“Where do we want to be?” and “When do we want to reach there?”
What is an objective?
Objectives are statements of specific outcomes that are to be achieved
Objectives are set at various levels in a business – from top management and at all levels of the business.
Objectives are often set in financial terms. That means that the objective is expressed in terms of a financial outcome that is to be achieved. Those could include:
Some objectives can include:
A popular way to look at objectives is to see them as part of a hierarchy of forward-looking terms which help set and shape the strategy of a business.
Corporate objectives are those that relate to the business as a whole. They are usually set by the top management of the business and they provide the focus for setting more detailed objectives for the main functional activities of the business.
Many business textbooks suggest that both corporate and functional objectives need to conform to a set of criteria referred to as an acronym SMART.
The SMART criteria are summarised below:
- Specific – The objective should state exactly what is to be achieved.
- Measurable – An objective should be capable of measurement – so that it is possible to determine whether (or how far) it has been achieved
- Achievable – The objective should be realistic given the circumstances in which it is set and the resources available to the business.
- Relevant – Objectives should be relevant to the people responsible for achieving them
- Time Bound – Objectives should be set with a time-frame in mind. These deadlines also need to be realistic