President and co-founder of staxbringing merchants of all types a whole new, integrated payment processing experience.
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As we enter the season of annual operational plans, it’s important to understand your strategic initiatives before you begin the planning process.
It’s so easy to mix up your objectives and key results (OKRs) and initiatives and get caught up in your many KPIs that it can be hard to determine your focus.
Here are three ways to make sure you have the right strategic initiatives in place.
Table of Contents
1. Ask yourself if it’s new, expanding, or entertaining.
A big tip: your initiative is not strategic? It’s something you keep. Anything that falls under day-to-day operations, such as ‘generating revenue’, is not a strategic initiative.
On the other hand, if something is new or expanding, there is potential. In that case, you need to determine what are the most important things you need to make it a success.
Do you have to:
• Expand the team?
• Launch a product?
• Create a new division?
Once you’ve built that list, the next step is to assess how this fits into the long-term story of the organization and what the underlying pieces are. For example, if you consider an initiative to be ‘global’, you should have a clear understanding of what that means and who is involved in developing it. And when you have that, you need to determine how you are going to measure its effectiveness.
This is the ultimate filter map of how you spend your time as an organization, so if this part is incomplete or lacks clarity, you have more work to do to refine your strategic initiative.
2. Your plate is tailored to your choices.
Once you’ve determined your key strategic initiatives, you need your board’s alignment and agreement on those choices or they’re dead in the water. To ensure you get their buy-in, be prepared to explain why some initiatives may now involve an investment that may not pay dividends for years to come, but is your path to growth. If they understand the payback period and your rationale behind the direction you want to go, your board can advise and support you on those strategic initiatives.
This means planning a full ROI analysis of each initiative. It is important to understand the impact of the expenses you allocate to it, the timeline required and what the organization gets in return. Not all strategic matters need only be revenue related, but what is the impact on the organization? Your board cares if this impacts business value, revenue, cost savings or redundancy for business protection. Be clear about what the organization gets!
3. You have a clear picture of how they fit in with your organization.
Even if you’ve done your homework on new or expanding initiatives and have your board’s blessing, you still need to understand how they fit into your organization. For example, do you have 12 initiatives, but they all seem to fall under one person? That’s a surefire recipe for overwhelm and a red flag that you may not have the right (or too many) strategic initiatives. Instead, think about what matters most and then spread your initiatives across the organization, making sure they are linked to goals and key outcomes so everyone is working toward the same goal.
Remember, creating the right strategic initiatives for your organization goes beyond a simple profit and loss (P&L) exercise. So before you develop your annual operational planning (AOP), first run your potential initiatives through these three filters.
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