Previously, we explained how a clear statement of vision can guide members of the organization. This over-arching statement of principle can add clarity and meaning to regular activities. Now is the time for reviewing vision and mission statements, and as well as reviewing and setting goals and objectives for the coming new year. If developed now, the new goals and objectives will be in place and communicated throughout the organization so you can hit the ground running after the holidays.
In a previous example, a vision statement expressed an overarching principle of top notch customer service. Excellent customer service may be the most fundamental aspect of your business, so it is appropriate to state it in your vision. Obviously, though, you have to pay attention to more than just customer service as you flesh out your strategic management plan.
Goals Help Set Priorities
The goal-objective process is fairly straightforward, but it is generally accepted to be a key to effective strategic management. Set goals for your business or department that is important for success. In our earlier example, the vision statement focuses on customer service, but it could be that another key to success is introducing new products. One goal should simply express that, i.e. “Introduce new products every year.” Note that the goal is not really specific and fairly open-ended (When have you reached that goal? Never, really. Every year is a new year and new products have to be introduced. So this fits perfectly with our definition of goals).
Goals should be set throughout the business: with high level goals set by top management, and then goals set within each department or segment: design, sales, customer service, production, shipping, and so on. Theses goals should align directly with, and ultimately lead to fulfilling, the high level goals. Then goals can be set for groups or individuals within the department that align with and fulfill department goals.
Departments and groups can develop additional goals outside of those that connect directly to higher level goals, but it is important to focus on what is important; you don’t want to overwhelm your team. The key, however, is to set goals that ultimately fulfill organizational goals. This is an important element in having different parts of an organization pulling together toward common purposes.
Objectives Put Substance into Goals
After setting a general goal, specific objectives are then established that guide activities and provide metrics to know whether or not you are reaching your goal. So if the goal is to introduce new products, objectives state more specifically what you are going to do. Objectives must be set considering the needs of the organization, its capabilities, etc; You may be familiar with the acronym SMART in terms of objectives, but let’s review what it means:
S – Specific: Very unambiguous, explicit targets
M -Measurable: Performance can be measured to compare with targets
A – Attainable: The capability is there to reach the targets
R – Relevant: Relates specifically to stated goal
T – Time based: Expressed or measured during a specific time period
(Note: Some refer to the R in SMART as standing for Realistic, but to me that seems redundant with Attainable, so I prefer to use Relevant, meaning that the objective should align directly with a stated goal.)
So, if the goal is to introduce new products, the SMART objective might be to introduce two new products in the calendar year 2008. It is specific and we can measure how well we perform. This specific number should be set given the organization’s needs and capabilities, so it is reachable. It also relates directly to the new product goal, and it is over one year’s time. So this objective meets the SMART criteria.
This process not only focuses the attention of the organization on high priority activities, but it also creates metrics that can be measured and monitored in order to see how well the organization is performing. It assists in creating “dashboard” systems that displays performance, and allows managers to recognize when things get off-track in time to make appropriate corrections. For example, if half the year is gone and the design department has not made one new prototype, then the goal of two new products each year is in danger if corrective action is not taken
