How Many Strategic Goals Should a Company Have?
2 July 2021
This is undoubtedly one of the questions I get asked the most. Particularly when I’m helping a company to map out their strategic goals, leaders always want to know how many goals they should aim for.
A frequently quoted answer to this is seven goals. That’s because, for decades, seven was acknowledged as the number of items that our brains can easily recall. However, as we’ll see in this article, I argue that the ideal number of goals can actually be a little higher – and I reveal a trick to help make your goals memorable.
It’s true, our brains can only remember a few things at a time
The reason you struggle to remember phone numbers isn’t down to your age. It’s because of the brain’s “working memory” capacity – the amount of information we can easily process and recall in the short term. In the 1950s, psychologists determined that the limit to our working memory was around seven items, meaning the longest sequence of things we could memorise and recall on the fly was seven items (plus or minus two, depending on the individual). The “magical number seven” they called it. But one recent study has found the magic number could be as low as three or four items when people aren’t using memory-boosting strategies.
Of course, some people have demonstrated amazing memory feats, like memorising a whole deck of cards, but those memory masters tend to use various strategies and tricks, such as grouping items together. If you took away those tricks and strategies and gave a memory master a different sequence to remember, they would very likely perform the same as everyone else and recall just four to seven items.
So what’s the magic number for strategic goals?
Given the science, it makes sense that companies to not exceed seven strategic goals, and popular goal setting approaches such as the OKR (Objectives and Key Results) aim to stay within that limit.
However, a single-digit list can be problematic, especially if organisations want to establish goals across their entire business from outcomes such as finance and customer goals to enablers such as business processes, systems and people goals. Keeping to just 7 goals can mean missing important goals out or making goal so high level that it’s hard for people in the organisation to really relate to them. Going the other way, if you have more than 20 goals, the list becomes far too granular and operational – and runs the risk of becoming overwhelming.
In my experience, around 15 is the sweet spot for strategic goals. Providing these 15 (plus or minus 2) goals are mapped out in the context of a strategic framework or strategy map, it’s a very comfortable number to work with.
This is because a strategic framework allows you to group goals together in a memorable way. Techniques like grouping items together and using visual aids are what allows people to memorise huge sequences – and these techniques can be applied to strategic goals just as effectively.
When I work with a company, we break down the organisation’s overall strategy into distinct layers or perspectives: financial goals, customer goals, internal process or operational goals, and resources/enabling goals (i.e. people, systems, culture etc.). For each of these distinct layers, we then identify key goals that relate to that perspective.
A streamlined strategy map like this can be laid out on one page, forming a creative, visual image that serves as a roadmap and memory aid. When the strategic goals are laid out in a plan-on-a-page, people remember the goals more easily – they remember the image, they remember the different strategic layers, and they remember the goals that make up each layer.
You need a plan-on-a-page
One of the main reasons why companies fail to execute their strategy is because no one really understands the business’s key goals and priorities. So many strategy documents are overly long and complex, to the point that either nobody reads it or, if they do read it, they don’t understand the core objectives.
A plan-on-a-page combats this by being a concise, visual framework that anyone can read and understand what needs to be done. A visual document like this immediately focuses the leadership’s and employees’ minds, and provides a clear direction – all at a quick glance.
There are many tools, including strategy maps, that will help you arrive at a simple plan-on-a-page that sets out your 15 or so strategic objectives. Then, once your plan is in place, there are other strategy management tools to help you align the organisation’s activities (projects, programmes and initiatives) with those objectives. After that, it’s a case of designing metrics to measure whether the company is on the right track and measuring ongoing performance.
Having a simple, achievable strategic plan is often one of the main things that separates a top-performing company from its weaker competition. That’s why I always advise my clients to create a manageable list of 15-or-so strategic objectives and visualise those goals in an attractive, memorable one-pager.
Where to go from here
If you would like to know more about KPIs and performance measurement, check out my articles on:
- What is a Leading and a Lagging Indicator?
- How Do You Develop Key Risk Indicators (KRIs)?
- What is the Difference between Key Performance Indicators (KPIs) and Critical Success Factors (CSFs)?
Or browse the KPI Library to find the metrics that matter most to you.
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