As a business owner, you can’t make plans for the future and simply “hope” to achieve them. Taking action is the only way to improve your business and having clear and measurable objectives is the only way to take effective action. Therefore, during your strategic planning sessions, as you’re mapping out how to increase the value of your business, you must set long-term objectives in your business that can actually be achieved. However, many people struggle to set objectives that will drive them toward their long-term vision.
00:35 – Setting Strategic Objectives
02:15 – What are the Objectives of your Business?
04:00 – Having a Time Frame
06:22 – Only set 3 Goals at a time
08:39 – Make one Financial
09:26 – The SMART Filter
10:19 – Be Specific
12:05 – Make it Measurable
13:06 – Make it Assignable
13:52 – Make it Realistic
14:03 – Is it Time-related?
14:42 – Objectives must align with VMOSTA
18:00 – Goals & Objectives should be set by Management
19:29 – Write your Objectives down
According to Merriam-Webster’s online dictionary, an objective is “something toward which effort is directed.” Synonyms for an “objective” include an “aim” or a “goal.” Whenever I work with business owners, I often ask the question, “What is your goal?” And what I’ve discovered is that it’s a difficult question for people to answer. Sure, they have an idea about the direction they want to go; they have a vision but seldom do they establish proper long-term objectives in business.
During the planning of the strategic planning process, you should conduct a SWOT analysis. Through identifying the strengths, weaknesses, opportunities, and threats you gain a greater perspective of where your business is in relation to where you want it to go. The information gained during your SWOT analysis is valuable and should be put to use when identifying the objectives you must set to reach your long-term vision. These objectives should be clearly defined and measurable because they are going to be the path to effect change for your organization’s future.
Perhaps one of the greatest impacts designating objectives has for a business is it helps you and your team members identify a central point of focus for the future. Setting objectives helps you stay on your course. So how do you set objectives? More than that, how do you set achievable business objectives?
It’s been my experience that too many things can change within a timeframe longer than three years. Sure, you’ll experience ebbs and flows in your business over the course of three years but not nearly as many as you will beyond that time. Therefore, when you set your business objectives, set ones you know you can accomplish within three years.
While I’m on the number three, whenever you’re setting objectives, use only three goals. Now, you may think that’s a little crazy, but have you ever heard of the power of three? Think about it for a second. The number three is just about everywhere; it’s not accidental. Just look at the fairy tales you’ve heard since you were a child: Goldilocks and the Three Bears, The Three Little Pigs, Three Blind Mice. What about the three wise men of the Bible or the Three Musketeers? Why do teachers ask students to write three-point essays, or why do preachers have a tendency to preach three-point sermons?
There’s just something about the power of the number three. Maybe breaking ideas into three bite-sized pieces of information helps people commit that information to memory better. No matter why the number three is so important, it’s powerful.
When you’re setting those three objectives, make one of them financial in nature so you can achieve quantifiable success. Maybe you want to increase your revenue by 3% or increase your profit margins by 5%. The point is that by always including one financial goal, you will constantly be improving your organization’s bottom line while simultaneously working to increase its value.
Make sure your objectives align with your vision, mission, values, and SWOT analysis. This is where all the work you’ve done in the strategic planning framework comes into play. If you’re setting objectives that are counter to your vision then you will never make it a reality. Likewise, if the objectives go against your organization’s mission and values, your team won’t be as likely to buy-in and your goals will be derailed before they have an opportunity to effect positive change. Lastly, if your objectives aren’t addressing the weaknesses, opportunities, or threats to your business, then what’s the point? You want the objectives you set to improve and strengthen your company in a way that drives you toward your vision and doesn’t compromise your mission or values.
Another thing I recommend people do is to have their management team set the objectives. Owners and managers aren’t worried about one or two tasks. They’re worried about all tasks, divisions, and people. Your management team is trained and put in place to see the broadest views and the biggest pictures. They have the WHOLE organization in mind rather than one division of it. Therefore, put them in charge of creating your company’s objectives.
As you’re setting your goals, follow SMART advice:
Finally, write everything down! I can honestly say that if I don’t put my goals in writing, they are never accomplished. To lend further credence to this idea, Dr. Gail Matthews, a psychology professor at the Dominican University of California, did a study on goal-setting with 267 participants. She found that “more than 70 percent of the participants who sent weekly updates to a friend reported successful goal achievement (completely accomplished their goal or were more than halfway there), compared to 35 percent of those who kept their goals to themselves, without writing them down.”
RESOURCES: Download a copy of our Strategic Planning worksheet
Based on your findings from the SWOT analysis, you’ve created three over-arching objectives for your organization that can be achieved within a three-year time frame. You’ve had your management team set specific, measurable, attributable, realistic, and timely goals, and you’ve made one of them a financial goal. Finally, once you’ve narrowed your options down to three goals, you’ve written them down. You will need them to move forward with the steps of your strategic planning framework. It is difficult to develop strategies, create tactics, or take actions without constantly referring back to your three objectives. While you can’t predict what will happen in your company’s future, you can measure the outcome of your strategic goals just by writing them down.
You have written them down, haven’t you? They are especially important in the last three steps in the strategic planning process!
Learn more about the strategic planning process in my next article as I discuss Developing Strategies using what you have learned to this point. Feeling overwhelmed? Contact us to see how the Financially Simple team of experts can guide you and your team through the development and implementation of your strategic plan!