A successful business relies on its management team to provide direction at all levels, from floor supervisors to middle management all the way through executive management. Goals and objectives usually start at the top, with the executive director or CEO, and are passed down to each level of management, gaining more specificity with every step. In order for every level to have success, the person at the top needs to have a strategic vision for the company and clear steps on how to get there. As long as that vision exists, the rest of the management structure will make sure it translates into tasks, projects and programs.
Executive Directors and Officers
It all starts with the person at the top. Executive Director is the term usually used in nonprofit entities; CEO (Chief Executive Officer) is usually used in for-profit organizations. Both describe the highest-ranking person in the company. This person is responsible for making the policy decisions that will benefit the organization at the highest level.
An executive director reports to the board of directors to develop and implement a strategic plan, which for nonprofits, often involves balancing limited budgets with operational needs. A CEO reports to their board of directors (who report to the shareholders) on the company’s earnings status and the operations of the business as a whole. Overall, their job is to develop, then help filter downward, the plan for the organization.
Executive Director Goals
How does an executive director or officer set their goals? It’s important to consider a long-term vision for where the company will be in 5-10 years, but it’s equally important to look at a short-term (12-18 month) vision as well. Deciding where the organization should go and then dividing it up into manageable interim steps is a good place to start.
Goals and objectives have to cover all of the areas the executive director is responsible for, not just operations or the bottom line. Goals should include specific projects and programs that are key to success; targets for communication of information both internally and externally; strategic development and investment back into the company; systems, IT and communications upgrades; ensuring legal compliance throughout the organization; and additional concerns depending on the specific company or nonprofit.
These executive goals and objectives examples should be constructed using a system of a general objective (for example, "Grow the business") and some key factors or results that will be used to measure whether the objective was met (Hit $3 million in profit, reduce operational costs by 5%, etc_)_. The general objectives tell the rest of the organization what’s important; the key results are measurables that explain how the executive director intends on reaching those goals. This helps the goals to filter down through the organization while staying true to the CEO’s vision.
Executive Director Objectives
For example, an executive director’s list of objectives for a nonprofit might include the following within a financial category:
- Increase money on hand:
In addition, the executive director should also include non-financial-related goals for the organization, such as:
- Improve logistics and communications:
CEO Goals and Objectives Examples
A CEO’s objectives are likely to be similar, except they would be in relation to the company’s budget and profits:
- Grow the business:
These objectives are then fleshed out with more information, adding in the specific programs or projects to be focused on, as well as the methods that are intended to help complete these. The executive director or CEO doesn’t have to dig down too far into detail – these are meant to be big-picture goals to show the organization the right direction.
Executive Managers and Goal Setting
The next step in developing organizational-wide goals is to filter the CEO’s written plan down to the executives. These individuals, called senior management, executive management or upper management, are the team directly under the executive director or CEO, and they are tasked with helping to make the day-to-day decisions about the company to follow the director’s vision. In a nonprofit, the role is similar: a management team that follows and supports the vision for the organization.
How do executives and executive managers set their goals? Their task is to take the goals and guidelines presented, and interpret them in a way that’s meaningful for the departments they oversee. This is where management starts hashing out the details.
Interpretation of Goals
For example, looking at the nonprofit financial goals from above, an executive in charge of the grants and funds team could interpret the goals as:
- Increase money on hand:
This breaks down the initial vision into objectives that can clearly be understood by the managers and employees within that department. The executive’s job here is to provide this set of specific objectives, but also to keep them reasonably obtainable.
Making SMART Goals
The way to ensure goals are met is to keep them SMART:
- Specific: Use as many numbers or percentages as you are willing to commit to. Clearly define the goal.
- Measurable: Ensure there’s a metric by which success can be measured. Define what success means within this context.
- Attainable: Be sure this objective can actually be met with the resources on hand. “Stretch goals” that stretch too far can actually be demotivating for employees; managers should choose goals that are challenging, but attainable.
