Last week we reviewed Section One of the business plan – ‘Strategic Direction’. Today we move on to Section Two – ‘Objectives and Goals’.
Well-chosen goals and objectives point a new business in the right direction and keep an established company on the right track. When establishing goals and objectives, try to involve everyone who will have the responsibility of achieving those goals and objectives after you lay them out.
To help you better understand how you can set goals and objectives, you first need a good foundation for what the two are. A goal is a broad primary outcome. A strategy is the approach you take to achieve a goal. An objective is a measurable step you take to achieve a strategy.
Countless examples are available to demonstrate the action but we have just pulled off Intel’s line of Core processors:
Goal: Make our Core PC microprocessors a category leader in sales revenue by the year X. Strategy: Persuade buyers that our Core processors are the best on the market by associating with large, well-established PC manufacturers. Objective: Retain 70 percent or more of the active worldwide PC microprocessor market, according to accepted CPU benchmark report.
So you see, together, goals and objectives form the road map for your company’s future. Without them, you risk making wrong turns and wasting precious energy.
Goal and mission
Now we will come back to your strategic business plan for the next three to five years. Still using this timeframe, look again your Strategic Direction and then develop objectives that will have wide-ranging impact on the growth of your business.
The first approach to specifying goals and objectives begins with a review of your company’s mission statement. Using key phrases from your mission statement to define your major goals leads into a series of specific business objectives.
Let us take an example. ‘Word for Word’ is a secretarial services company that provides word-processing and computer-graphics services for companies. Our mission is to ‘build a reputation’ among local business as the ‘most knowledgeable’, ‘most reliable’ and ‘friendliest’ word processing resource in the country. Notice the words in quotes. From ‘build a reputation’ you can make one goal – ‘Increase brand awareness’. Under that goal, you can build two objectives. (1) Create customer referral bonus programme. 2) Begin monthly newsletter.
From ‘most knowledgeable’ you can create another goal – ‘Enhance staff expertise’. Under that goal, you can make two more objectives. 1) Schedule regular training seminars. 2) Have all staff certified (by internal examinations).
From ‘most reliable’ you may create the third goal – ‘Improve customer service’. Filtering down you can construct the relevant objectives. 1) Recruit two new employees. 2) Install new job-tracking software. You can also create goals and objectives from ‘friendliest’.
If your mission statement doesn’t suggest a list of goals, you may want to re-evaluate it to see whether it really captures what your business is all about. Make sure your goals are always measurable. By establishing metrics goals, you can gauge your progress and recognize immediately when your efforts are going off track.
Most goals define positive outcomes that you want your business to achieve but sometimes you also want to set goals to avoid pitfalls and to eliminate a few weaknesses. To help develop goals that cover all the bases, use the acronym ACES as you tick through the following key questions:
Achieve: What do you want to attain in the future? Conserve: What do you want to hang on to? Eliminate: What do you want to get rid of? Steer clear: What do you want to avoid?
In this mode of thinking, if we talk of goals and objectives, ‘under achieve’, for example, we may list the following objectives: website up and running with at least 25 strong sense of employee morale and different storefronts enthusiasm, successful second round of venture capital staff expertise.
‘Under conserve’, develop strong sense of employee morale and enthusiasm, staff expertise.
‘Under eliminate’, unnecessary duplication of efforts, the competition. ‘Under stay clear’ of, a financial crunch, losing valuable staff to other direct or indirect competitors.
We can also create a set of business goals: Revise business plan and financial projections. Review storefront vendor acquisition strategy. Streamline management decision-making process. Redesign employee benefits packages. Develop a new-recruit training curriculum.
One more way to think about business goals is to consider each of the four categories into which most goals fall:
Day-to-day work goals are directed at increasing your company’s everyday effectiveness. They may involve things like order tracking, office management or customer follow-up. As a start, name at least one change that you can make in your day-to-day operations that will make a difference in your overall effectiveness. Write it down in the form of a business goal.
Problem-solving goals address specific challenges that confront your business, such as low employee morale or quality of service issues. List the two biggest problems that face your company and then write goals that can solve them.
Development goals encourage the acquisition of new skills and expertise - whether for your employees or for yourself -and whether you run a small company or operate as a freelancer or an independent contractor. So, how about formulating at least one development goal for yourself or your company?
Innovation goals help you find new ways to improve the following: the products or services that your company offers, how you market your company and how you distribute and deliver what your company sells. Can you identify any innovative approaches that could make your business more effective in the future? If so, formulate an appropriate goal.
Profitability goals set your sights on where you want your bottom line to be. When all is said and done, profit is the No. 1 goal for profit-making companies. For non-profit companies, this goal may take the form of how many dollars in contributions you plan to raise or a goal for increasing the company’s endowment.
The three goal-setting approaches, explained above, will lead to a respectable list of goals — maybe more goals than is practical for one business plan. Select the five goals that you think are absolutely, positively essential to your business success.
After you decide on your list, fine-tune each goal, using these guidelines: Keep each goal clear and simple. Be specific. Be realistic. Don’t be afraid to push yourself and think big. Make sure that your goals are in sync with your mission.
In strategic business planning all parts of the process are important but perhaps the most important part involves developing your strategic, corporate goals, objectives and business goals. Much of the analysis you do in strategic planning is designed to help you develop achievable goals that reflect the business realities in your sector and environment.
(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at firstname.lastname@example.org)