Setting Goals and Objectives – Part One
Setting goals and objectives is critical to success and it is a difficult task for many people. After completing a strategic planning session, the next step is formulating action plans for your functional areas. This represents a basis for you achieve meaningful results during the next year.
Setting goals and objectives begins with assessing your function’s performance and the major issues that need to be addressed during the next year and how they link to your strategic plan.
Examples of functional key results areas include:
- Unit production/output
- Cost control/management
- Service design
- Vendor/supplier relations
There are four steps in conducting the assessment:
- Identify perceived issues – this done during your strategic thinking sessions.
- Prioritize issues – determine the four to eight most important issues that are most likely to have the greatest impact.
- Analyze issues – validate a particular issue and develop effective ways of addressing it.
- Summarize issues – summarize specific conclusions and courses of action.
The performance indicators should be measurable based on the established objectives. They can be selected for any or all of the following:
- Hard numbers such as sales, units of production, products shipped, and clients served.
- Percentages, such as profit margins, market share, sales to new customers, repeat business, and productivity increases
- Significant achievements such as major project completions.
- Service factors, such as response time, frequency of contact, and customer acceptance.
- Problems to be overcome – such as credits, overtime, late production, cost overruns.
- Soft or indirect indicators, which may suggest effectiveness in subjective areas such as employee turnover, absenteeism, or customer service.
The performance indicators should identify what will be measured but not by how much or in what direction. They should represent factors that can be track on an ongoing basis. The cost of measuring or monitoring should not exceed the value of the information.
In part Two I am going to describe how to Establish Your Objectives.