Episode 011: Strategy Map — Measures, Targets, and Initiatives

Key Takeaways:

• Targets are the results (outputs) you would like to achieve when you complete your strategic objectives.

• Measures are the key inputs into achieving your targets that should be tracked regularly to indicate progress toward your targets and provide opportunities to make any corrections required to execute your strategy successfully.

• Targets and measures can be measured objectively (ie., percentages or dollar figures) or subjectively (ie., comments or self-evaluations).

• Initiatives are the programs, systems, and projects the organization will implement to achieve your strategic objectives.

• A dashboard can be created to monitor all of the targets and measures you are tracking in one place and to help you focus on your objectives regularly.

• Don’t forget to roll your strategy out to your “crew” — they should be able to see where they fit and how they can contribute to the organization’s success!

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Hi, church leaders! Welcome to the CEO Pastor podcast. My name is Cindy and I am your host for today's episode. My goal is to provide the management expertise every church leader needs to produce the ministry experience every church leader wants. We'll skip the jargon and cliches and focus on ideas that will help you accomplish the church's mission in your unique ministry context. Ready? Let's go.

Measures, Targets, and Initiatives

Today is the last episode of our strategy map series. And today we're going to talk about the measures, targets, and initiatives that you're going to be coming up with in order to actually execute the strategy that you've come up with. This is where a lot of people run into difficulties. Most people can come up with a strategy but, to actually follow through on that strategy and to change it if it needs to be changed as things go along and to continually evaluate how you're making progress on your strategy, that is much more difficult to do in a lot of cases. So I'm hoping today by going through how to set your targets and your measures, this should help you execute the strategy that you've worked so hard to create.

So you should already have three to five objectives for all of the perspectives of the strategy map. So that will be the beneficiary and stakeholder perspective, the stewardship perspective, the internal process perspective, and the learning and growth perspective that we talked about on our last episode. So you should have between three and five objectives in each of those sections that all connect together to support one another. And now we're going to come up with the target -- the result you want to achieve for each one of those objectives.

Setting Measurable Targets

So let's say, for example, in your financial or stewardship perspective, you have a target that you would like to raise an additional $20,000 this year over last year. That's a great target because it's an objective measure. It's something that you can quantify. You can say, "Did we hit $20,000 or not?"

But some of the things that you've come up with for objectives might be a little softer and more difficult to measure. For example, let's say you need to improve the communication skills of some of your volunteers or certain clusters of your volunteers or congregants, depending on what role they play. Well, sometimes it can be very difficult to measure the effectiveness of communication. So that's going to be more of a subjective measure.

So one way you could measure that is to have the people that you're training fill out a survey or a questionnaire before they begin the training, and then fill out the exact same survey or questionnaire after they've done the training. And that way, you can compare the two and see... they've said things in here that show that they've grown in their understanding of how to better communicate. Or you could also do surveys of the people who are receiving the communication and saying, "Have you noticed improvement in the people who've received the training on communications?"

So you might not necessarily be able to say, "So-and-so's communication has improved by 20%." Like, that's something that's a little more squishy. It's harder to say, yeah, improvement by 20% on something that doesn't have a number on it. So you may need to come up with some more subjective targets, some ways of measuring that don't necessarily involve numbers, but that at least point to improvement in those areas.

Measures: Leading and Lagging Indicators You’re on Target

So once you have your targets down for all of your objectives, whether it's targets that you can say, "Yeah, we've improved 20% or we've increased by 10" or something more like, "Oh, we see evidence of improvement here that we can't really measure but we see that there's improvement, and the people who have been involved in that improvement notice that as well", then you need to create measures. So the target is where you're going and the measures will come out of the things that you need to do in order to reach those targets.

So, for example, in my business, one of the things that we measure on a regular basis is how many oysters that we have in our inventory die every year. We're not doing a good job managing our inventory if we have a lot of them die over the course of the year. But sometimes you don't know that final number until you get to the end of the year. And that's a problem because if you're not coming up with ways to measure how well you're doing in the things that you need to do in order to make sure that you hit that target, then you get to the end of the year and it's too late to do anything about it then! You've already lost the oysters. You can't bring them back to life. So you need to have measures, things that you're measuring on a consistent basis leading up to that end of the year target to say, "How well are we doing on the things that we need to do on a day to day or week to week or a regular basis in order to be sure that we prevent the oysters from dying if at all possible.

