In a series of blog posts, we will walk you step-by-step through the process of proposing, defining, and implementing strategic initiatives. In the first post, we’ll answer, “What is a Strategic Initiative?”
A Strategic Initiative is an investment of resources dedicated to accomplish an organizational objective. Unlike strategic objectives, which tend to be phrased as broad goals, strategic initiatives are projects that include a scope, budget, and start/end date. As we’ve mentioned before, these three characteristics are critical to differentiating between strategic and operational initiatives.
In the Balanced Scorecard (BSC) framework, strategic initiatives are the primary method by which strategy is executed. While objectives and key performance indicators help point you in the right direction, initiatives are where the rubber hits the road.
According to BSC best practices, each strategic initiative must be linked to an objective. Establishing a relationship between each initiative and objective will ultimately help illuminate fundamental assumptions about your strategy. For example, if an initiative fails to close an objective performance gap, then the team should ask whether or not they are investing in the right initiative. Perhaps the initiative team has poorly implemented the initiative? Or maybe the initiative’s impact is not yet apparent?
Regardless of the precise cause of poor objective performance, the relationship between initiatives and objectives is a powerful tool to open deep discussion around your Balanced Scorecard. Some initiatives will drive the performance of multiple objectives, and some organizations may elect to link an initiative to multiple objectives. If you choose to link an initiative to multiple objectives, I recommend that you establish a primary objective linkage to indicate the initiative’s principal intent.
Initiatives are often decomposed into more detailed project plans consisting of 5-10 milestones and tasks. Milestones and tasks outline accountability for key deadlines within an initiative.
If the full project plan for an initiative is very complex and involves hundreds of tasks, I do not recommend incorporating that level of data into your initiative reviews or templates. Instead, keep initiative project plans at a high level that can be easily shared with and understood by leadership teams.
Lastly, if the Balanced Scorecard is a new framework with new language for your organization, it may be worthwhile to reconcile any differences with existing terminology. For example, if the word “initiative” overlaps with how your organization uses “project," then a glossary of terminology may be needed to clarify the new approach. Oftentimes operational and strategic project management get lumped together in organizational processes, which can muddle the BSC language. Going the extra mile to clearly define your terms makes a huge difference in having a good conversation around strategic initiatives.