[ Back Home ] A Note On Setting Objectives An ideal business objective is short and to the point. It is quantifiable and measurable. It has a specific time when it is expected to be achieved. For example: Our objective in manufacturing is to decrease costs an average of 10% by December 15, 2004. The committee’s objective is to decide on an MIS system and vendor by September 22, 2004, and to have an MIS system up and running by March 15, 2005. Other characteristics of a good business objective are: clear meaning; no clichés, for example, we aim to improve our delivery service to our customers; reachable, even if an objective is a stretch objective, it should be realistic and attainable. Department objectives should be aligned with overall corporate objectives (umbrella objectives). Objectives should be well thought out; they should not be frivolous wish lists. The time frame for an objective should be the planning cycle, which is usually one year. If a long term objective is developed, it should be labeled as such and should not exceed two or three years. Long term objectives should be listed separately from annual business objectives. It should be noted that it may be difficult to fit completion dates on long term objectives, and even more difficult to attach specific strategies and implementation to these objectives. Longer term objectives may be covered better under vision. A company’s performance or a department’s performance is measured by how well it does when compared to the objectives the company or department sets for itself. It is a measure of outcome that helps an organization keep an eye on whether or not it is achieving what it set out to achieve. There is an old business saying that states, “You cannot manage what you cannot measure,” or put another way, “What gets measured, gets done.” Objective setting is one of the best tools for helping a company set out strategy and action for achieving success. If you have mediocre and vague objectives – such as, lower costs, improve competitiveness, increase revenues – you will have mediocre and vague performance. The achievement of business objectives should accomplish exactly what the company wants to achieve. Objectives must provide guidance about where a company or a department wants to be. An analysis of objectives set and objectives achieved is often labeled a gap analysis. Once a gap is identified, it is then up to management to come up with plans to narrow or close this gap. This could mean adjusting the objectives or the strategy used to reach the objectives. Realism is important when setting objectives. An old Navajo philosophy, “You need to be in harmony with reality,” is important to keep in mind when setting objectives. Objectives need to be developed for all units in an organization, even at the individual level. Objectives can cover a wide area – financial, marketing, manufacturing, human resources, and technology. Setting objectives is a cornerstone for developing strategy (how to achieve the objectives), and action (what has to be done to put the strategy into action), such as activities, investments, and budgets. This is the to-do list.   Objectives or Goals? What is the difference between an objective and a goal? None – objectives are generally used for business planning, and goals for personal planning. Many people use objectives and goals to mean the same thing.   [ Back Home ]