Business Objectives Planning
The objectives section of the business plan or business planning session defines the specific goals a business wants to accomplish. The process of objectives planning allows a company to translate its high-level strategy into operational implementation, and is traditionally done as part of strategic planning. These objectives should follow the SMART principle: specific, measurable, actionable, realistic and time-bound. Good objectives lend themselves to dashboard metrics.
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Types
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Objective planning touches every aspect of the business. Goals will usually be either internal or external. You should create goals in terms of market position, profits or revenues, human resources and product or service development. For instance, you may have an internal objective stating how many hours each employee should spend in training per year, and an external objective requiring you to capture 10 percent market share within two years.
Benefits
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While a strategic vision is necessary for every company, a strategy without clear and implementable goals is unrealistic and probably unachievable. Objectives planning allows the operations department to craft specific actions and incentives to move the company toward the strategy and to measure results quantitatively. In particular, employee incentive schemes can be aligned far more effectively with specific targets. If a goal is to reduce the average cost of customer acquisition, incentivizing customer care agents to retain existing customers who are in danger of leaving will have a measurable impact on the outcome.
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Time Frame
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While business objectives are time-bound and often linked to quarterly or annual goals, an objectives plan should be a living document. You should periodically assess your progress against goals you have set, and revise the goals or timing as necessary to adjust to changing market conditions. Convey this progress update to your employees as often as possible to ensure that everyone has timely feedback on their contribution to the goals. Many companies go through this process once a month.
Warning
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Executives can sometimes become enamored with the process, losing sight of its true purpose. Strategic goals and their operational execution must ultimately contribute to the bottom line of the business. Ensure that you are not spending more money on reaching the goals than the outcomes of those goals would provide.
Expert Insight
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The most crucial yet most often overlooked component of business objective planning is its impact on employee incentives. Companies often improperly incentivize behaviors that do not contribute to a company's profitability or its goals. When crafting your actionable, task-based plan, ensure that employees are only rewarded for contributing specifically to the appropriate metrics.
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References
- Photo Credit Image by Flickr.com, courtesy of Vicky Sorsby
