IV. Objectives and Goals-Fourth Step of Strategic Planning & Management:

 

IV.               Objectives and Goals: Fourth Step of Strategic Planning and Management:

 

After SWOT analysis and setting vision/mission statement, you are well aware of the strengths, weaknesses, threats and opportunities of your organization. Now you have to retain and polish your strengths, overcome your weaknesses, avail your opportunities and convert threats into opportunities. Now that you have some clarity about the big picture of your organization. It’s time to break your activities down into achievable steps.  In this section, develop 3-5 objectives/goals or priorities that you can focus on this year to help take you a few steps closer to the vision.  Keep them somewhat high level and try to make these SMART:

S – Specific

M – Measurable

A – Achievable

R – Realistic

T – Time-bound

Difference between aims and goals:

Goals and objectives are interchangeable terms frequently used in strategic planning and management. There is a slight difference between these two terms. Goals are destinations and objectives are the actions needed to arrive at that destination. Objectives are measurable and there may be multiple objectives leading to your goals and aims. Objectives are specific and short term and goals are long term targets. If your overall goal is to get a more rewarding job, for example, you may have a set of objectives that help you to achieve this. Such objectives might include sending letters to companies you want to work for, brushing up on interview techniques and learning skills or obtaining qualifications that would increase your employment prospects. Objectives are like a road map, giving you direction as to what you need to do and when you need to do it to achieve your business goals and aims.

 

More about Objectives:

Objectives refer to specific, measurable ends. They are identifiable goals towards which all organizational activities are directed. They are the end results of the organization’s operations. Objectives are the specific targets or standards against which actual performance can be measured.

"It is a future target or end result that an organization wishes to achieve." Planning is meaningless if objectives are not framed. Objectives serve as a guide to planning i.e., planning is directed towards specific objectives.

Role of managers in stating organizational goals and objectives

Managers determine the basic objectives of the organization (one single direction of the organization), promote proper planning, they are a source of motivation for the members of the organization, provide an effective mechanism for monitoring and evaluation (provide a basis for the formulation of standards).

The objectives of the organization result from the manager's needs. The role of the manager is to identify priorities and concretization of goals. Objectives must be: Specific, Measurable, Ambitious, Realistic, and Timely (SMART).

 

 

Your objectives and priorities checklist:

•          Did you limit it to 5-10 things?

•          Are your objectives SMART?

•          Do they support your Vision and fit in with your Mission?

•          Are you clear how your values will support you in delivering these things?

•          Are your activities spread out across the year?  Have you checked the timing of them against other commitments and known patterns in your business?

•          Does it feel exciting to see what you could accomplish in the next year?

 

How Should I Structure Strategic Objectives?

The main advice here is to keep things simple.  Strategic Objectives should be easy to remember and should be understandable by everyone within the organization.  That means no jargon and keeping them to one sentence long.  You can add more detail of course, but you should be able, to sum up, what you want to achieve quickly and simply.

I suggest a structure as follows:

Action + Detail + Metric + Unit + Deadline

In other words:

“Expand our international operations into 3 new markets by 21st December 2020.”

 

Starting off with a verb forces you to be specific about what you’re trying to do.  If you possibly can include a metric and a unit – do so.  It will help to keep you focused and honest when it comes to tracking your progress.   Having a deadline works in much the same way.

A nice thing about using this structure combined with a cloud-based strategy platform is that you can do some pretty cool reporting on your goals – such as having the system analyses your 'Action' words to give you a flavour of how you're approaching your strategy (Aggressively? Defensively? Etc.)

