Business goals are the milestones that an organization hopes to achieve. They give an indication of what success looks like, providing a big picture view of the desirable results. Goals are usually achieved by the setting of more measurable objectives that both individual team members and whole teams can hope to meet in order to reach overall goals.
This article will define business goals and business objectives and explain the difference between the two. It will also discuss both short-term and long-term business goals and why each is important.
What Are Business Goals?
Business goals represent an ideal to aspire to. Business goals can be set for individual employees, managers, teams, departments, divisions and even the entire organization.
Business goals need not be specific. However, they represent broad outcomes that the company wishes to realize.
Though possibly considered vague, business goals are important for the following reasons:
What Are Business Objectives?
Business objectives are the measurable steps or actions that will be undertaken in order to ensure that the business goals will be met.
If goals are the high-level ideals, objectives are the specific, tactical measures that carry out the goals.
Indeed, there are often several, if not dozens, of objectives that the employee, manager or team must meet in order to reach a goal.
Examples of business objectives might include:
Indeed, objectives usually revolve around a metric that the individual or team must meet within a specific amount of time. Employees generally understand why objectives are set up in this manner, and thanks to CRM, project management and ERP enterprise software, they can access and measure their performance on a regular basis. This reduces misunderstandings and surprises.
Which Comes First: the Goal or the Objective?
Chicken or egg: Does an organization set its goals first or its objectives first?
It might seem intuitive to set a goal first: increase sales, improve patient outcomes, deliver outstanding customer service, develop best-in-class software.
However, sometimes the setting of objectives first can lead to the setting of a goal. If the objectives cannot be met, then the goal cannot be achieved. Further, the objective can further define the goal.
For example, a company might not know how to articulate a goal of satisfying customers. “To satisfy customers” sounds weak and difficult to rally employees behind. However, in working on specific objectives for the customer success team, especially involving improving satisfaction ratings, the new goal can now be articulated as, “To improve customer satisfaction and deliver an outstanding customer experience.” While still vague, the “improve” and “outstanding” portions were discovered via considering objectives.
Short-Term Business Gand How To Set Them
Though goals are often big-picture, they should still have a time frame attached to them. It’s important for organizations to set both short-term and long-term goals, as these will directly impact the setting of short-term and long-term objectives for employees.
Short-term goals are goals to be met usually within a few months, perhaps a quarter, or sometimes within a few weeks.
Here are a few guidelines to set short-term business goals:
Determine Whether the Goals Would Be Realistic Given the Resources at Hand
While they’re top-level, goals still need to be mapped to objectives to be assigned to individual employees and teams. As sensible as the goal might be, if it cannot be translated to an actionable objective within a set amount of time, it won’t work.
Ensure That the Goals Align With Those of the Executive Team
A manager or department’s goals might not necessarily be a priority for the overall company. Make sure that the goals would be approved by senior management, if that level of approval would ever be involved.
Too Lofty? Consider Making It a Long-Term Goal
If the goal would not be achievable in the short term, don’t throw it out. Consider it for the setting of long-term goals (see below).
Long-Term Business Goals and How To Set Them
Long-term goals are of course those that would be longer than the few weeks or months of the short-term goals.
These goals can have a greater and longer lasting impact on the business’ annual performance when set properly. Here are a few best practices when setting long-term business goals:
Roll Up the Shorter-Term Goals Into a Single Larger-Term One
When in doubt about how to develop a long-term goal, simply take short-term goals and roll them up into a mid-year or annual (or longer) goal. However, keep seasonality or expected fluctuations or disruptions in business performance in mind when developing the long-term goal.
Ensure That Data Collected on Business Performance Can Be Available for the Longer Term
While it’s the objectives that are more tactical and based on data collection in order to measure performance, such data is still important when developing goals, whether short- or long-term. Ensure that systems are in place for the continuity of data and that systems are compatible and available throughout the duration of the long-term goal so that objectives can be met within that time frame.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce and the Internet of Things.
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