So in business and economics we call that the difference between lagging indicators -- usually it's the final result and, by that point, you know the answer and it's too late to make changes in order to get a different result -- or you have leading indicators, which are the ways that you measure the different aspects of what you're doing that will ultimately lead to the final result, target that you're going to.

Examples of Leading and Lagging Indicators

So I calculate out at the end of the year how much our mortality is on the oysters, how many of them died, the percentage, but we have leading indicators leading up to that. If the crew is bringing in racks of oysters and looking at the trays that are in those racks and half of them are dead consistently, then they know that that's a leading indicator that we're gonna have a problem at the end of the year if we don't change something up. Or if they're looking at the different racks that we have in storage out in the water and they bring them in and they notice that there's a lot of mortality, a lot of dead oysters, from particular areas that we're buying oysters from, then when we notice that, then that means we can stop buying oysters from that river or from that bay. So, that way, we can reduce the amount of mortality that we're gonna have at the end of the year. Or if we notice that oysters that have been out for a certain length of time are starting to die away, then we might be able to move them somewhere else and kind of give them a refresh and let them feed and recover. So those are the different measures that we can use so that we can kind of change up what we're doing to make sure that we meet our target -- a low mortality rate -- by the end of the year.

So when you're coming up with your measures, it can be a few different things that will lead into the one or two targets that you're trying to come up with for every objective that you're doing. So one easy one that we all probably know about is a lot of people that are trying to maintain their weight or to lose weight. Well, the target, let's say, is to lose 50 pounds. Well, if you wait till the end of the year... if you're going to lose 50 pounds in a year but you wait to the end of the year to measure anything, you might get to the end of the year and discover, oops, I only lost five pounds because you haven't been measuring any of the things that you need to do in order to lose those 50 pounds in the year.

So what are the things that need to go into achieving that goal, achieving that target? You might measure the number of times that you exercise or you might measure the amount of calories that you're consuming in your meals or you might be taking a tape measure and measuring your waist or your chest or whatever it is that you're trying to work on. And those can be leading indicators that, if they're going in the right direction, then you're more likely to hit your target at the end of the year of losing 50 pounds. So essentially, when you're doing your leading indicators, you're measuring the inputs that go into the result that you're trying to achieve, which is the output. The final result is the output of all of the things that you're doing day to day to achieve the goal that you've set out.

Test Your Assumptions about What Your Measures Indicate

So an example of a little bit of a less obvious thing that you might encounter is... we're in the oyster industry. We're always concerned about our impact on the environment. Because we make our money from the environment, we don't want to abuse the environment that we're in. So part of what we tried to do is to lower the amount of fuel that we use on our boats and in our trucks and all that kind of stuff and try to use... use our modes of transportation efficiently so that we're not wasting fuel. So I fairly regularly just skim through our financial statements and just notice any differences between what we've done up to that point this year versus what we usually would do up to that point in previous years.

And one year I was going through and I noticed that our fuel bill specifically for the boat was a lot lower than it normally would be. Now, just because it was lower, that might not be a great thing. Of course, you didn't have to spend the money to buy that fuel but why? You need to figure out why when you're looking at that kind of thing. Because if the reason you're not spending as much money on fuel is because you're not going out on the water as much because you're not selling as much, that's not necessarily a good thing. If you don't need to go out and get more oysters to put into a box, that's bad. You don't want it to go down because of that.

So I went in and I asked my brother, "Are we doing anything differently than we did last year to make such a big difference in our fuel for the boat?" And we went through a few options. We knew that we were selling more than we were in the previous year. So I was kind of hoping that he might say, "Well, we're specifically working on being more efficient and making sure we're going out fewer times and bringing in more stuff all at once", which I'm sure we were doing.

But after we talked about it for a while, we realized that what had happened was we had removed... there's a cage that you can put over the propeller of the boat that prevents the propeller from getting tangled up in ropes that are floating under the water that you might not see when you're driving the boat. And it also is helpful for if somehow, like, you back the boat up into something... like, if there's a log floating in the water you didn't notice or if... something under the water that you didn't see or if you come in to park the boat at the wharf too fast. If you have that cage there, it'll prevent the propeller from hitting that hard object and becoming damaged.

