How to set Company Objectives?

How to set Company Objectives?

Objectives define specific end results that are to be achieved after taking a set of steps, within a specific time duration. Simply said objectives answer ‘what, where, when and by whom’ – questions essential for reaching the pre-planned targets.

Objectives and Goals are often used interchangeably but there is a slight difference. Most important one being Goals are broader in aspect and not always measurable whereas Objectives are very specific and measurable. Objectives & Key Results (OKR) is a goal setting methodology that recommends setting up objectives at company, team & individual levels.

Companies need a sense of purpose and direction if they want to become successful. Setting objectives helps them maintain a laser focus in their environment. When you have a clear and precise set of objectives, you are halfway through. It keeps you motivated as well as provides a competitive advantage. Your employees have a thorough understanding of what the company is trying to achieve and what is expected of them to support this endeavour.

Before you set company objectives:

Before one can even start thinking about the actual company objectives it is important that the vision is well articulated & communicated to the team. A strong & inspiring vision is always a prerequisite to building a productive & happy work culture.

Vision

The very first thing that a company should do is set its Vision statement. Which is asking itself ‘What’ it wants to achieve in the longer run, what is its raison d’être. The entire foundation of a company is based on its Vision. It may evolve over the years to suit the environment but more or less the underlying set of beliefs remain consistent. Vision statements are normally open to the public, written and referenced in company documents.

In essence, Vision is a long term plan for the company – at least a decade or two.

A Vision without a Strategy remains an Illusion – Lee Bolman

Then comes the strategy. It is the set of evolving techniques & methods which the company is going to rely on to achieve its vision.

Strategy

The top management creates a Strategy to determine ‘How’ it will go about achieving the company’s Vision. This Strategy is an idea about how exactly the team intends to go about it. It documents key principles that the company should follow for understanding the needs of customers, how to deal with the competition, what are the resources that are required, etc.

Strategy is derived from the vision as a medium term targets – the term can range from 1 to 5 years depending on the industry vertical & market environments.

Strategy is a fancy word for coming up with a long-term plan and putting it into action – Ellie Pidot

Vision, Strategy & Objectives

While you set company objectives

Once you have established your strategies, you can proceed further and start finalising your objectives. Timelines for company objectives can vary from a month to a year. This duration is dependent on the company stage, market evolution & technology landscape. A startup may have to set shorter durations ranging from a month to a quarter whereas an established market leader can do just fine by setting the objectives over the year.

However the trick is to make them S.M.A.R.T.

Specific:

Create Objectives that are very specific. The more specific they are, the easier it is for you to achieve them. For example, Objective for the Sales department of the company would be to increase sales by 25% by the end of Q2 FY 2016-2017. This is very specific and gives a clear guidance.

If it said, company’s market share to be increased in the next few months, it wouldn’t have much impact and everyone would interpret it in their own way.

Measurable:

Your objectives should be able to identify exactly what it is you will see, hear and feel when they are fulfilled. They should be broken down into measurable elements. You’ll need concrete end results to prove this.

Attainable:

Are your objectives really attainable? While it is ok to set very challenging objectives, do not set them so high that you fail to achieve them. Make sure you have sufficient resources to ensure this, prepare yourself accordingly and you are good to go.

Relevant:

Are your objectives worth all the efforts you wish to put in them? You need to make sure they are relevant and meet all your needs as expected. They should be consistent and with other objectives so that collectively they are forming the bigger picture.

Timely:

If there is no deadline to the objective, there will be no hurry or focus to get it done. It doesn’t necessarily have to be very rigid, you can keep them realistic and flexible. Maintaining a sense of urgency helps you to track your progress more effectively.

In addition, the important factor is that there are no more than 3-5 objectives at the company level. Else you are sowing seed for spreading your teams’ efforts too thin. Same goes about key results for these objectives – no more than 3-5 per objective.

While the vision & strategy should be articulated at the leadership level, it is important that company objectives take into account inputs from the company as a whole. Thus it is advisable to finalise them at a company wide meeting, where there is a possibility of an open discussion.

In this manner, when a company aims for objectives that are all inclusive chances are – it will not only have achieved those short term objectives but also that it has moved further in its quest to achieve its grand vision.

What other aspects do you think are necessary while defining company objectives? Let us know in the comments.

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