In my last post, "The Measures That Matter," I discussed the costliness of having too many measures and the importance of utilizing only the measures that highlight performance against your objectives. I talked about defining measurements that are linked back to objectives, but I never touched on actually creating those objectives. So, I would now like to take a small step backwards and discuss the development of objectives for your organization.

If you have ever seen a strategy map, which I am sure most of you have (if not, check out "Balanced Scorecard Strategy Map Templates and Examples" in our blog), you have seen that the objectives populate the strategy map and create the story behind the strategy. The objectives, which are tied together in a series of cause and effect relationships, are the critical factors of success that outline what the strategy must achieve on the road towards accomplishing the mission. Typically, the objectives of an organization are categorized into four different perspectives. The objectives should be able to provide clarity when answering the questions below.

Financial Perspective- "If we succeed, how will we look to our donors or taxpayers?"

Customer Perspective- "To achieve our mission, how must we look to our constituents?" The customer perspective objectives can be created in the "voice of the customer."

Internal Perspective- "In order to achieve our other objectives, and satisfy our constituents, at which business processes must we excel?"

Learning and Growth Perspective- "To be successful, how can we invest in our organization to foster learning and improvement?"

The perspectives are an organizing framework and each organization may choose to modify the language in a different manner to reflect the way the organization "talks." Once the perspectives have been agreed upon, the objectives, which are perspective specific, can be developed. Most commonly, the objectives are written as action statements that adhere to the "verb + adjective + noun" format. By following this format, the objectives should be limited to 2-4 words. If you feel this might not be enough to adequately describe each objective, an objective statement, of no more than two sentences, can be created to provide the necessary details. These two sentences should clearly define what the objective means and how it will be accomplished.

Below are a few common objectives for each of the perspectives.

As you formulate objectives for each of the perspectives, try to resist the urge to write down every little project or day-to-day operational activity. The objectives should capture the key elements of the strategy and describe the behavior that you want to see within the organization. As a general rule of thumb, we encourage organizations to keep the total number of objectives around 15. The one thing you want to avoid, much like having too many measures in my last post, is having too many objectives and being unable to effectively manage all of them.

Relating back to the post on measures, remember that each objective needs a yardstick to measure its progress. If an objective is not specific enough, or lacks measurability, there is no way to determine whether it is helping the organization move towards the achievement of the mission. Clear objectives and well-defined measures help concentrate the organization's efforts and focus valuable resources on the activities that have a positive impact on the overall strategy.

Thanks for following along and keep us posted with any questions or comments!