And we had that cage round for a while. But that particular year, which I wasn't aware of, they had removed the cage. So we determined after thinking about it and talking it through for a bit that by removing the cage we had saved significantly on the fuel that we were using for the boat. And, like, we have put that cage on there because it's very expensive to repair the propellers when they get damaged. And they... you can't really drive very well if you have a damaged propeller. So we had put that cage on there to protect the propeller thinking that we would save money that way.

But after I had noticed the difference between how much we were spending on fuel when we had the cage on the propeller versus how much we were spending on fuel when the cage was not on the propeller, we very quickly figured out that it was a lot cheaper to repair a propeller as long as you don't do it too often than it is to pay for the extra fuel. And it's also less damaging to the environment if you're not burning extra fuel because you have something on your boat that's making it more inefficient.

So these are the things to think through when you see something. Like, you don't necessarily want to get excited about something because something went down. You need to figure out why because I can be in the office getting all excited we're saving money on fuel only to realize -- which, hopefully, I would figure out myself since I also do the accounting for the sales -- that we're saving so much money because we're not selling anything and, therefore, there's no need to go out in the boat and get oysters.

And that's another thing, too. If you see a measure that you're looking at that's going in a direction you don't want it to go, you need to figure out why. Sometimes things just can't be helped. So let's say, for example, all of a sudden the profits for our company are going down. And when you look into it, you realize, "Oh, man, we're spending way more money on buying oysters than we normally would." But then when you look into it further and you find out that there's not as many oysters available or there was a lot of die off on a lot of the different farms, that means you have to spend more money because there's a lower supply. You have to spend more money in order to be able to access those oysters. So those are the types of things that can't be helped. You need oysters to sell. Sometimes you have to pay more money because the oysters are just not there otherwise. So those are a few things to kind of think through. Just don't assume that because a measure is going in the wrong direction, that it's necessarily a bad thing overall. It could be something that just can't be helped right now.

Choose Measures that Lead to Positive Behaviours and Results

And the other thing to be very careful of when you're setting up these measures is that you don't accidentally give people incentives to do things in a way that are not helpful. So, for example, if you want to go back to the weight loss discussion that we had before, you might say, "Oh, I want to work out for an hour every day." But maybe it would actually be more efficient to work out for 20 minutes every day. Because if you're just kind of putting in time during the hour but you're not really working that hard, you're doing some stuff but not you know really going at it, you could check off the box, "Yeah, I spent an hour in the gym", but maybe half the time you were talking to the person next to you, just kind of going slow on the treadmill. Whereas if you'd just taken a run in and really went at it for 20 minutes, you could actually have better results doing that.

Another example would be if you had a situation where the loan that you have is based on the amount of receivables that you have coming in, the amount of receivables that are showing in your books, how much money people owe you and still have to pay you. That could look like a good measure on the surface but what happens when a whole bunch of people pay off what they owe you all at once and your receivables -- how much people owe you overall -- drops? Somebody would look at that and say, "Well, you don't need... you don't qualify for as big of a loan because your receivables are lower." But that makes people not want to collect the receivables. Because every time you collect money that people owe you, that means you risk reducing the amount that you have access to for the loan.

Or, to add further complication, if you have a seasonal business, you might have really high receivables and the time of year that you don't really need the money, the extra money that you would get from the loan, but then over time, everybody pays off what they owe you from what they've bought. And you're now in your low season where people aren't buying nearly as much as you did before but you're also in a part of the season where you need to access those funds. Then what do you do? You can't sell more and increase what people owe you for what you've sold because it's the wrong part of the season to be selling stuff. But you also need to access that loan. So that just disincentivizes people to collect those loan payments. Or, if you are shady, some situations that we've heard about in the news, people will inflate their sales or inflate how much people owe or enter in sales that are in the future but date them to today in order to increase the amount of money that's owed in those receivables in order to continue to be able to access that loan that's dependent on how much you have owing to you as a company.

But you want to be very careful that when you create the measures that you're trying to use to say, "Okay, are we doing the things that we need to do day to day in order to achieve the target", that you don't accidentally make the measure something that will cause other issues in other ways. And that's really easy to do. Sometimes you think, "I've set this measure up really well." And then you come to find out after a while that quality is suffering because you've asked people to reduce cost, or that you've asked people to increase quality but they've done it at the expense of a whole pile of money going out the door that you weren't expecting to go out the door.