 

Principles in setting up SMART Goals and Objectives

The “how” of setting up SMART goals and objectives is as important as each acronym in the process? The principles of the goal-setting theory are:

• Clarity: There has to be absolute clarity in the goal and objective setting process as well as the end objective so that task-based or milestone work isn’t hampered by ambiguity.
• Challenge: If the objectives become repetitive or aren’t stimulating enough, boredom sets in. To avoid this, the SMART objectives need to be challenging enough.
• Commitment: This goes without saying that lack of commitment is a recipe for disaster as it derails goal and objective management.
• Feedback: Periodic feedback is a prerequisite for effective management of objectives and goals. People operating without feedback do not know if their efforts are moving the project towards completion in the right manner and can get easily disoriented and disinterested.
• Task Complexity: Complex tasks take precedence over menial tasks because the people doing them aren’t motivated to work on something that is below their intellectual capability. Hence it is important to find that right blend into SMART goals and objectives where the tasks are complex enough to complete but stimulate the brain of the person completing the task.

 

SMART Objectives and Goals Examples:

Let us take an example to understand how SMART objectives and SMART goals help save our time. Image an organization that works for removing plastic bags and similar waste from the entire city has objectives and goals defined as:

“Our goal is to make the entire city clean and free of any plastic and plastic waste”.

This goal is a little vague. However, if the objective and goal were rewritten as,

“As an organization, we aim to clean the city and make it free from any plastic waste in the next two years with the help and support of our volunteers.”

The second time when the goal and objective were rewritten, it has a certain timeline, specific activity is mentioned, who will be helping the organization is clear and what they want to achieve is quite certain.

In this manner, people who are associated with the organization know what their tasks are, what is the timeline in which they need to achieve it. This helps avoid any confusion and activities go on smoothly without hesitation.

Advantages of SMART goals and objectives

• They are not vague: Since SMART goals and objectives are extremely procedural, each milestone and feedback is planned and monitored in complete detail. This mitigates the factor of uncertainty.
• Missed work is easy to track: Each person is given a certain responsibility and hence when work is not completed, it is very easy to troubleshoot the gaps in delivery. This makes everyone extremely accountable and any loss of work is easy to track.
• Goals are divided into small achievable objectives: SMART goals have an end goal but SMART objectives are further divided into bite-sized milestones. Hence, no matter the scale of the end goal, it is very easily achievable.

Features of Objectives:

1. Challenging:

Challenging goals require innovative and creative organizational members. An organization with an aspiring workforce accepts the challenging goals. They do not find the routine objectives attractive.

2. Attainable:

Goals, though challenging, should be attainable. People work hard to achieve challenging and innovative goals but goals should be within their skills and abilities. Managers should, therefore, frame goals which can be achieved within the constraints of physical, financial and human resources.

3. Specific and measurable:

Goals can be tangible and intangible.

4. Time limit:

Goals must be achieved within a specified time period. Organizational performance should be reviewed and assessed at regular intervals so that goals can be achieved within the specified time-frame.

5. Supportive:

Goals at lower levels should support the higher-level goals, short-run goals should support the long-run goals and goals of different departments should also support each other.

6. Hierarchy:

Objectives at different levels of the organization form an ends-means chain or a hierarchy where objectives at one level provide an end and a means for attaining objectives at a higher level.

7. Priority:

At a point of time, an organization has multiple goals and, therefore, goals should be arranged in the order of priority. This helps in optimum allocation of scarce resources over different objectives.

8. Flexible:

Objectives are flexible. Depending on the internal and external environmental variables, they can be changed to ensure the organization’s survival.

Importance of Objectives:

Objectives provide the following benefits to the organization:

 1. The basis for managerial functions:

Objectives provide the basis for all managerial functions. Planning, organizing, staffing, directing and controlling are directed towards organizational objectives.

2. The basis for organizational existence:

Objectives provide foundation or legitimacy to business organization. An organization will not come into existence if it has no objective to achieve. Objectives enable the organization to make its profile (identify its strengths and weaknesses) and relate it with the environmental profile (opportunities and threats). 

3. The basis for various types of plans:

Different types of plans like policies, programs, procedures etc. are directed towards organizational objectives.

4. Standards of performance:

Objectives provide standards of performance against which actual performance is measured. Organizational performance is directed towards objectives. Objectives, thus, provide the basis for control.

5. Unity of action:

Objectives provide unity of action. All organizational activities related to all departments (production, marketing etc.) are targeted towards organizational objectives.