- Relevant: Be sure the goal, and its metrics, are relevant to the overall business direction. Make sure the actions that will be taken align with the organization’s vision.
- Time-Bound: Choose a target date and, if relevant, interim target dates to check in on progress.
SMART goals come into play heavily in the next step, which is filtering the company’s objectives down from executives to management. For small businesses or nonprofits, these layers of management may not exist, which simplifies the entire goals structure. Either way, the endpoint is the same: a collection of SMART goals that can be assigned to individuals to complete as specifically defined projects.
Role of Middle Managers
In larger businesses, executive managers usually have a team of managers of their own to head up individual departments. This team is sometimes referred to as middle management, for their position between the individuals and supervisors on the line and the executive team. For example: the Sales, Accounting and Purchasing managers may all report to the Chief Financial Officer, an executive manager who reports to the CEO. Nonprofit organizations usually do not need this level of complexity in their leadership structure, though larger organizations might have team leaders who then feed up into their version of the executive management team.
How do these managers set their goals? Again, they take the goals from their manager and continue to interpret them into more specificity. The SMART goal system really comes into play at this level; it’s more important than ever for this layer of management to ensure goals make sense. These managers are the ones who will determine the actual pieces that will be used to build the picture the CEO or executive director has set.
Middle Manager Goal-Setting
For example, using the CEO’s objectives from above, middle managers will respond differently depending on their departments.
The Sales department is likely to expand this goal as such:
- Grow the business:
Whereas an Operations manager might think this way:
- Grow the business:
Setting Expectations for all Employees
In each case, management now has specific goals that can be given to their employees to execute. The expectations are clear and concise, and it’s clear how each individual project aligns all the way to the top objectives set by the executive director or CEO. Each goal is then defined between the manager and their employees to ensure all five pieces of a SMART goal are clearly detailed. This helps even the “lowest” employees on the line understand how their contributions directly affect the CEO’s vision, which keeps them motivated and engaged with their work.
Evaluating the Executive Director
Within a business, the CEO’s performance is evaluated by the board of directors, usually annually, based on the value provided to the shareholders and the value of investment back into the business for future growth and success. With a nonprofit, it can be difficult to come up with ways to evaluate the executive director’s performance, since there’s no direct tie to profits, revenues or shareholders. A nonprofit’s board of directors will be equally concerned about the effect activities have had for their cause as much as the financial side.
BoardSource (previously the National Center for Nonprofit Boards) recommends that both the board of directors and the executive’s direct reports work together to provide a written review for the executive director on their performance, annually. Their tool focuses on four key areas to evaluate: the annual performance goals set the previous year; core competencies that have been defined as important for the leader of this organization; leadership qualities, including dedication to the cause; and specific accomplishments and challenges faced within the year. These annual evaluations should be paired with frank discussions regarding compensation, as nonprofits face a number of complications with regards to director salaries and transparency.
It’s the executive director’s job to look at their organization and have a vision for its purpose and future. Being able to translate this concept into a collection of goals and objectives that embody this vision is incredibly important. As seen above, these objectives cascade down through the organization, gaining specificity as they go; that’s why it’s so important to be sure the original set of goals and plans is truly pointing the organization in the right direction. In order to make sure this happens, the executive director or CEO has to think outside the financial box and create meaningful objectives that will improve and develop the organization as a whole.
- "Strategic Development: Methods and Models"; Robert G. Dyson, et al.; 1998
Danielle Smyth is a writer and content marketer from upstate New York. She has been writing on business-related topics for nearly 10 years. She owns her own content marketing agency, <a href="https://www.wordsmythcontent.com/">Wordsmyth Creative Content Marketing</a>, and she works with a number of small businesses to develop B2B content for their websites, social media accounts, and marketing materials. In addition to this content, she has written business-related articles for sites like <a href="https://www.sweetfrivolity.com/">Sweet Frivolity</a>, Alliance Worldwide Investigative Group, Bloom Co and Spent.