By Gary Dean, managing director of strategic consultancy, The Truffle Pig Consulting Co.

In the first article of 2023 I started to explain some of the key tools that I believe are needed to develop business with a strategical intent; so, for the next few months, as promised, let me try to support you more with the ideas and tools that I have and often do still use.

Opening this, we are back on the theme of objectives and goals, this time with a very nice tool that’s both challenging and fun to build.

SMART objectives may be something you are familiar with, and they underpin many of the approaches I try to convey. So, what are these objectives – what do they mean?

SMART is namely, Specific, Measurable, Attainable, Relevant and Time-limited. These points are all about being clear and focused, a theme that you will hear me restate all the time.

Strategic development requires the essential tools of SMART objectives to allow short and long-term goals to be set and realised. They should incorporate all the things we hear about such as mission, vision, aims, values, beliefs, and the principles of the organisation within a framework that are beyond nice words and rooted instead very much in solid action.

With the development and then implementation of SMART objectives we can avoid the warning Drucker gave us that ‘institutions mistake good intentions for objectives’ and instead replace this rhetoric with rock solid clarity.

By doing your homework and setting SMART objectives which are complete in their detail they automatically become precise. With precision, your plan turns from a blunt instrument to the tip of a Samurai sword.

Remember when using this tool that the ‘attainable’ aspect is a critical one, not only should your organisation be able to hit these targets with a reasonable amount of effort, but the best outcome is to overwhelm them.

Be honest.

If you believe they put a man on the moon, then you could say JFK was living SMART objectives when he promised to do so even when most thought it was fantasy, because he knew that it was attainable in advance when the population had no clue.

Drucker noted that ‘management by objectives works if you first think through your objectives…90% of the time you haven’t’; so please don’t kid yourself about SMART objectives, spend the time to get them right and keep them real.

This doesn’t mean do not be bold of course, bold is best. Indeed, I am a strong advocate of the BHAG concept; that’s Big, Hairy, Audacious Goals by the way, this is your ‘core ideology’ that you hold on to even as the markets you are in flex and change in the fluidity of the business environment.

Successful companies are visionary ones that develop cult-like cultures where everyone buys in to the BHAG. Have a go now at articulating and writing down yours.

Next month I will spend more time on company culture and how to build a business as a community. It’s a key strategy tool, so look out for this in March.

Finally, here’s something a bit heavier to you thinking.

Some might think this next tool is more for the finance team, but I sincerely believe if you are either leading the organisation or are in a senior role that influences its direction, then you need at least to understand EVA – in this case short for meaning Economic Value Added, in your business (not the laminated interlayer).

This tool looks at the return of capital invested which is basically always dependant on two key factors; the degree of risk in, and the extent of long-term debt in any investments made.

Put another way, in relation to building our tool kit, to manage your strategy to success you must be able to afford to do so. Affordability levels become clear only when measured against the sector risk and financial risk especially compared to your competitors.

Because every business is different as is every business sector and segment, doing the maths regarding the EVA expectations will help ensure you don’t run into the sand with a great strategy which is unaffordable.

If the maths is a little complex get some help to crunch the numbers because having a handle on the EVA expected outcomes significantly avoids your plans running out of steam. Asking for help doesn’t mean you are weak, it means you are wise.