Setting goals is a necessity for businesses of all sizes and industries. While an initial business plan is important for getting a start-up off the ground and running smoothly, clear goals that encompass both short-term and long-term company achievements aid in the continued growth and expansion of an organization. Setting company goals benefits a business by keeping everyone on track for profitability and success.
Goals represent a broad outcome, while strategies develop an approach within which employees and managers can work together, stay focused and emphasize the importance of continued effort toward achieving outcomes. Goals also provide business owners and managers with an understanding of their organizations’ capabilities and limitations. Some goals may be too easily reached, prompting managers to push themselves and their employees to achieve more complex and difficult objectives. Other goals may be too much for a company, requiring a reworking of company strategies and resulting in a major refocus of company goals to achieve a more profitable outcome.
5 Tips for Setting Company Goals
1. The SMART Method
The SMART method, which stands for specific, measurable, attainable, relevant, and trackable, and time-bound, is a workable format for creating company goals. These guidelines represent the criteria for developing an intelligent strategy. Goals should be specific because reaching a clearly defined outcome is more likely when it can be understood and communicated without ambiguity. Having identifiable objectives to accomplish throughout the process makes a goal measurable while being attainable means that the goal is realistic, something that is possible for the company to achieve. A company should be working toward relevant goals, which means they fit into the business model and will be beneficial to the business if the goals are achieved. Finally, goals should be bound by a set timeline in order to drive continued focus and accountability on achieving them. Managers can reference this tool throughout the planning stages and the entire process of reaching a company goal.
To put this method into an example: a successful retail business is looking to expand and sets goals based on the SMART method. Their SMART goal could state: We will expand our business by opening a branch store in a neighboring city by the following summer. Their goal is specific because in order to expand they will open a branch store, which is measurable by all of the steps it takes to open the branch, such as finding a location in a neighboring city, hiring new staff, ordering products and promoting their new location. The goal is attainable as an extension of their original successful model and relevant because they are building on the brand and increasing profitability potential. Finally, it is set within the timeline of opening the following summer.
2. Long-Term and Short-Term Goals
Understanding the importance of long-term and short-term goals can also benefit companies. Long-term goals represent major outcomes that may take five or more years to accomplish. These are the big-picture achievements that leaders want for their businesses and are usually synonymous with the reason a business was started in the first place, such as penetrating a market or changing an industry with a unique product or service. While these goals may be grand in scale, they should still be reasonable and realistic. Short-term goals can be attained within a period of weeks, months or, at most, a year. These goals are important because they are more easily and readily attainable. They also work as motivation along the way toward achieving long-term goals. For example, a company may want to set the long-term goal of offering a new product within a year. They would first set several short-term goals, such as researching similar products to see where there is a need in the market. Another short-term goal could involve raising funds for new product development.
3. Risk Assessment
An essential aspect of setting goals for an organization involves assessing risks associated with the strategy that a company has chosen. Small risks are often necessary and can act as motivation for pushing employees to work more efficiently. Business managers must also be able to assess the larger risks that their companies will take on in striving for certain goals. They should consider whether or not it will be worth the cost, time and effort spent if they are unable to achieve their goals. If the risks end up being too great, then it may be necessary to set more reasonable goals that may be less taxing on a company’s resources and assets.
4. Alignment with Company Values
Managers should establish company values from the beginning and, as they are planning and setting goals, make sure the goals align with their values. This tip is meant to instill direction and motivation in employees as they work to accomplish goals set by leaders within an organization. If employees are aware of the mission and values of their company, they attach meaning to the work that they do, are more motivated to dedicate themselves to their assignments and take pride in reaching goals.
5. Communication of Objectives with Team Members
Communication is another crucial aspect to consider when establishing short-term and long-term goals. The work and outcomes can suffer if team members are simply given tasks without understanding the overall goals their employers wish to achieve. Team members may also be able to provide additional insight into how to reach these goals if they are better informed. In the end, this unity of vision and transparency will lead to greater coordination and a better chance for successful outcomes.
Company goals provide useful motivation for managers and employees. Large and small businesses in any industry can benefit from setting clear and intelligent goals. While it is important to have strong goals and aim for success, the above considerations help business owners and leaders evaluate exactly what they need to accomplish to gain a competitive edge.
As healthcare evolves, so can your career. Start by forming a clear strategy. At the George Washington University, our online Healthcare MBA draws insights from elite faculty leaders based in the nation’s capital. As a pioneer in the industry, this program is designed to help professionals expand upon decades of experience to hone specialized expertise — and it has helped graduates succeed for more than 15 years.