Strategic Planning Process

Balancing Your Strategic Priorities

By Erica Olsen ⋅ July 3, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

Business owners and executives often fall prey to the allure
of setting too many financial goals. Or, their goals are exclusively financial.
This can detract from the other reasons you’re in business, such as employing
people, contributing to your community, or providing a needed product or
service. Enter the Balanced Scorecard.

We’ve always been big proponents of the Balanced Scorecard
and believe it should drive overall strategy. It is an excellent management
tool, and many organizations say the scorecard is the foundation of their
measurement and management systems. In fact, we created our online strategic
planning system, MyStrategicPlan,
based on the Balanced Scorecard framework. By setting goals in the four key
areas that all organizations must excel in to succeed, you create a balanced
and holistic strategy.

• Financial
  or mission: When you provide value to your customers, you achieve your
  financial or mission goals.
• Customer:
  If you want to generate additional revenue, you need to provide value to your
  customers.
• Internal/operational
  process: In order to provide value to your customers, you must have the
  internal business process to create that value.
• Employee/people
  (centered on learning and innovation): In order for your business processes to
  function, you need people who are skilled and knowledgeable.

Maintaining this same kind of focus is also key for each perspective. You should develop at least
one long-term strategic objective but no more than five for each area. If you
develop too many at the beginning, your plan may become unwieldy. Likewise, sharing
too many goals with your people can often be as dangerous as sharing no goals.

Don
Moyer, writing for the Harvard Business Review, likens this effect to peanut
butter, “The more you spread it, the thinner it gets.” He suggests choosing a
single, clearly articulated objective or a goal relatively narrow in scope that
can be easily distilled. Consider an objective that embodies your
organization’s central purpose or a goal that focuses on meeting a higher
standard for a single product. Either of these can be well-defined and
measurable and serve to galvanize an organization.