The Importance of Setting Business Objectives
Although "goals" and "objectives" may be technically different, the terms are often used interchangeably. However, they remain important -- if not critical -- to business success. Setting business objectives delivers numerous benefits to companies, while not setting goals can be dangerous. Both good and bad objectives are beneficial, while not setting goals is always damaging.
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Benefits of Setting Objectives
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Your objectives and goals deliver at least three major benefits. They define the nature and purpose of your business clearly and briefly. Over time, your goals display the wisdom of your strategy, plans, and efforts. Finally, setting objectives allow you a management by objectives (MBO) approach to making your company a success. This focuses your strategic and operations thinking on the objectives you've noted.
Good or Bad Objectives
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Setting the right goals and objectives creates a road map to success. Just as the correct physical map or GPS device delivers you safely and correctly to your destination, well-thought-out objectives will help your business succeed, without regard to company size or industry. Even less effective objectives, once written, offer a map to success. Should you find that your "map" is not working as well as you'd like, you can modify, change and improve your objectives. You'll still benefit, as you have the basis of a good plan that just needs some additional or different components.
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Danger in No Objectives
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The only real and lasting danger is setting no goals or objectives. With no goals, it's almost impossible to create a strategy or understand the reasons for the success or failure of our business. Even when experiencing success, it's difficult to know why. You may have a general idea of the steps you took to reach success, but without written objectives, you'll never be totally sure or be able to reproduce your steps identically. More businesses have failed by having no goals or objectives than those with written strategies that needed major improvement.
How to Set Business Objectives
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Try using S.M.A.R.T. theory.This approach contains all the necessary components of successful strategies. Make your objectives Specific. For example, "I want to increase revenue," is a strategically useless objective. However, "I want to sell 20 percent more widgets and 10 percent more elephants," is specific. Objectives must be Measurable. Stating that, "I want to increase revenue by 25 percent," allows you to measure your objective against current numbers. Your objectives must be Achievable. A goal of generating higher revenue than IBM may be noble, but impossible. Realistic objectives are also necessary. Based on your industry and company size, set objectives that you can meet. All goals must also be Timely. "Someday" is not an option. Setting short- and long-term dates, however, helps you track your progress.
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