Effective objectives require strategic consistency and focus
Mapping a clear, easy-to-understand objective for each metric is critical. But it's only one factor of several in creating effective metrics.
Too many times we obsess over crafting the perfect objective, only to find them less effective when:
In short, creating a clear objective needs to be coupled with consistency in how the objective ties into the longer term, focus in the number of objectives, and efficiency in building and sharing them.
The research shows that most managers feel similarly . It may sound simple, but focusing and prioritizing a limited set of objectives can be more effective than tackling a ton at once.
When creating a new objective, it can be helpful to reference The Balanced Scorecard. The Balanced Scorecard suggests that companies benefit primarily from four holistic types of success measures: financial metrics, customer insights, internal process efficiency, and learning and innovation. Mapping individual metrics to pillars in The Balanced Scorecard helps you see where you might have too many goals competing in one area, or how consistent objectives are at your company over time.
In Rally, it's easy for teams to map any metric being created to a core objective. By default, each metric in Rally is mapped to one of five pillars inspired by The Balanced Scorecard, which allows teams to quickly orient goals around financial growth, product innovation, operational efficiency, customer insight, or employee happiness. From there, teams can continue to create more specific objectives, tag metrics, or tie them to specific goals.
Here are additional best practices we found for creating effective objectives:
Discuss new objectives in the context of goals or objectives the team has previously been working on. Connect them to a broad pillar that will remain consistent over time (for instance, operational efficiency).
Outline how various objectives may compete with each other, and what the tradeoffs or scenarios might look like, so that teams avoid paralysis in understanding how to prioritize goals. As a rule of thumb, do not pursue more than a handful of core objectives at the same time.
Involve the owners of individual metrics in the creation of strategic objectives. This helps avoid scenarios where individuals might care more about achieving a single metric over the broader "why" objective, and will challenge team members to be more critical in defining what exactly single metrics are impacting.
Leaders at every level should be able to explain why their objectives and goals matter – both for their team and the organization as a whole. Historically, the single best predictor of strategic alignment was how consistently managers from top executives to frontline managers – explained their team's priorities in terms of their unit and the company.