What is a strategic goal?

Spoiler: it is not a three-year KPI

Ask an owner, executive or CEO: “What is the company’s annual goal?” You get EBITDA, revenue, margin, NPS or a vague “scaling”. Ask again: “the strategic one?” — and you hear the same thing, stretched over several years.

A strategic goal is almost always understood as the same KPI, only three to five years out.

For a long time I could not see why. We say we are talking about strategy, and the conversation almost inevitably slides into financial and business metrics. Mature managers then declare, in all seriousness, that in today’s VUCA/BANI world long-term planning is impossible, so “strategy is dead” and only tactics and operational optimisation remain.

The issue is not the “death of strategy” and not the complexity of the environment. It is a basic mismatch in what people put into the words strategic goals. As long as they mean extended KPIs on a three-to-five-year horizon, any talk of strategy will slide toward BSC, OKR and metric tables.

Properly, it is not a number but a formulation of a future business configuration: role in the market, field of play, value-creation model and key capabilities.

Why does the question of what strategic goals are matter?

Once, in a strategy cycle, a shareholder took a volitional decision: remove all text and leave a “strategy” consisting only of the subheading “Top-level goals” — Revenue, Market share, EBITDA. The rest of the board did not push back (they should have). Need I say that six months later, at the next board meeting, neither the executives nor the independent directors could answer whether there was progress on strategy — or whether everyone had simply worked on operational efficiency?

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Bad strategic goals: when metrics replace configuration

Search for “strategic goal definition” and the first results are typical confusions: strategy as a long-term action plan; strategic goals as specific, measurable, time-bound results, usually expressed as sales volume, market share, customer satisfaction — often financial and operational indicators stretched over three to five years and called strategic.

Strategy is not an action plan — that has been covered elsewhere. What matters here is that strategic goals are still treated as concrete metrics, often financial and operational.

Then the familiar script unfolds: balanced scorecards, goals across four perspectives, lists of eighty metrics — all presented as “metrics for strategic goals”. But these are financial and business metrics that share with strategic goals only one trait: forced long-term horizon. They are stretched to three to five years and declared strategic, while in substance they remain operational KPIs cascaded upward from the annual horizon.

Even BSC rules say scorecards are built after strategy, to support execution — not to create strategy. Yet top teams speak of “strategicness” only in terms of what they can project into the near or far future from operational indicators.

You may object that the term is non-normative and everyone is free to define it. Fine — but then why call three-year operational goals strategic? Why not “three-year operational (financial) goals” and call things by their names?

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Why strategy is seen differently: the managerial lens

There is another reason the conversation slides into KPI — managerial mindset. In the Leadership Pipeline model, the move from functional to business manager is not more headcount but a shift in scale of thinking: from optimising one function to accountability for the whole business.

A functional manager owns a area’s budget, deadlines and KPIs. In that lens, strategy naturally looks like another vertical with its own goals and metrics — not a question of business position but another execution plan.

Business-manager thinking starts where the leader owns P&L, priorities and trade-offs between functions. That transition is one of the hardest: it requires seeing the business whole, not through one function. Until it happens, strategy remains “how to hit the plan”, not “what position we are building”.

Practical implication: if the top team discusses strategy in the language of functional KPIs, the issue is often not weak methodology but functional-level thinking dominating the room. The CSO’s job is not to impose a definition but to help the team shift optic — from managing KPIs to discussing business configuration.

Why it is harmful to call operational metrics strategic

The metrics themselves are not bad. Revenue, margin, EBITDA, NPS, productivity — all matter. The problem starts when they are given the status of strategic goal and pulled to the top instead of formulations of future position and configuration.

First, we turn the state of the system into its goal. Operational metrics describe how an existing configuration feels: current model, portfolio, processes. A strategic goal should describe what configuration must be built in principle. When “goal” = a number, any configuration counts if it delivers the number — including cutting investment to inflate year-end EBITDA.

Second, we replace a question of choice with a question of improvement. Operational goals ask what to improve in what already exists. Strategic goals ask what must change in the construction of the business itself.

Third, we remove strategic refusals. A real strategic goal almost always implies refusal: not to enter one market in order to enter another; not to keep an old product contour if you intend to live in platform logic. Operational KPI rarely requires leaving a field of play — only improving numbers on it.

Fourth, decomposition runs from result, not from intent. Once a number sits at the top, the tree of goals and initiatives builds around “what to do to reach X”. Real strategy starts where decomposition runs from the decision of what business we are willing to become and what capabilities to assemble for that.

Fifth, the strategic horizon becomes fake. Time alone does not make a goal strategic. Stretch an operational metric to three to five years and it stays operational — only longer. You get a three-year KPI table still without an answer to what configuration of business is meant to live under those figures.

Strategy can exist on a three-year horizon even without a detailed plan and metrics — if there is choice of field of play, future position and logic of winning.

