Objective setting – A new dawn, a new dollar

Definition of Objective:  “A specific result that a person or system aims to achieve within a given time frame and available resources.”

The start of a new year is a great time to reflect upon the year that has passed as well as think carefully about the year which is now starting.  By asking your-self questions like “what were my objectives for the past year?”, “did I achieve them?” and “what could I have done better/differently?” is always a good place to start because setting the right goals and objectives creates a road map to success.

Without objectives or goals it is almost impossible to create a strategy or understand the reasons for the success or failure of a business.  Even a successful business will struggle to know why they experienced success and despite having a general idea of the steps they took to reach it, without written goals they will not be able to confidently reproduce their steps identically or consider future objectives for even greater success.

What is an Objective?

In general objectives are more specific and easier to measure than goals, they are basic tools that underlie all planning and strategic activities and they help define the nature and purpose of your business. They also serve as the basis for creating policy and evaluating performance and they are the ends to be achieved.  Objectives are often confused with tactics or strategy but always remember that goals means “where” you want to go and  tactics or strategy mean the action plans that you will adopt to get there (or reach your objectives).  It is also worth mentioning that the objectives of one group might be the strategy of another.  For example,  top management might set the objective of launching new products, this will be the strategy of the production department.

Objectives come in different types depending on you’re your business.  Public sector organisations like the Inland Revenue set objectives for service such as processing customer tax returns within a given timeframe whereas, a private sector organisation might set objectives for customer satisfaction and handling orders within a given time period.  Some examples of business objectives include minimizing expenses, expanding internationally, or simply making a profit.

A Reminder of SMART

Most business people have heard of SMART but it never hurts to remind ourselves that this simple acronym is highly effective.  If you can ensure your objectives are SMART you will have a much greater chance of success:

S          Specific

M         Measurable

A         Acheivable

R          Realisitic

T          Timely

Now What?

It is important that once you set your objectives you make sure managers and employees know what the company goals are, as good visibility will allow for quicker execution of the companys’ strategy by enabling management to allow proper resource across various projects.  Managers can focus their staff on the companys’ most important goals and reduce task redundancy throughout their team, while employees will have a greater understanding of how their efforts will serve the business goals.  Also, by communicating the company’s goals to employees you will establish a true pay-for-performance culture therefore providing the groundwork for linking reward systems with individual and/or team performance.

Don’t forget to monitor for results along the way.  Should you find that your map is not working or that you are off course you can modify, change and improve your objectives.  You will still benefit as you have the basis of a good plan that just need some additional or different components.

And finally, over time you will see that your goals display the wisdom of your strategy, plans and efforts and you will be able to take a management by objective approach (MBO) to making your company an even greater success !!