Running a business is far more difficult and success is less likely when you operate on a “hit or miss” foundation. Planning is the key, and while a constantly changing business environment ensures you can never predict every likely scenario, a good plan is a road map that can keep you moving forward no matter how many detours you need to make along the way. Crucial parts of your plan are strategic and operational objectives. While both are separate entities, each depends on the other and is necessary for success.
Success in business often comes by defining goals and objectives using a layered, top-down approach. Vision and mission statements make up the broad top layer, providing employees and customers a view of the big picture and information about ultimate company goals. Next comes business strategies that bring a mission statement to life with long-term objectives and steps for reaching your ultimate goal. Last but certainly not least are operational objectives that break strategies into a series of specific steps, each of which helps your company move closer each day to achieving your vision and ultimate company goals.
Strategic objectives normally cover a medium to long-term time frame. While this is subjective and can cover any time you choose, this often means a span of about three to five years. Strategic objectives establish your priorities. Because priorities are so important for long-term success, strategic objectives are unlikely to change over time unless volatile business conditions make small adjustments necessary. In contrast, operational objectives, the “workhorse” of your business plan, normally cover a shorter time of about one year.
Successful business strategies include five essential elements. Each must be measurable, specific, appropriate, realistic and timely. Together, these five elements help set priorities that provide focus, direction, motivation and keep everyone in your company working toward a common goal. For example, a strategic safety objective can be to maintain an injury-free workplace, and a strategic employee objective can be to achieve and maintain a turnover rate of less than 5 percent. Operational objectives outline the action steps your company will follow to make strategic objectives a reality. These can include steps such as the development of a workplace safety program, incentives for meeting safety goals and the creation of employee training, development and incentive programs.
Strategic and operational objectives work together to help you make good business decisions in times of uncertainty or a changing business environment. A look at your current position in relation to a changing environment and your ultimate goals can make the development of contingency plans easier and less emotional. Setting aside time to plan for possibilities and create alternative strategies and steps can even become part of your standard operating procedures.