As a business owner, you can’t make plans for the future and simply “hope” to achieve them. Taking action is the only way to improve your business and having clear and measurable objectives is the only way to take effective action. Therefore, during strategic planning sessions, as you’re mapping out how to increase the value of your business, you must set long-term objectives in your business that can actually be achieved. However, many people struggle to set objectives that will drive them toward their long-term vision.
Whenever I work with business owners, I often ask the question, “What is your goal?” I’ve come to find that this is a difficult question for people to answer. Sure, you may have an idea about the direction you want to go. As a business owner, you have a vision, but do you know how to establish proper long-term objectives in business?
While you’re preparing for the strategic planning process, you should conduct a thorough SWOT analysis. When you identify the strengths, weaknesses, opportunities, and threats in your business, you gain a greater perspective of where it is in relation to where you want it to be. The information gained during your SWOT analysis is valuable and should be put to use when identifying the objectives, you must set to reach your long-term vision. Your objectives should be clearly defined and measurable because they are going to be the path to effect change for your organization’s future.
Steps To Setting Long-Term Business Objectives
My experience, both as a business owner and as an advisor to many entrepreneurs just like you, has helped me to define these key steps for successfully setting long-term objectives.
I believe one of the greatest impacts designating objectives has for a business is it helps you and your team members identify a central point of focus for the future. Setting objectives helps you to stay on course. But how do you effectively set objectives? More than that, how do you set achievable business objectives?
Think in Three Year Increments.
One of the only constants in life is change. As a result, your objectives must reflect this. That’s why I suggest keeping a rigid schedule for your goals. In my experience, too many things can change within a timeframe longer than three years. Sure, you’ll experience ebbs and flows in your business over the course of three years but not nearly as many as you will beyond that time. Therefore, when you set your business objectives, set ones you know you can accomplish within three years.
Set Three Goals at a Time.
Speaking of the number three, whenever you’re setting objectives, it’s best to use only three goals. But why? I know it may sound a little strange, but have you ever heard of the power of three? Think about it for a second. The number three is just about everywhere; it’s not accidental. Just look at the fairy tales you’ve heard since you were a child: Goldilocks and the Three Bears, The Three Little Pigs, Three Blind Mice. What about the three wise men of the Bible or the Three Musketeers?
There’s just something about the power of the number three. It’s why teachers ask students to write three-point essays and preachers have a tendency to preach three-point sermons. Maybe breaking ideas into three bite-sized pieces of information helps people commit that information to memory better. Regardless of why the number three is so important, it’s powerful.
Make One of the Three Objectives Financial.
I often suggest making one of the three objectives financial in nature. This helps you to achieve quantifiable success. Whether you want to increase your revenue by 3% or increase your profit margins by 5%, leaving one of your three objectives for financial growth helps keep your operations in balance. Using this method, you have the ability to consistently improve your organization’s bottom line while simultaneously working to increase its value.
Align Objectives with Your Vision, Mission, Values, and SWOT Analysis.
Make sure your objectives align with your vision, mission, values, and SWOT analysis. This is where all the work you’ve done in the strategic planning framework comes into play. If you’re setting objectives that are in opposition to your vision, then you will never make it a reality.
Likewise, if the objectives go against your organization’s mission and values, your team is less likely to buy-in, derailing your goals before they ever had an opportunity to effect positive change.
Finally, if your objectives aren’t addressing the weaknesses, opportunities, or threats to your business, then what’s the point? The objectives you set should work to improve and strengthen your company in a way that drives you toward your vision without compromising your mission or values.
Have Your Management Team Set and Create the Objectives.
Another thing I recommend people do is to have their management team set the objectives. You see, owners and managers aren’t worried about just one or two tasks. Instead, they’re concerned with all tasks, divisions, and people. Your management team is trained and put in place to see the broadest views and the biggest pictures. They have the ENTIRE organization in mind rather than a single division. Therefore, it really just makes sense to put them in charge of creating your company’s objectives.
Apply the SMART Filter to Your Objectives.
Next, as you’re setting your goals, follow this SMART advice:
- Make your objectives as Specific as possible.
- Create Measurable objectives.
- Make sure your objectives have Assignable actions.
- Create Realistic objectives.
- Set a Timeframe for the achievement of your objectives.
Write Down Your Objectives.
Finally, you MUST write everything down! I can honestly say that unless I put my goals in writing, they will never be accomplished. To lend further credence to this idea, Dr. Gail Matthews, a psychology professor at the Dominican University of California, conducted a study on goal-setting with 267 participants.
She found that “more than 70 percent of the participants who sent weekly updates to a friend reported successful goal achievement (completely accomplished their goal or were more than halfway there), compared to 35 percent of those who kept their goals to themselves, without writing them down.”
What Happens Next?
So, what do you do with this information? Follow the steps. Your findings from the SWOT analysis should lead you to create three overarching objectives for your organization that can be achieved within a three-year time frame. Once you’ve completed this portion, have your management team set specific, measurable, assignable, realistic, and timely goals, leaving one of them to be financial in nature.
Finally, once you’ve narrowed your options down to three goals, write them down. You will need them to move forward with the steps of your strategic planning framework. It is difficult to develop strategies, create tactics, or take action without constantly referring back to your three objectives. While you can’t predict what will happen in your company’s future, you can measure the outcome of your strategic goals by simply putting them in writing.
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