Internal Strategic Objectives

Internal Strategic Objectives

Internal Objectives

The internal process perspective is typically focused on processes that your organisation must excel at. According to Michael Treacy and Fred Wiersema these processes can be divided into three areas: innovation, customer intimacy, and operational excellence.

Innovation

Most innovative products/services:

This objective is for organisations that pride themselves on constant and cutting-edge innovation. You would first need to define what you mean by “innovation” and how you’re innovating in each particular area.

Differentiate the product:

Your organisation might use this objective if you are in an environment where the customer cannot tell the difference between your organisation and another organisation’s product. You are asking your organisation to either develop new services around the product or new differentiating features of the product or service.

Invest a certain amount in innovation:

Sometimes organisations use an objective like this to drive investment in research and development or other innovative activities. This objective may be used in a strategy when you are signalling a shift in investments in the innovation category.

Grow percentage of sales from new products:

Similar to investing in innovation, this objective focuses on the outcome your organisation is hoping to achieve. It forces you to constantly innovate, even on your most successful products.

Improve or focus research and development (R&D):

This objective focuses on specific innovation. If you are an organisation with multiple product lines, you might want to focus your innovation on one product line over another; calling out the specific direction can be quite helpful in your objective.

Acquire new customers from innovative offerings:

This objective focuses on the reason you put focus on innovation. For example, you may be innovating in order to enter a new market or attract customers you might not be able to reach with your current offerings.

Operational Excellence

Reduce cost by a certain amount annually:

This objective focuses on reducing costs—typically costs within a product or service that is an offering (to make that particular product or service more effective). It could also focus on reducing overhead costs across your organisation.

Reduce waste by a certain amount:

If your organisation uses a lot of raw materials, a typical objective is to reduce waste from that process. This usually results in significant cost savings.

Invest in Total Quality Management:

Total Quality Management (TQM) reflects a process around quality improvement, which can mean doing things more efficiently or effectively. This objective is used in organisations that have implemented (or are implementing) TQM.

Reduce error rates:

This objective applies for organisations that have many repeatable processes. Sometimes this results in Six Sigma projects, and other times the result is just a focus on defining processes so that staff can adhere to these processes.

Improve and maintain workplace safety:

If your organisation uses heavy equipment, chemicals, mechanical parts, or machinery, focusing on workplace safety is a good objective. Improving it can reduce costs and improve job satisfaction.

Reduce energy usage per unit of production:

If your organisation uses a significant amount of energy, making a goal to reduce this can be an effective and important strategy.

Capitalise on physical facilities:

In retail organisations, this could mean focusing on an appropriate storefront location. Or it could mean finding underutilised assets and either using them or selling/leasing them to others for use.

Streamline core business processes:

Many complex organisations have very long, drawn-out processes that have developed over many years. If your organisation is looking at these processes, this could be a key objective for you.

Increase reliability of operations:

If your organisation has poor reliability, having an objective like this will encourage management to look at investments and changes in processes that could increase this reliability.

Regulatory

Ensure compliance:

In a regulated environment, there may be a lot of rules that you need to follow, even if they don’t seem strategic. They are often called “Internal strategic objectives” to ensure no one cuts corners.

Increase recycling:

This is a self-explanatory objective but can sometimes apply to all aspects of waste. Depending on the organisation, there are compliance rules around making this happen.

Improve reporting and transparency:

Organisations just entering a regulatory environment or that are trying to change their business model to meet contract needs, may find that they need to improve or change the way they report in order to do better cost accounting or just be more clear about their actions.

Increase community outreach:

For some organisations, it is important to be seen as part of the community. This is especially true for organisations that are either selling a necessity in the community or are creating any kind of negative externality (like pollution).

Optimise control framework:

If you’re a regulated organisation in an incentive environment, you may need to make sure you have the proper controls in place to avoid one-off or systematic cheating.

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