Goals vs. Objectives in Business: A Guide for Managers

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Businesses constantly monitor their performance against previous years, competitors and industry averages. In order to judge your company’s progress in detail, it is necessary to have some idea of what you are trying to achieve and how you will measure your progress. Goals and objectives are the tools you use to plan your company’s purpose and direction.

 

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Definitions of Goals vs Objectives

While some people use the terms interchangeably, goals and objectives do have distinct meanings when it comes to both short- and long-term planning.
 

    • Goals: A goal is an ultimate result that a business hopes to achieve over a period of time. Goals generally do not reference the activities that people need to complete in order to get the planned result. instead, they focus on the direction the company is moving. Goals describe the long-term destination of the wider business activity and are linked to the company’s vision and purpose.

 

  • Objectives: Objectives describe the actions that each employee, team and department undertake to achieve their goals. Each division of a business has objectives that contribute to the organization’s progress toward its goals. Objectives are the incremental targets and often follow the S.M.A.R.T criteria for measuring their effectiveness being specific, measurable, attainable, realistic and time-bound.

 

Best Practices for Goal Setting

Here are a few ways to ensure you are giving yourself the best chance of meeting your own expectations:
 

    • Make goals clear to everyone involved in achieving them. Writing goals down can help to clarify them, especially in the case of collaborative efforts, so you can simplify what want to do.

 

    • Decide which department or team will be responsible for achieving the goal. After you decide which team will complete each goal, assign the task to that team.

 

    • Include numerical targets. Goals related to increasing market share or attracting more customers need a value attached to them to be meaningful. Using percentage increases or totals for targets helps quantify the desired results.

 

    • Define the timeframe. A goal with a deadline is much easier to track, so plan a realistic timeframe to aid the process of setting interim objectives.

 

    • Set review points. Once a goal has its scope and deadline set, regularly checking on progress makes it easier to assess the effectiveness of the planned steps to achieve it. If progress is slow, you can plan a more aggressive strategy, keeping in mind the achievements to date.

 

    • Provide adequate resources. It is a crucial part of the planning process to ensure that those responsible for getting results actually have the tools to do so. Allocating time, dedicating additional budget and resources and ensuring that there is sufficient support in place increases the chances of achieving the goals.

 

  • Identify any obstacles. Predicting potential problems that may prevent you from achieving your goals within the budget and the deadline is an important part of the planning process so teams can plan solutions.

Clear goals help an organization maintain and grow its market share, expand into new markets and diversify its product range.

 

What You Should Know About Goals And Objectives

It is important to devise an effective strategy to support the achievement of your objectives and contribute to company-wide goals. You can make high-level strategic decisions to improve the work environment and help your teams successfully complete their goals and objectives.
 
It is also important to focus on individuals when it comes to setting objectives and goals. This can often happen through the performance appraisal process and can be linked to personal career goals. An employee who wants to learn a new skill to develop themselves professionally will be motivated to achieve an objective that benefits them and the business.

 

Goals vs. Objectives FAQs

Here are some answers to important questions you may have about goals and objectives:
 

  • When should you set goals and objectives?
  • How can you ensure your goals are realistic?
  • What data is most helpful in determining goals?
  • Who should be involved in setting goals and objectives?

 

When should you set goals and objectives?

If you are embarking on a project that has a specific aim, setting goals and objectives at the planning stage enables you to build in the strategic elements you need to succeed. If you are setting more general goals for securing the future of the company, they will have their own timelines, which will inform the process of reviewing and updating them.

 

How can you ensure your goals are realistic?

Many businesses set their high-level goals based on a process of benchmarking, including SWOT analysis and competitor and internal assessment. Comparing the performance of different departments within the business and looking at the way competitors operate can help define realistic goals and identify the means by which you can achieve the results.

 

What data is most helpful in determining goals?

Past performance data will allow you to benchmark your own business’s performance in previous years and help set goals for the future. By tracking the rate of growth, the performance of specific products or other metrics, you can asses the effectiveness of previous activity as well as identify ways to facilitate further growth.

 

Who should be involved in setting goals and objectives?

High-level business goals should include the directors or senior management team as they focus on the long-term goals of the business. Objectives can be set by managers, team leaders and as part of the individual review process, so everyone should have a chance to contribute to the way objectives are allocated and implemented. Objectives work best when the individuals responsible for achieving them are motivated to work toward them. In some cases, involving employees in the process of setting objectives will motivate them.
 

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