Non-strategies: when the metric becomes the centre of the document

A typical pattern from reviewing hundreds of strategies, including listed companies:

“Our strategic goal is revenue of 10 billion by 2029”

— followed by a profit-formula tree (assortment, price, channels, efficiency) and five to fifteen “strategic projects” with budgets. Neat, connected — but a tree from net profit or EBITDA, not strategy.

Typical bad formulations where “strategic goals” hide indicators, wishes or slogans without future configuration:

• “Increase EBITDA by 150 billion rubles by the strategy horizon.”
• “Reach EBITDA margin above 7%” or “increase revenue by 20%” as the main strategic goals.
• “Become market leader”, “scale the business”, “raise NPS by 10 points”, “become a full-service player.”

Convenient management document — but in my strategy-quality rating such papers reliably score as non-strategy.

A bad goal substitutes configuration with a number, slogan or project list. It does not answer:

• what is the main obstacle to realising the intent?
• in which game is the company trying to win, and from what is it refusing?
• through which choice does it expect advantage?
• what business configuration is it building, and what transformation does that require?
• which capabilities must appear that do not exist yet?

There is only an expanded scheme of “how to organise the current business and improve its indicators”. That is managing the operating model — important, but not strategy.

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What a strategic goal actually is

A strategic goal is a formulation of a future business configuration: role in the market, field of play, value-creation model and key capabilities. For its sake strategy makes its choices and its refusals.

It names not a number or a project list but who the company must become and in what logic it intends to win — so that choice has meaning.

A strategic goal is not equal to strategy: strategy is wider and includes the choice itself and readiness to revise it. It is not equal to KPI: KPI shows whether the company is moving toward that configuration — it is not the configuration. KPIs exist because the operational level finds it hard to operate abstractions at business level and above.

Goal and strategy are not sequential (“first one, then the other” — as many respected courses still teach). They form together around diagnosis of the situation, but play fundamentally different roles in time and substance.

Goal and choice form together: diagnosis breeds a hypothesis about future configuration; first strategic decisions test and refine it — until choice and goal are mutually aligned.

How goal–strategy differs from plan

The strategic goal answers: what business do we want to become. Strategy answers: what choice we make to win in that configuration. The strategic plan answers: what exactly, by whom, with what resources and by when will be done. Goal is orientation; strategy is logic and set of choices; plan is a manageable execution programme.

Good strategic goals

By the definition above, a good strategic goal names business configuration — and implies refusals.

Illustrative compressed examples from public materials (not full verbatim strategies):

• Netflix. Become a global subscription entertainment service for mass audience: build value on streaming access, catalogue and personalisation — and stop treating DVD delivery as the core business contour.
• Microsoft under Satya Nadella. Become a platform of productivity and cloud services for corporate clients, where Windows is one product, not the centre of the business; assemble capability to build world-scale cloud infrastructure and not bet on a proprietary mobile OS.
• Dyson. Remain a premium engineering player in appliance categories dominated by mass standardised products; win through own engineering and direct customer access, not price competition in the mass market.
• Element. Become a leading supplier of electronic components and modules on mature technology nodes — from 65 nm — for industries with long cycles; grow production and engineering base for that contour, consciously not investing in the most advanced process nodes.
• Moscow Exchange. Move from pure infrastructure for professional participants to the end client’s entry point to the financial market: develop platform access and product contour, not limit oneself to B2B infrastructure services.

The difference between good and bad goals is not ambition or horizon. The first answers: what business to become. The second substitutes configuration with its test or a wish — and reduces strategy again to a plan of indicators and initiatives.

Formulating such goals is not an analytical procedure but managerial courage: to admit that data about the future do not exist in principle — only diagnosis, intuition and readiness to refuse part of the familiar world for a new one. Where data end, insight begins; and it, not a metric table, lies at the base of real strategic choice.

Insight keeps the goal from two traps — big slogan without diagnosis and “small motor skills”, where the goal shrinks to current resources. A good strategic goal is not a compromise between ambition and realism but the result of insight that already sees the needed configuration and the scale of break with the present.

One-line test: if the formulation can be replaced by “grow X%” without loss of meaning, it is not a strategic goal. If a project list suffices without choice and refusals, there is probably no strategy next to it either.

When we finally speak the same language

Then it becomes simpler: strategy is not a plan and not a KPI tree but intent about the company’s future position and capabilities to win — or at least to endure.

Strategic goals are formulations of that future position and capability set. Metrics and BSC are the language of measuring movement toward those goals — not the goals themselves. OKR is a system of execution and focus that helps implement strategic choice — it does not replace it.

Take the document with “strategy” on the cover and remove all numbers. Does an answer remain to what business you want to become and through which capabilities you intend to win — or only a list of projects and KPI?

How is it in your company? Are strategic goals formulations of future position and capabilities — or still “operational metrics for three to five years”, neatly arranged in BSC and OKR?

And by replacing strategic goals with operational or financial metrics, are you still looking for the main problem in execution?

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