Strategic Objectives: Part of the CompanyÕs Strategy
By Audra Russell
Q:
What are Strategic Objectives?
A: Strategy is a companyÕs 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 Òbroad formula for how a business is going to compete,Ó 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 organizationÕs strategic plan. The
objectives need to be Òspecific, measurable, achievable, realistic and time
bound,Ó 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 organizationÕs mission, in order for the strategy and its objectives to be
successful.
Audra Russell, PHR, is an HR knowledge advisor in SHRMÕs HR Knowledge Center.