What are strategic objectives?
Objectives set out what a business is trying to achieve. They should be based on organisational strategy and be aligned with corporate vision, mission, and values. Objectives may be set at the level of the whole organisation or at divisional, department, team, or individual levels. Lower-level objectives and project objectives should ideally relate to one of more of the corporate level objectives. Leaders and managers need to get the process of setting objectives right, as inadequately formulated objectives can cause confusion or lead individuals, teams, or the whole organisation in the wrong direction. The process of objective setting can seem intimidating, but this is not necessarily the case. It can be as simple as sitting down with the departmental objectives and considering how these objectives can be met. The answer to this question will lay the foundation for setting specific objectives for individuals.
There are two approaches (SMART & OKR) that I would recommend considering when setting business objectives. It is up to you to decide what approach works best for you and your business. Pick an approach and stick to it.
SMART Objectives
The SMART acronym is a tool designed to help organisations and individuals set objectives in an effective and productive manner. Specific and measurable objectives define the success of a project or initiative. Achievable and realistic objectives engage and motivate individuals. Time-bound objectives ensure that all stakeholders agree time scales for the achievement of objectives. Both Peter Drucker (1955) and G.T.Doran (1991) have been credited with developing the model, although it is difficult to be certain whether either of these two were really the first people to use the term ‘SMART’ with reference to objectives.
The best practice is that you should have no less than 3 and no more than 7 objectives. Less than this, your strategy needs more thought. More than this and you may be trying to do too many things.
Some examples of objectives that follow the SMART format include:
- To achieve a 5% market share by 31st December 2022
- To generate a revenue of £580,000 by 31st December 2022
- To achieve a gross profit margin of 25% by 31st December 2022
- To increase customer lifetime value by 3% by 31st December 2022
Objectives and Key Results (OKR)
Successfully used by tech companies such as Google & Intel, the Objective and Key Results approach to planning and goal setting is an alternative view to the traditional SMART model that helps to link measurable goals with trackable outcomes.
The Objective in an OKR defines what you want to achieve as a business in order to meet your overall vision. The Key Results in an OKR are the specific targets that need to be hit in order for you to achieve that objective.
To make this clear, I will provide you with some examples of OKR’s in relation to a simple marketing plan.
Objective 1: improve brand awareness
- Key result 1: obtain 10 new earned placements in media outlets
- Key result 2: publish 5 new blog posts to drive 3000 new unique website visitors
- Key result 3: increase number of page one search results from 14 to 22
- Key result 4: lift awareness score for our brand from 42% to 60% in our demographic
Objective 2: reduce cost of marketing spend
- Key result 1: Stop all TV advertising campaigns
- Key result 2: reduce team size from 20 to 18
- Key result 3: reduce content writing budget by 8%
Exercises
- Sit down and start to set yourself some goals, for your business and for your personal
life. How would you reward yourself for achieving them? What are the consequences for
not achieving them? How will you track your goals? - Write down your ideal end goal for one of your business ideas. How would you like
to exit the business? Is it your long-term business?