So, when you're doing your measures, you need to keep that in mind. And, ideally, if you can, try to come up with measures that kind of balance out those risks. You want to have good quality but you don't necessarily want to spend crazy amounts of money to have that good quality. Or you want people to cut costs but not at the expense of the safety of the people who are in your organization working. So that's that great balancing act that you have to have when you're coming up with your measures.

Measure Things with Greatest Impact on Your Targets

So try to think through very, very carefully the main things you need to do in order to hit your targets, like, the things that will have the most impact. Yeah, you might have 20 ways that you can hit your targets, 20 things you can do, but there might be two or three of those that are the best ways to go about it. And by focusing on those one or two ways and measuring them and make sure that you're going in the right direction as much as possible, then you can have a reasonable guarantee that you will hit your target at the end of the year or the end of the quarter, or whenever you've set your deadline for.

Create Your Initiatives

So first you set your target -- where you want to go -- then you set your measure -- how are we going to see evidence early in the year so we can make changes if we have to, that we're on the right track to get to where we want to go? And then once you have your target and the measures that you're going to use to go in the correct direction, then you need to create your initiatives. So the initiatives or the programs or the systems that you need to set up in order to make sure you're monitoring the measures, the leading indicators that will show you you're in the right direction or the training... the initiative might be training in order to get people from where they are right now to the next place. Or it might even be just a project.

Let's say, for example, that you have figured out that you need a different piece of technology in order to accomplish something that you're doing. The initiative might be we're going to switch from this particular program to this other software that will do the things that we need to do in order to accomplish our objectives as an organization.

So, if you're doing a project, some of your leading indicators could be, "Have we determined which new program will fit us best?" And then the next milestone could be, "Has it been set up the way we want it to be set up once we've chosen which one?" And then the third one might be, "Have we completed the training for the people who are going to be using that particular piece of software?" And those can be milestones that you say, "Yes, we've done that. We can see that we're making progress on making that switch. Yep, we've set it all up for our own particular needs. And third, we've trained people and now we're going to implement it." That will be your target: we're going to implement this new software. So those other three milestones -- choosing the new software, setting it up, and getting people trained -- could be your measures that show you're going in the right direction, and then your target will be, "Yes, we are now using the new software."

So there's all kinds of ways to go about this. But you need to be sure that you're measuring the right things and measuring things that will let you know that, "Oops, I'm going in the wrong direction. I need to switch things up" or "Oh good, everything seems to be going in the right direction so we should be able to hit our target." And make sure that you're both measuring the most important ways of getting those things done to go in that direction and doing it in a way where you don't accidentally have unintended consequences for what you're doing. And then set up the things that you need, whether it's the programs, the initiatives, the projects, etc. in order to execute and hit those targets that you're trying to hit.

Create a Dashboard

So you might be thinking, "Alright, I've got my strategy map all set up, I've got the objectives that I'm trying to hit, I've created my targets and my measures and come up with the initiatives that I need. What do I do next?" For me, I would suggest that, firstly, you create a dashboard where you can see all of those measures and targets all in one place and where you can take a peek fairly regularly and say, "How are we getting along?" And that way, you'll notice if something's starting to go sideways and not going in the correct direction before it becomes a serious problem and you're not able to course correct quickly enough to meet your targets.

So we have a dashboard that we use at my company and I update it every day and all the management team can access it anytime they want. And we have the main things that we're looking for in order to make sure that we're on track and, by looking at that, people can get an overall view of where the company is going and how well we're doing. And, therefore, they can make tweaks instead of getting to the end of the year and realizing, oops, maybe we should have done a few more sales because now we're not going to have enough money to buy the oysters we need to grow and sell in the future.

So if you have that dashboard in front of you and you're... you're looking at it regularly and updating it regularly with your measures and targets and seeing how close you're getting to where you're trying to go, then that will always keep that at the forefront of your mind. This is where I'm trying to go, this is how I'm gonna get there. How am I doing on those things?

