If you don’t know what you want, how do you plan to get it? Starting a business is great, but if you don’t know why you’re doing it, or what your objective is, you may be stalled before you even get running. No matter what industry you’re in, business goals and objectives are essential for finding success. And no matter how established a business is, this always remains true: objectives and goals must be updated and evolved as time goes on.
What Is a Business Objective?
The dictionary says the definition of objective is “a thing aimed at or a goal.”
Goals are short-term aspirations in business. Monthly sales totals, weekly productivity expectations; these are goals. They’re essential, too, because they form the roadmap for businesses to achieve their objectives.
But making a business objective means setting a longer-term path for your business. Objectives are what a company aspires to over, say, a year.
Why You Need a Business Objective
When you've got somewhere to go, you don't hop in your car unless you know how to get there, right? It's the same thing with a business objective. It's your destination, a place you want to reach.
Ask yourself, in the coming year, what do you want to achieve? How will you define success at the end of that year, or further down the road?
There’s no one answer for this; every objective is unique to each company and its market.
How to Determine Your Company Objectives
When determining your company objectives, it's a great idea to use the "SMART" method. This acronym has all the key points in setting good business objectives and goals.
For goals to meet the SMART standard, they should be realistic and achievable. This means:
- Specific – Have a clear idea of what you want to achieve.
- Measurable – By having a measurable objective, you’ll know if you were successful.
- Achievable – Have a realistic objective that can be met in the time you have, with the money and resources at your disposal.
- Relevant – Set an objective that makes sense for the company, ensure it’s relevant to where you need to go, for example, aspire to hire more staff because it means delivering better service and having greater reach.
- Timely – Have an end date in mind, but be sure it’s a realistic timeline for the objective.
Say you own a bakery chain. Perhaps your overall objective for the next year is to continue your success. But this isn’t a SMART objective, as it’s not constructive enough to provide you with a strategic roadmap. Breaking it down into each characteristic of a SMART objective is a good start. So, for example:
Specific: Each of the eight stores will improve revenue for the coming year.
Measurable: Each store will improve revenue by 10 percent against current sales in the next year.
Achievable: In increasing marketing efforts and focusing on direct sales on top of store sales, all eight stores will increase revenue by up to 10 percent during the next year.
Relevant: Increasing sales by 10 percent will improve profitability while making jobs more secure in each of the eight stores.
Timely: By the end of the year, all eight stores will achieve a 10-percent growth in revenue.
SMART objective: Over the next year, my eight stores will each increase sales revenue by 10 percent through better marketing and launching direct sales outreach to gain new corporate clients who can be serviced outside of the retail stores, sparing the need to increase shop staffing.
The Perks of Having Objectives
When a company has employees, objectives and goals help everyone to understand where the company is headed and what parameters will be used to judge success. This can improve teamwork and collaboration. It can also give a solid platform for a rewards system that encourages productivity and achievement.
Long-term objectives are an excellent framework for analyzing progress while meeting goals.
Some Examples of Business Objectives
What a business is, where they are, who the competition is; these all help how to determine company objectives. There are countless examples of what could be an ideal business objective, but here are some common ones to consider:
Improving Productivity: By making your company more productive and streamlining efficiencies, you could see benefits in many areas, like customer satisfaction, profitability and even employee happiness.
Compliance: In the face of new regulations or technology, a worthwhile company objective could be simply bringing the company into compliance and upgrading technology throughout, which may require training and other new systems put in place as strategic goals toward the compliance objective.
Organizational Culture: It could be that you’re experiencing undue absenteeism or poor morale, or perhaps it’s simply time to change things up, but an objective of changing organizational culture could mean a managerial shakeup, implementing a remote working model and other new tactics to reorganize the company.
Sustainability: Making a company more sustainable can begin with reducing paperwork or the kind of light bulbs used and carry all the way through to operational efficiencies. It would require considerable goals and collaboration between employees and managers.
Risk Reduction: Many companies face risk in their day-to-day world, whether it's brokers who advise on buying and selling commodities or it’s a long-haul shipping company who needs to manage the health and attentiveness of their drivers. Reducing risk could benefit everything from the bottom line through to brand reputation.
Building Brand Loyalty: The easiest way for a business to grow its profits is to increase brand loyalty in existing customers. It costs less to win existing customers over than it does to find new ones, so creating ways to make a customer base more loyal could have a huge payoff for most companies and may require many different tactics to achieve.
