We said earlier that successful high growth companies are very focused. A key part of this is, however, focusing on a few really critical or breakthrough goals. It’s all too easy as a company gets bigger to set a whole range of objectives for the business – sales, profit, market share, new products, cost reduction, exports, quality, delivery, customer satisfaction and so on – and lose focus. In our experience really successful companies set themselves only a few key objectives – sometimes referred to as ‘the vital few’ – centred on the make or break issues.
As with many things in life, in running a business 80% of the result invariably comes from 20% of the activities. Successful, high growth, businesses therefore need to identify that 20% – and set objectives purely for that 20%. If you have more than six so called strategic objectives, then they are not strategic – some will be ‘nice to have’ rather than ‘must achieve’.
If you have ever wondered why some large public sector agencies with huge resources and big budgets seem to deliver so little, just look at their Business Plans or other strategy documents. Chances are they will contain a huge list of so called strategic objectives – with the inevitable result that they lose focus.
There is no merit in setting a long list of objectives – quite the opposite. Less is more! Identify ‘the vital few’, the destinations you must reach in order to realise your vision. Then set objectives for those three or four areas.