and ensure you’re not confusing strategic and
operational goals.

For instance, your organization’s goal could be to create a new marketing strategy; however, this
is an operational goal in service of a long-term vision. The strategic goal, in this case, could be
breaking into a new market segment, to which the creation of a new marketing strategy would
contribute.

Keep a forward-focused vision to ensure you’re setting challenging objectives that can have a
lasting impact on your organization.

3. Actionable

Strong strategic goals are not only long-term and forward-focused—they’re actionable. If there
aren’t operational goals that your team can complete to reach the strategic goal, your
organization is better off spending time and resources elsewhere.
When formulating strategic goals, think about the operational goals that fall under them. Are
they actionable steps your team can take to achieve your organization’s objective? If so, the goal
could be a worthwhile endeavor for your business.

4. Measurable

When crafting strategic goals, it’s important to define how progress and success will be
measured. For instance, the goal “become a household name” is valid but vague. Consider the
intended timeframe to reach this goal and how you’ll operationally define “a household name.”
The method of obtaining data must also be taken into account.

An appropriate revision to the original goal could be: “Increase brand recognition by 80 percent
among surveyed Americans by 2030.” By setting a more specific goal, you can better equip your
organization to reach it and ensure that employees and shareholders have a clear definition of
success and how it will be measured.

PRIORITIZING STRATEGIC GOALS

Once you’ve identified several strategic goals, determine which are worth pursuing. This can be
a lengthy process, especially if other decision-makers have differing priorities and opinions.

To set the stage, ensure everyone is aware of the purpose behind each strategic goal. This calls
back to Henderson’s point that employees’ alignment on purpose can set your organization up to
outperform its competitors.

Calculate Anticipated ROI

Next, calculate the estimated return on investment (ROI) of the operational goals tied to each
strategic objective. For example, if the strategic goal is “reach carbon-neutral status by 2030,”
you need to break that down into actionable sub-tasks—such as “determine how much CO2 our
company produces each year” and “craft a marketing and public relations strategy”—and
calculate the expected cost and return for each.

The ROI formula is typically written as:

ROI = (Net Profit / Cost of Investment) x 100

In project management, the formula uses slightly different terms:

ROI = [(Financial Value - Project Cost) / Project Cost] x 100

An estimate can be a valuable piece of information when deciding which goals to pursue.
Although not all strategic goals need to yield a high return on investment, it’s in your best
interest to calculate each objective's anticipated ROI so you can compare them.

Consider Current Events

Finally, when deciding which strategic goal to prioritize, the importance of the present moment
can’t be overlooked. What’s happening in the world that could impact the timeliness of each
goal?

For example, the coronavirus (COVID-19) pandemic and the ever-intensifying climate change
crisis have impacted many organizations’ strategic goals in 2020. Often, the goals that are timely
and pressing are those that earn priority.

CRAFTING GOALS FOR THE FUTURE

As you set and prioritize strategic goals, remember that your strategy should always be evolving.
As circumstances and challenges shift, so must your organizational strategy.

If you lead with purpose, a measurable and actionable vision, and an awareness of current events,
you can set strategic goals worth striving for.