Expanding Operations: Eventually, there’s only so much revenue improvement that can occur in companies before they expand operations to attract new growth. It’s a big objective that requires many goals to be set along the way – from finding space to hiring new employees.
Roadmaps for Reaching Objectives
It’s important to have goals and objectives that are realistic and achievable for your business. You’ll need to set deadlines, not just for when you want to achieve the overall objective, but for each goal that must be met along the way. For example, if you're expanding operations, the end objective is to have the new warehouse open in a year. But before that can happen, the warehouse will have to be found, kitted out for the business in question, staffed and given the go-ahead by relevant authorities, all within specific time frames.
These goals are actions required, and they’ll all need planning and a point on the roadmap to be reached. A final inspection won’t just happen for the warehouse to open, you’ll need to schedule the inspection, which means setting that in motion long before it happens. It’s important to know all the actions required for achieving an objective's success and then breaking those down into steps.
Then it’s down to delegation. Who’s responsible for all those steps and actions? Delegate jobs to the right personnel and be sure they understand their time frame and responsibilities. Then, keep them motivated and on track.
Of course, they’ll need the resources to get those jobs done. This may mean money; it may mean allocation of time or space or perhaps it means having the right contacts. Be sure they have what they need so they can get cracking and make it happen.
Then it’s just a matter of diligence and persistence, hopefully. After all that, is it mission accomplished? What was your desired outcome? In the case of opening a new warehouse, did it all go according to plan? Did operations get started on schedule, and did they go smoothly?
Staying the Path with Objectives
Now that the objective has been identified and goals are set, it’s important to keep the focus alive.
Do this by having regular reminders. Make sure your whole team gets notified about little accomplishments that have occurred toward the end goal. Keep them on target by way of setting milestones for their tasks and having occasional team meetings.
Keep them informed as you decide on review points to follow up on where everyone is. Let them know when progress reports are expected. What’s not going according to plan, and what is? Look into team-focused software solutions like Slack, which can help you stay abreast of developments throughout the chain. When there are issues, have people speak to them early so others might pitch in and brainstorm solutions. By making the entire team responsible for overall success, they’ll all feel a vested interest in meeting the objective.
Of course, you can make employees more motivated to achieve big objectives if you give them something to fight for, like promotions, time off, pay raises, bonuses, prizes or commissions.
When they finally reach the objective, be sure you acknowledge their individual and collective roles in bringing success. Make sure they know they’re valued and appreciated because this will help to re-focus them when the next objectives are set. After all, achieving objectives together is the ultimate in team-building exercises.
A Case Study: Chipotle
A business objective isn’t some vague statement about your organization, which can sometimes sound like a vision or mission statement. It’s a specific and tactical objective that is measurable.
Consider the food chain Chipotle. They have a mission statement that’s simple: “Food with integrity.” This peppers everything they do – from who supplies their product through to how healthfully meals are prepared. And it has served them well as they grew their business. But it’s not an objective.
Unfortunately, Chipotle had issues with tainted foods, and now their objective is to win back their lost customers while gaining a new audience. To do so, they plan to massively increase their digital culture – pushing online and app-based ordering, improving restaurant efficiencies so employees can be more focused and streamlining operations by closing under-performing restaurants. They’ll introduce a “happy hour” to expand peak times and launch a “love and loyalty” marketing plan.
The long-term objective? More than doubling revenues to $10 billion annually.
But to get there, they have set goals that form their strategy: Increase customer loyalty, close 65 under-performing stores and increase efficiency while reducing waste. They will digitize the ordering process so employees can focus on food prep rather than order processing while seeking other ways to innovate.
So, as Chipotle demonstrates, goals equal a roadmap to achieving an objective.
Nothing Is Written in Stone
Objectives and goals set the path upon which your company walks for the next year or more. If things change, don’t be afraid to re-evaluate your goals.
Perhaps things are going better than you could have imagined. Don’t hesitate to aim higher, then. Maybe you’ve come up against some roadblocks, and your goals are now out of reach. Adjust your aim along the way, then. Leaving yourself and your team under the pressure of trying to reach a goal that’s now improbable will be a morale crusher. Instead, always keep the SMART mantra on goals and objectives in mind and keep things realistic and achievable in the time frame you’ve got. After all, even if you fall a little short, you’re still ahead of where you started, and that’s worth something, too.