I’m pretty sure you’ve had this experience. You’re in a strategic planning session for your organisation and you get to the point where someone suggests “we need to write down our objectives.” Some game individual then stands up and walks to a flipchart or whiteboard. With pen in hand he or she writes “Objectives” at the top.
Everyone piles in brainstorming, and barnstorming, to produce a list that’s far too long. The discussion and arm wrestling then start to reduce the items to, say, half a dozen. After some considerable time, the exhausted and frustrated participants are only too happy to move onto the next agenda item.
But they’re usually not content, because invariably the “Objectives” list contains a hodgepodge of activities, nice-to-haves and vague statements of intent (e.g. “to be a good corporate citizen”, “make the organisation a desirable workplace” or “to be innovative”). And it will never be clear if any of the objectives has been achieved, because not one of them can be measured.
Does this ring a bell?
Three Simple Symbols
If only the people around the table knew the secret of truly measurable objectives: All business measurement can be covered by three symbols.
That might sound simplistic and easy, but it’s true. Over many years working with clients and in facilitating my public workshops on strategic planning, I have developed this neat trick that will instantly make your organisation’s objectives measurable.
Let me explain.
In the process of developing my strategic planning method my company designed software to assist in producing a scorecard of results. As you know when it comes to software and coding there’s no room for sloppiness. We had to find a way to prevent strategic planning teams writing down vague intentions and calling them “measures.”
We realized that all measures in business can be preceded by one of three symbols. “If you can’t put one of these symbols in front of a ‘measure’ then it’s not a measure,” I tell clients. What are these secret symbols? They are $, # and %.
Let’s test this: $ revenue, $ profit, $ funds; # patients, # debt/equity, # customers, #occasions; % market share, % member retention.
I prod my clients by asking: “Are there any $ ways you can measure this? Are there any # ways you can measure this? Are there any % ways you can measure this?” This approach generates a surprising number of measures.
Three Step Method
Let’s look at an example.
A recent client, a credit union (aka a mutual bank), decided in the case of one of its key stakeholders, members, that they wanted “To get members to borrow more and to get more members.” We call this a behavioural outcome. It’s the first step in a three-step process.
After careful consideration, and as the second step, this was translated into the organisation objective: “To increase revenue from current and future members.” This was to be driven by business strategy around members which would be developed later.
The third step, and following our “three-symbols” approach, suggested several possible measures. One was simply, $ total revenue. This measure covered all members, new and existing. This could be broken down into $ revenue current members and $ revenue new members.
The company also considered tracking the number of members hence the measure, # members, was identified. This too can be broken into current and future. A market share metric is highly relevant too, hence the measure % market share, came in for consideration.
With these three symbols up your sleeve you can develop many measures around meaningful and theoretically-sound objectives. That’s important because targets on these shape the strategies you develop and, ultimately, how you monitor your corporate success.
Author – Graham Kenny
Regular author in the Harvard Business Review
Graham Kenny, CEO of Strategic Factors, is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. You can connect to or follow him on LinkedIn.