6. Motivation:

Objectives at one level are a source of inspiration and motivation to achieve goals at higher levels.

7. The basis for coordination:

Objectives coordinate the efforts of people in different departments. Individual, sectional and departmental goals are coordinated towards corporate goals.

8. The basis for decision-making:

Decision-making is goal-oriented. Objectives frame the areas for discretion within which organizational decisions can be made.

9. The basis for organization structure:

The organisation structure is designed keeping in view concepts like departmentation, a span of control, delegation, decentralization etc. All these activities have to move towards a common direction. Framing realistic and attainable objectives play an important role in this regard.

Hierarchy of Objectives:

There is generally a hierarchy of objectives viewed as the means-ends chain. Objectives at different levels of the Organisation form a hierarchy where objectives at one level end in themselves and means for the attainment of objectives at a higher level. Together objectives at all levels form an integrated chain. 

Levels of Objectives:

In a hierarchy, goals/objectives are generally framed at three levels:

1. Top-level: Strategic goals,

2. Middle level: Tactical goals, and 

3. Lower level: Operational goals.

1. Strategic goals:

These are the formal goals framed by top managers and address issues related to the Organisation as a whole. These goals ensure survival and successful working of a business enterprise.

According to Drucker, there are eight major areas in which organizations frame strategic goals. These are:

Market standing, innovation, human resources, financial resources, physical resources, productivity, and social responsibility and profit requirements.

2. Tactical goals:

Each department sets specific goals to promote overall organizational goals (strategic goals). Tactical goals are the goals of specific departments framed by middle-level managers. While strategic goals are general in nature, tactical goals are specific. They are stated in measurable terms.

 

3. Operational goals:

“Operational goals are targets or future end results set by lower management that address specific, measurable outcomes required from the lower level.”

These goals are framed by lower-level managers for divisions or sub-units of each department.

Key areas of activity of Objectives:

• Market goals - Objectives related to the activity of the organization in the market, such as increased market share, entering new markets
• Effectiveness objectives - Objectives related to the economic sphere of the organization, such as an increase in profit, the rate of profit from equity
• Financial goals - Objectives relating to the creditworthiness, cash flows, liquidity of assets
• Welfare goals - The objectives regarding an organization's employees welfare
• Prestigious and environmental goals - Objectives related to public relations and social responsibility.

 

Five Performance Objectives in Business

There are typically five performance goals and objectives of an organization that indicate business success.

Quality: One of the most important organizational objectives to strive for in business is quality. Your reputation for producing quality goods and services is what will draw customers to continue doing business with you and recommend your company to other potential customers.

Speed: If you've ever waited in line to purchase food at a fast-food restaurant or had to wait an insufferably long time to receive something you ordered online, you understand the importance of speed as one of the objectives of strategic planning for business success.

Dependability: It's one thing to be quick and good. It's another to be consistent and keep your promises. Customers expect the delivery of products and services as promised. If you can't deliver consistently, they go somewhere else.

Flexibility: A business must be able to respond to changes in the market and customer requirements. Flexibility may be the one factor that gives you a competitive edge over your competition.

Cost: This is another of those goals and objectives of an organization that can affect business success, both externally and internally. Your customers expect your rates and prices to remain consistent and reasonable, and you need to keep them as low as possible while maintaining quality and consistency of service. From an internal perspective, you need to minimize the cost of your workforce, equipment, vendors and raw materials so that you can make a profit and grow your business.

 

Conclusion

SMART objectives and Goals are an important part of a company’s growth. It is essential that the Managers and Directors of Marketing, Sales, Human Resources and many other areas, are fully involved in defining these goals

For all, the growth of the company also implies personal growth. The only way to achieve this is by having order, and structure that clearly defines the objectives.

Do not waste more time doing actions that won't yield the desired results. Start defining your SMART objectives and give your team enough reasons why they should get down to work as soon as possible. Giving them a good goal is part of the motivation everyone in the organization needs. Remember increasing team productivity is always favourable and does wonders to achieve overall growth of the organization.