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5 Core Objectives for Your Business
Many businesses struggle when it comes to establishing their objectives. Some will think that it's too much work, others will put a laundry list together, and a few will do a good job with it. Those who do a good job keep the list short, and develop something to which everyone can relate.
Businesses link objectives to key short and long term performance indicators. By taking this approach, organizations can waterfall these goals to deploy the objectives to individuals, teams, departments, functions, and strategic business units.
Each of the 5 Core Objectives should have corresponding key indicators and measurable goals for this year. For example, if you are developing your objectives, one of the first would be "Exceed Financial Targets." A key indicator within that goal would be net profit before tax (NPBT), and this year's goal is $10M.
Since I mentioned the first objective, let's put together the whole list. The 5 Core Objectives that can be used in any organization are as follows:
1. Exceed Financial Targets
2. Grow / Develop the Company
3. Increase Productivity & Quality
4. Improve Customer Satisfaction
5. Improve Employee Satisfaction
For each of the objectives, there are several examples of key performance indicators to include.
Exceed Financial Targets - Profitability, market share, cash flow from operations, and inventory levels
Grow / Develop the Company - Revenue growth, market growth (ex: US, China), and revenue from new product introductions
Increase Productivity & Quality - Revenue per employee, IT deployment, raw material turns, defects
Increase Customer Satisfaction - Comparisons to prior year & industry, price performance ratio
Increase Employee Satisfaction - Employee turnover, satisfaction surveys, days lost
The most challenging area to measure is customer satisfaction. This objective is all about meeting or exceeding customer expectations. Since it is subjective and harder to quantify, it will require sampling and questioning.
The work here is well worth the effort, as you can bet that an unhappy customer is likely to tell a friend about the experience, and is less inclined to tell you. Often, a good old fashioned customer survey is the best way to obtain much of the information. Along with that, make sure you measure customer retention, repeat business and referrals. Don't forget social networking sites like Facebook to garner feedback. It's a must!
When you are establishing objectives, keep these 5 in mind. Here's why:
a. They are clear, concise and can be presented to anyone in the organization.
b. They ensure alignment among your team, and provide a filter for your team to use.
c. They are easy to measure.
d. You can assign ownership to them.
Most importantly each person can ask himself / herself "how is the action I am taking going to move the company closer to meeting or exceeding one of the 5 Core Objectives?"
By doing this, you keep everyone focused on strategic priorities. Give it a shot! |
