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Tuesday, August 31, 2010

Three Steps to Creating Business Objectives that Work

We often read comments urging consultants to align marketing programs with business objectives.  It sounds great. Unless, of course, your client or company hasn't specified their business objectives or, more commonly, has confused strategies with objectives. When you encounter a company like this (and you'd be surprised how many billion-dollar companies do not use objectives effectively), you have two choices: run like hell because this is a clear sign of organizational dysfunction or strap on the responsibility of helping your client define their objectives.  In most cases, we choose the second option -- better to be part of the solution than adding to the problem.  

If you choose to lead or guide your clients through this process, you immediately need to sort through the fundamental distinction between objectives, strategies and tactics. Crazy as it may seem in this era of endless analytics, companies and consulting firms often languish and struggle to get on the same page when these terms are unclear. Worse, metrics may be misaligned, misinterpreted or misunderstood when one person thinks they are talking about strategy and the other considers it an objective.

You can navigate through these situations with a simple three-step process that we call OST.  This is simply a hierarchal reminder that Objectives, Strategies and Tactics have to be developed in that hierarchal order to build actionable, successful programs. This is not rocket science, but it bears explanation for those who may know marketing, media and customers, but not business. 

1. Set objectives first:  Objectives communicate what the client organization plans to achieve. They need to be realistic, specific and measurable. A fine objective would be: To increase sales by 10% in the first quarter of 2011.

2. Follow objectives with strategies:  This may sound contrary to the way you think of strategy. Many of us are conditioned to talk about the client "strategy" or the strategy for the program as though strategy itself is what guides business.  It does not. Look back on your experience. How many great strategies have you heard that never came to fruition?  How many times have you heard frustrated or disillusioned employees talk derisively about the "strategy du jour?" There is a reason for this. Frankly, strategies without accountability are easy to articulate. They motivate, excite and even inspire people -- until they fail. We need to understand that strategies are general in nature. Untethered, they are likely to remain little more than words. Placed in the right hierarchy -- attached to specific, quantifiable objectives -- they become dynamic and charged with the energy required to make them actionable.  An acceptable strategy tied to the objective cited above would be: Cross sell the division's new WonderProduct II to existing clients.

3. Tactics drive strategies: After you have established quantifiable objectives with supporting strategies, you need to begin doing the actual work. Tactics are what you do to make strategies work. They are the building blocks of programs and they make or break the success of programs and business.  They are the phone calls, the conferences, the articles and community building that has to happen day in and day out.  While Nike's famous call to "Just Do It" rings in our ears, tactics can be disastrous in isolation of objectives and strategies -- especially as you communicate with customers, media and channel partners. Audiences will take your words at face value, and will assume you already have set objectives and strategies before going public with a program. As you have probably experienced, this is not always the case. Nothing can freeze a customer faster (and make your company or your client look ridiculous) than to suddenly stop pursuing a tactic you've been driving publicly, because somebody in the organization realized it was out of synch with an objective or strategy. In business, companies can thrive when the left hand knows what the right hand is doing. An example of a tactic is: Introduce the new Wonder Product 2 solution to all current customers in the CEO's keynote speech during Company World 2010 in October.

One final note is in order. When setting up objectives, be sure you and your clients do not tackle more than you can handle. Establishing too many objectives may make you look great to your client or boss in the beginning but it sets an unrealistic expectation that may color your performance review in the end if you are unable to achieve what you promise. If you specify more objectives than the budget enables you to accomplish, you will find your program log-jammed and bleeding dollars trying to tackle too much and ultimately achieving too little. We suggest you follow the urging of a client Marketing Vice President to simply "Do Fewer Things Better!"  Based on our experience, here are some targets to consider:
  • set a maximum of four to six measurable objectives for the year 
  • establish no more than three strategies for each objective, and
  • create a fresh set of 5-10 tactics each quarter that align with your strategies.
It may not always be as easy as this, but it doesn't have to be much harder. Breaking down the process into the right hierarchy creates clarity and leads to specific achievable metrics for you and your client to agree upon. You do yourself and your client a great service by simply putting Objectives, Strategies and Tactics in the right hierarchy to understand how they depend on each other for success.

1 comment:

  1. Great post Bill, thorough and helpful-thanks.