Objectives describe WHAT we want to achieve. Defining objectives within the boundaries of the Five Filters gives us clear focus and enables us to communicate our strategy to all employees.
Defining Strategic Objectives
In previous articles, we described the 8-Step Strategy Management Process and the first step, which is the Five Filters. We explained how the five filters (Mission, Vision, Values, Ideal Client, and Differentiators) provide a frame around our strategy. Now, we can define our strategic objectives, ensuring that they support the Five Filters.
Strategic objectives describe what we want to achieve. They are high level only. We will later define how we measure success and how we define the actions we’ll take to achieve those objetives.
Four Balanced Scorecard Perspectives
The Balanced Scorecard strategy management methodology teaches us to view strategy comprehensively through four perspectives:
- Financial: What outcomes can we expect?
- Customer: How do we delight our customers?
- Internal Process: What do we need to start, stop, or improve to delight our customers
- Learning and Growth: How can we support our organization?
These four perspectives ensure a complete and balanced strategy. If we neglect any one of these, our strategy will likely fail to deliver the desired results.
Let’s see how to define strategic objectives for IT within these four perspectives to navigate the IT Value Journey.
Objectives to Support the IT Value Journey
We define IT Strategic Objectives within the framework of the IT Value Journey.
Since objectives are often grouped into themes, our IT objectives will fit into the themes of Maintain, Enhance, and Transform as defined in the IT Value Journey. We will group objectives in our Customer and Internal Process perspectives in accordance with those themes.
See our three themes in the image below.
In the Maintain state, our single customer objective is to Deliver High Quality Service at a Competitive Cost. That’s what our business is looking for and, when we achieve that objective, we will earn the trust, credibility, and respect to navigate into the Enhance state.
Operationally, we can define three key objectives in the Maintain state that will enable us to achieve our customer objective:
- Maintain a Secure and Reliable Infrastructure
- Meet Service Level Commitments
- Improve Quality While Reducing Costs
When we reach the Enhance state of the IT Value Journey, we don’t stop working on these Maintain state objectives. Instead, these go into continuous improvement mode where we keep raising the bar to achieve higher performance.
In the Enhance state, our customer objective is to Support the Business With Timely Enhancements. If we think of the Maintain state as “keep the lights on”, it’s clear that many of the upgrades to infrastructure and systems that the business needs simply aren’t getting down. In the Enhance state, we set out to bridge that gap.
Our internal processes will focus on three key objectives:
- Partner with Customers to Understand Their Needs
- Support Business and IT with Effective Governance
- Deliver Quality Enhancements within Time, Scope, and Budget
Achieving these objectives will demonstrate how IT is supporting the business and keeping up with their needs. We will have been continuously improving the basic IT functions in the Maintain state, getting more efficient and effective, enabling us to shift resources to the Enhance activities that the business has been craving. Trust, credibility, and respect for IT continues to rise and we earn the opportunity to navigate into the Transform state.
Our customer objective in the Transform state is to Drive Business Success with Innovative Solutions. Think about it, in the Maintain state, IT was not trusted to drive innovation and probably lacked the resources and processes to do so. As we evolved into and through the Enhance state, we improved process, measured IT value, and positioned IT to transform the business.
Our process focus in the Transform state is on three key objectives:
- Research Applicable Technology
- Align Technology Roadmap and Architecture with Company Vision
- Deliver Transformative Solutions
Achieving these three objectives will enable us to realize the customer objective of driving business success.
While the Customer and Internal Process objectives fall into our three strategic themes, the Organizational (sometimes referred to as Learning and Growth) objectives span across all themes. These are the objectives that provide the people with the training, tools, systems, data, organizational structure, culture, and more that they need to achieve the operational and customer objectives.
Typical organizational objectives include:
- Attract, Develop, and Retain Key Competencies and Cultural Fit
- Provide Tools and Techniques that Enhance Capabilities
- Foster a Business and Customer Focused Culture
Can you see how these organizational objectives will prepare your team to achieve the process and customer objectives?
We always discuss financial objectives last because they are the outcomes of the other three perspectives. When we provide the organizational support, we enable our people to achieve the processes that will delight our customers. Then, and only then, can we contemplate financial outcomes.
We look at our financial objectives in terms of efficiency and effectiveness which, combined, should create shareholder value.
In the Maintain state and throughout the Enhance state, we focus on efficiency. Key financial objectives might be:
- Ensure Budget Discipline
- Reduce the Cost of IT Service
In the Enhance state, we also focus on Effectiveness, which is the major focus in the Transform state. Our key objective is to:
- Improve Business Outcomes
It should be clear that these financial objectives represent outcomes and are not things that we directly control.
Strategic Objectives and the Five Filters
As you define objectives across all four perspectives, challenge each one to verify that it supports the Five Filters. Will this objective help us achieve our Mission and Vision? Is it consistent with our Core Values?
Does this objective address the needs of our Ideal Client? Or are we trying to satisfy those that are most vocal or the ones we like the best? Do we really understand who the ideal client is, internally and externally, which requires clear understanding of the enterprise strategy?
And will this objective help IT and/or the business Differentiate? Remember, there are plenty of third-party firms, or even a parent company or sister company, that may be able to perform some of these functions faster, better, and cheaper that our IT organization. Consider using these resources so IT can focus on the core competencies that create a competitive advantage for the business.
Roadmap for Success
The IT Strategy Map may describe a plan for one to three years, but our objectives will remain the same. Each year, or even each quarter, we may adjust the goals and action plans associated with each objective to reflect our progress along the IT Value Journey.
You can use the strategy map to communicate the strategy to your team and the rest of the business. The alignment gained will, in itself, drive efficiencies and process improvements.
The IT Strategy Map is your roadmap to navigate the IT Value Journey. Our next article will describe how to translate your strategy map into a goal map, showing how we measure success for each strategic objective, and we’ll include some sample metrics. Then we’ll describe how to create action plans to achieve your objectives and measurable goals.
Together, these tools will enable you to measure the value created by IT and accelerate your IT Value Journey.
As always, if you want to know more, or just can’t wait for the next articles, email Emily at Emily@WolffStrategy.com and she’ll be happy to schedule a call with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management and Digital Transformation. Larry has served as CEO, COO, CIO, chief digital officer, and management consultant for public, private, international and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues.