Your assurance will come from being systematic. Assurance is the key to looking the boss in the eye, and getting the objectives right is the foundation for assurance. In this step you re-generate unit objectives by asking big questions, systematically.
Before opening up the big questions, you may want to warm up by noting your version of what you think the objectives should be, based on your business planning to date.
You can find unit objectives under four headings: Benefits, Costs, Dangers and Capabilities.
By way of being systematic, write down answers for these four big questions.
- Benefits: What does the organisation expect the unit to deliver in exchange for the cost of maintaining it?
- Costs: What costs does the organisation incur in maintaining the unit?
- Dangers: What unintended consequences could arise from the unit’s activities (and are best avoided)?
- Capabilities: At the end of the plan period, which unit capabilities need to be as good or better than they are now?
The answers to these questions are your unit’s objectives.
You don’t need precise answers. Just try to cover all the key points in responding to each question. Write down as many useful answers as make sense.
It is important to focus on what your organisation really needs, whether or not you know a way to measure the extent of your success. You might be tempted to think about what measurements are possible, and to give priority to ‘objectives’ that correspond with practical metrics and reportable indicators. As a middle manager, you might even be pressured in that direction.
At this stage, and throughout the risk work, you need to understand what it is that really matters, and not only about what can be measured. The risk work that follows has its own way of ensuring that the objectives are clear and meaningful. Measurements have their place, but you first need to know the outcomes that matter.
For a work unit, benefits, costs, dangers and capabilities beat existence and reputation.
You might wonder whether it’s an objective that your unit survives into the following year. That isn’t the big concern that it might appear.
A work unit in an organisation, must deliver what the organisation needs (the benefits), and must meet the cost, danger and capability objectives. Each of those requirements are far more important than survival as a unit. Units come and go for all sorts of reasons. The benefits, costs, dangers, and capabilities always matter.
In the same way, it is not automatically a good or bad outcome if:
- The unit is expanded or reduced in size.
- An activity within the unit receives more or less funding and management support.
Developments like that may reflect good or bad unit outcomes. They might not have anything to do with outcomes, or with how well your unit has been doing. In any case, they are not the reason why the unit exists, so they do not belong among the unit objectives.
Risk conversations are often made less than Clear because of words such as ‘reputation risk’. ‘Reputation risk’ is a particularly unhelpful concept because it can refer to at least two different things:
- The possibility that the organisation’s credibility or ‘reputation’ will be damaged, which is taken to be important in itself.
- The possibility that reputation damage will compromise the organisation’s other goals, such as market share or investor confidence.
The difference is in whether maintaining reputation is a fundamental objective, or simply necessary to achieve the real objective. A government organisation might sensibly regard reputation as fundamental in itself. A profit-motivated company might be more interested in reputation as a driver of long-term profits. The government organisation will have an objective to sustain reputation. The for-profit company will not, but will note ‘reputation’ as an area in which to look for effects on its long-term profit objectives.
Your unit is neither a government organisation nor a for-profit company. From the point of view of the work unit inside the organisation, ‘reputation’ issues are best addressed by understanding why ‘reputation’ matters in the business plan, and what ‘reputation’ has to do with the unit.
In responding to the big questions, you might usefully end up with one or two objectives that reflect the real concern about ‘reputation’. The objectives for your unit might look like these examples.
Danger: The unit does not allow the organisation’s public reputation and credibility to be damaged by anything it does, or allows to happen.
Capability: The unit maintains the organisation’s trust as the provider of X services.
As a unit manager, you don’t need to spend time understanding the possible effects of organisation-wide reputation damage on the organisation’s strategic objectives. You can just accept that protecting the organisation’s reputation is part of your role. To do that you would recognise a unit objective similar to the ‘Danger’ example above.
The Capability example may be important if your unit is trusted by the rest of the organisation, and that trust has a tangible value, separate from the actual services the unit provides. An internal audit department is an obvious example.
You may never have a constructive conversation with the boss about the big questions. In that case, you work out some of the answers for yourself. You may be less focused on good and bad outcomes for the organisation, and more focused on the unit outcomes that will have good and bad consequences for you. The answers to the big questions will be similar, though perhaps not identical.
Example draft objectives for a payroll unit.
Payroll Unit – objectives for the coming year
Benefits: What does the organisation expect the unit to deliver in exchange for the cost of maintaining it?
1. Get employees paid correctly
2. Comply with union pay agreements
3. Pass the annual financial statement audit
4. Introduce quality control
Costs: What costs does the organisation incur in maintaining the unit?
5. Minimise unit salary costs
6. Minimise payroll ICT costs
Dangers: What unintended consequences could arise from the unit’s activities (and are best avoided)?
7. Fraud by employees or payroll unit members
8. Fraud or cyber-attack by outsiders
9. Too much unrecorded absence
Unrecorded absences: Employees being absent but being paid as though working. Includes unrecorded short absences (cigarette breaks) through to personal time on official travel, part-days with no leave record, whole days, to incorrectly recorded weeks of known extended absences. The employee may let the boss know about the absence, but the absence is never formally recorded for payroll and HR purposes.
10. Confidentiality breaches
Capabilities: At the end of the plan period, which unit capabilities need to be as good or better than they are now?
11. Maintain capability to pay employees
12. Move payroll to the new system as identified in the strategic plan
Main article on Risk in work unit business planning