Roll Your Strategy Out to Your Crew

And then the second thing I would suggest is, yes, you have that dashboard for yourself. But you also need to roll out your strategy to the crew that you're working with, to your congregants, to your volunteers and encourage... like, explain that and encourage them, "Where do you fit in this strategy? And what can you do to achieve these objectives?"

Not everybody who's working in your organization is going to be able to directly affect every part of your strategy map. But by going through the strategy map with them, they should be able to fairly easily pinpoint, "This is where I fit in here. This is where we're trying to go. And by doing these things, I can help us get there."

So when you roll that strategy out to your crew, just walk through them step by step, everything that's gone into the strategy map, and frame it in a way that you're saying, "What part can you play in order to achieve these goals that we've set out for this year? Or this quarter?" Or whatever it is. “What can you do? Where do you fit into this strategy map?”

Managing Change

When you're in leadership, it doesn't take you very long to realize that, unless you're a one-person show, you need other people to help you to achieve the goals that you're trying to achieve for the organization that you're in. You can't do everything yourself. And trying to do everything yourself is just a recipe for either disaster or burnout. So let your crew, let your people help you. Let them come up with their own ways of supporting that strategy. Let them help you even come up with the measures that you're going to use.

It's a lot easier to get people on board with eating healthier if they actually say, "We're going to cut back on our calories by 200 calories a meal" or whatever it happens to be. If they agree to that when you're going through this, then it's a lot easier to keep them on board when things get hard. Because when you're trying to switch directions in an organization, it takes time, takes effort. It's pretty painful sometimes.

So you need to know that you're not just forcing people into change. People don't like being forced into change. I've found that people don't mind change as long as they understand how they're going to do it and they agree that change... changes need to be made. But they are definitely resistant to change if they're forced into it and they don't understand why they have to change and why these particular things that they're doing will contribute to that change.

Your crew may want to create dashboards of their own based on the particular role that they have to play. You may need to start sharing some information with your crew so that they know the information that they need in order to see if they're on track with where the organization is trying to go as a whole with your new strategy.

I sincerely hope that you found the exercise of going through creating a strategy map helpful but, even more so, I hope that you're able to go through the work and sometimes the pain necessary to execute that strategy. There's no point in putting all this work into a strategy and creating a big strategy and then not actually achieving it. But hopefully by thinking through your vision and your mission, your core values, what kind of culture that you've wanted, the strengths and weaknesses of your organization, the opportunities and threats that are outside the organization that you can leverage to your advantage, and then by walking through and making sure all of your objectives in these four areas are connected, that you have a very well-balanced strategy, and that the measures and targets and initiatives that you create will help you execute that strategy and to be able to evaluate how well you're doing on a fairly regular basis so that you can hit the targets and achieve the objectives that you set out before you started. No one said that running an organization is easy. But I sincerely hope that the strategy map is a tool that will make that just a little bit easier by putting that structure in place and thinking through all of these things to make a cohesive whole that makes sense.

On the Next Episode

So on our next episode, I'm hoping to be able to finally nail down my father and have an interview with him about the things that he learned when he was in Divinity School, training to be a pastor, that helped him run an organization, a business and the things that he wished he had known before he started the business that, unfortunately, he wasn't trained to do when he was in Div School. He's always said different times that he learned some skills by training to be a pastor that definitely helped him when he was running his business. But there are other things that he just didn't have time to learn that he wished he had known because that would have made running a business a little bit easier than it was. So hopefully I'll get a chance to nail him down for that interview and have that for you for next week.

And the week after that, we will start a new series on performance management -- how to make sure that you're monitoring how well things are going to take your organization in the direction that you've envisioned in this strategy map. I'm hoping that by going through a series about managing performance that that will help you, especially with that learning and growth perspective of the strategy map, which is the main one that leads into all the rest. By managing that, I'm hoping that it will help you execute your strategy and achieve the things that you've decided that you want to achieve as an organization. So I look forward to being with you again next week.

Thank-you for joining me for today's episode of CEO Pastor podcast. I hope you discovered an idea that you can apply in your unique ministry context. Head over to ceopastor.com for more resources and meet up with me and other church leaders on social media for further discussion. Any questions or suggestions? Email me at podcast(at)ceopastor.com. And don't forget to share, rate, review, and subscribe to the podcast to help spread the word that managing ministry better makes ministry better.

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