Strategic Objectives: Part of the Company’s Strategy
By Audra Russell
Q: What are Strategic Objectives?
A: Strategy is a company’s plan for controlling and utilizing its resources—human, physical and financial capital, in an effort to promote and secure its interests. When trying to define strategy, think of it in terms of what a business can do—its strengths and weaknesses—as well as the potential effect of external opportunities and threats. Strategy can be summed up as a “broad formula for how a business is going to compete,” states Harvard Professor Michael Porter.
When the strategy has been developed, a plan to reach the goals must be formulated. The goals can be achieved only by setting clear short-term and long-term objectives. However, a company will also need to define which performance areas will need to be measured. Those measurements will assist the company in defining the objectives.
An organization establishes its long-term objectives once it has developed its mission and vision statements. It then conducts an analysis of the organizations internal strengths and weaknesses and its external opportunities and threats, otherwise known as a SWOT analysis.
The long-term objectives are the specific results that an organization seeks to achieve in pursuing its basic mission. They generally take three to five years to achieve.
Short-term objectives are the milestones that have to be reached in order to meet the long-term objectives and generally are completed within six months to a year. In order to meet these objectives, all management must be on board. This can foster an environment of acceptance and commitment among all employees.
The short-term objectives are essential to the success of the long-term goals and ultimately the organization’s strategic plan. The objectives need to be “specific, measurable, achievable, realistic and time bound,” in short, S.M.A.R.T. An action plan to achieve the objectives is imperative to attain the goals set by the company.
Some key components will be to determine the needed resources, determine what other areas of the organization collaborate and interlock and review the financial impact. Once the action plan is in the implementation stage, it is time to see if the strategy is working. This is accomplished by reviewing the financial statement and the balanced scorecard, performing a market analysis and keeping an eye open for the warning signs that may mean that it is time to re-evaluate the strategy.
Without clear, concise objectives, a strategy has little chance of becoming reality to a company. All levels of the company must be in sync about the organization’s mission, in order for the strategy and its objectives to be successful.
Audra Russell, PHR, is an HR knowledge advisor in SHRM’s HR Knowledge Center.