MANY a time our plans distort because they have no aim. When a man does not know what harbour he is destined for, no wind is the right. This is why planning is a major component of any organisation and without objectives, all is left to chance.
For many organisations the main objective in their endeavour is to make money. This is a bit of a cliché which does not represent a true objective. There are many ways to make money for an organisation; some positive like “to be the best at fulfilling the customers needs” and some negative like “to cut salaries and jobs”. Both will make money for the company but the positive objective is too vague and the negative objective could be devastating to the company.
Clarity of objectives
Without clear objectives, different departments may waste resources or even compete with one another; which is counterproductive and a serious problem. Objectives are important to not only lead the company to attainment, but also to provide a way to get there, while measuring the progress along the way.
Objectives should be well thought out and make a serious basis for analysis of the company progress and challenges. For leadership to arbitrarily create an objective that sounds impressive or will make shareholders happy may very well be the nail in the coffin of their career. Objectives must be created by leadership and cascaded throughout the organisation. The objectives should be specific, measurable, achievable, realistic, with timeliness and above all, attainable and easily understood in line with the company vision. These objectives must be communicated to everyone in the company
While this seems like business 101 at the community college level, which sounds very elementary, many companies have omitted these important planning issues.
Objectives do not create themselves and from the chief executive to the hourly paid employee, all should know, understand and work to attain the objectives. Strategic planning represents the idea of forward-looking leadership and a workforce in step with the planned objectives. Everyone should know the objectives and the only way to know exactly where you are as a company, is to measure those objectives. It must begin with the vision. There is need to analyse these objectives through a set of questions designed to unpack the organisational vision. One very pertinent move is to look at the guiding principles and see if they provide the framework within which the company will pursue and achieve its mission.
Strategic planning begins with collecting and arranging facts and data from the strategic thinking process. The most commonly used tool by upper management to collect the information is the Swot analysis which exposes organisational strengths, weaknesses, opportunities and threats. This tool helps to determine the company’s position. The strengths or weaknesses are usually viewed as internal and the opportunities and threats are usually external.
For example, the limited cash flow of a company would be categorised as a weakness, while owning 85% of a market share would definitely be a strength. Knowing trends in market growth will also be useful in preparing the Swot. A key concern when preparing a Swot is a lack of objectivity. This may be as simple as making unfounded assumptions that are not supported with facts and data or downplaying a true threat. Intuition and hopes should not be used in preparing the Swot. If you cannot measure it, you cannot accurately predict it. If the item may become a threat, treat it as such to be safe.
Once the Swot is complete, it is time to form the framework of the vision statement. The vision statement is one of the most misunderstood of the strategic planning tools. The vision of the organisation represents the dreams that can come true.
The formation of the statement should include input from all senior leaders. It should tell where the company is going. It can be expressed as monetary, competitive or superlative and should be for at least a five-year timeframe. An example of a vision statement: To become number one or number two in all markets we serve and revolutionise our company to have the strengths of a big company, while combining the leanness and agility of a small company.
If the vision statement represents dreams that can come true, the mission statement goes one-step further to describe the organisation — what it does and where it is going in the future. The mission defines the purpose of the company and is often combined with the guiding principles or values statement. An example of a mission statement: Our purpose is to delight our customers by delivering a quality service, in a cost–efficient manner through the contributions of all associates.
These principles provide a methodology for the pursuit and attainment of the organisation’s mission. Usually constructed into five to seven core values — the guiding principles represent shared ideas and give shareholders and stakeholders alike, a representative summary or abstract of business, market, financial and in some cases, moral stance. Example of Guiding Principles: Our company places customer loyalty as our highest priority, even above customer satisfaction.
Broad strategic objectives
A goal is usually long term (three to five years), while an objective is short-term. Objectives get the job done, so to speak. The broad strategic objectives are more specific than the mission and they commonly fall into the realm of what instead of how.
Considerable thought and planning should go into the creation of these objectives so as to prevent frequent rewrites. Strategic objectives should be easy to understand and apply by all employees.
Mandeya is an executive coach, trainer in human capital development and corporate education, a certified leadership and professional development practitioner and founder of the Leadership Institute for Research and Development (LiRD). — email@example.com, firstname.lastname@example.org or +263 772 466 925.