Inquire a group of business professionals to describe the difference between business goals and objectives and you are likely to walk away no smarter than when you inquired the query. These two famous and significant terms are perhaps the two most misused and confused terms in all of the business. And there is no wonder, the distinctions between the two are subtle.
Business Goals and Objectives
A goal is a broad, over-arching destination. “We require achieving 50 percent market share in two years,” or, “I need to compete in and complete a triathlon within 18 months.” It doesn’t define how you will achieve this market share; it does not describe a strategy to get there or offer the specific tasks necessary to achieve the strategy. It simply is out there as a destination or target.
An aim is a specific, measurable activity you will take to work towards a broader goal. For example: “As part of our business goals to achieve 50% market share in two years, we will introduce a new product in each market segment every six months.” Or, “To achieve my goal of completing a triathlon, I will engage a running coach to help me improve my cardio conditioning, pacing, and running technique.”
In both cases, the objectives are capable of being broken down at a more detailed and measurable level called tactics. However, there’s a missing link between goals and objectives: strategy.
Where Does Method Fit with Business Goals and Objectives
The strategy connects objectives with business goals. Business leaders and managers strive to develop strategies and supporting actions that assist them move towards an overarching company goal. In our instance above, in case to achieve the goal of 50% market share in two years, the firm must adopt a strategy and then define the specific sets of actions necessary to realize the strategy which will propel them to the goal.
This high-level strategy statement recognizes the approach the firm will take in growing market share. It frames the major actions but stops short of describing specifically how those actions will be implemented.
As mentioned above, the objectives will focus on particulars, involving bringing a new product to market in each market segment every nine months. The objective can further be broken down into a series of tactics, including researching customer needs; hiring additional engineers and product managers and adding production capacity to support manufacturing of the new offerings.
Making Business Goals and Objectives Personal
In many agencies, the performance appraisal and planning process involves recognizing goals and objectives for an upcoming period. Individuals struggle with the differences between the two just as their senior managers often conflate the terms and concepts. A helpful approach is to break down the business goals and objectives using the following template:
- Define one to three statements that describe a destination for your professional establishment in the upcoming year. These are your goals.
- Support each goal statement with a description of the high-level approach you will take to get there.
- Goal: My goal for this upcoming period is to reinforce my effectiveness as a manager by delivering improved and more frequent feedback. To measure the change in my performance, we will rely on my team’s assessment via a 360-degree survey compared to this year’s results, as well as my group’s measure of engagement and their overall achievement of corporate business goals.
- Objective: To acquire my goal of strengthening my effectiveness as a manager during the upcoming period, I’ll seek and complete training within three months on delivering constructive and positive feedback and maintain and review a daily log of all of my feedback exchanges and the outcomes.
The goal is obvious and in this instance the path to improving the goal via the objective is clear. Both the employee and manager understand what the employee is striving for, how progress will be measured and how the goal will be reached.
The Bottom Line
Focus on the goal as the destination and the objective as the action(s) required to get to the destination. Resist the temptation to use these terms interchangeably, and significantly, teach your team members how to define clear business goals and objectives.