When talking about business strategies, commentators often talk about goals, and occasionally mention objectives. These terms are, however, usually not clearly defined and very seldom is there a solid hierarchy or discernable relationship between them. In some cases they are used interchangeably. Unfortunately, the use of these terms in other fields and endeavors (like behavior and coaching) often results in understandable confusion. There are real reasons to use each of these concepts to serve specific and distinct functions in support of business strategy and you can build a stronger and more useful strategy by allowing them to satisfy different roles.
In my experience; a business or strategic goal should be a general statement of intent that is broad, relatively undefined but expresses the vision and aspiration of the organization. It could have measurable aspects, but does not necessarily have to have them. One very good example of effective goal setting was President Kennedy’s statement to Congress in 1961: “This nation should commit itself to achieving the goal, before the decade is out, of landing a man on the moon and returning him safely to the earth.” It might be useful to remember that, when Kennedy gave this speech, the US had never put any man into space under any circumstances. A little over eight years later, Neil Armstrong stepped onto the moon’s surface. Kennedy’s goal was aspirational and visionary, it had some measurable aspects and it was sufficiently clear to serve as a focal point for his subordinates and teammates to initiate independent work in support of it.
Many of the pundits borrow a leaf from the book of performance management and assert that a strategic goal should be SMART – Specific and Stretching, Measurable and Meaningful, Agreed upon and Attainable, Realistic and Results-oriented and Time-based and Trackable. While this works well for developing employees, it is often too specific and limiting for developing business strategies. Kennedy’s example above lacks a lot of specifics, was only broadly measurable and certainly was not agreed upon at the time he said it. While being specific (as Kennedy did above) can be very useful, expressions like “We want X Company to be seen by the market as the best at (fill in your core business here)” can still be very helpful to companies as a strategic statement.
When the US Army goes to fight, the commander usually publishes an operations order. A key piece of that order is a graphical representation of what the commander wants done – a “picture” of the operation that is posted on maps that gives everyone in the organization a reference for what the unit will do. In almost every offensive operation, the commander will establish at least one “objective” for the unit to take. This is often a circle on the map that has specific characteristics – it has distinct boundaries, it is matched to the terrain so that it is as easy as possible to identify and it is the absolute minimum size necessary to achieve the mission of the organization.
This is a reasonable model for business – employing a hierarchy of objectives that support an overarching goal supports overall organizational orientation while enabling focused effort to be coordinated in the attainment of goals. Expressing objectives as the measurable and actionable component parts of goals. This allows the development of measurable objectives (e.g.; “By the end of March we will reduce response time to hot line calls to less than 12 hours.”) which can ably support your overall goal (“We want X Company to be seen by the market as the best at what we do”). This approach fits nicely with common strategy tools like the strategy map and balanced scorecard and provides a means of allowing subordinate leaders to make decisions that enable and reinforce both the goals and objectives.
Have another suggestion for making goals and objectives work? Add your thoughts to the comments below.