When you start a puzzle, do you use the box for reference or go in blind? In our opinion, running a business without objectives is much like trying to complete a puzzle without the bigger picture — harder than it needs to be. Objectives guide business decisions and help you accomplish your goals. Our comprehensive guide to objectives will help you understand what objectives are, how to measure them and ultimately, how to achieve them.
What is the definition of objectives?
When defining objectives, context is key. In business, objectives often involve making sales or acquiring new customers. In a hostel common area in Mykonos, a more pressing objective might be securing tickets to a yacht party. In general, objectives simply mean something you plan to do or achieve.
Objectives in business indicate where you want your organisation, team or self to head, as informed by the company's strategy. Some common objectives include increasing market share, reducing turnover, increasing profits and strengthening customer service.
Strategic objectives definition
Businesses implement their objectives by setting strategic goals. As you pursue your broader business goals, you'll need a strategic plan that outlines your markers of success. In the world of OKRs, strategic objectives are known as Key Results. We’ll elaborate on that below.
3 key objective benefits in business
Why do businesses set objectives? Here are three significant advantages of having good objectives in place in your organisation.
It is easier to meet business goals when everyone knows what they are. The benefits of clear objectives are two-fold — improved visibility and better communication. A company can develop a strong strategy and provide direction to teams through simple objectives.
Having clear business objectives allows you to measure success. With an end goal in place, it’s easy to track your progress, and if things aren’t going as expected, you can amend your strategy to increase your chances of success.
Decision-making, as guided by objectives, helps save time and resources. With a clear focus, you'll spend more time making decisions that help you achieve your goals and less energy on what’s not relevant.
How do you set objectives?
The first step to setting objectives is breaking down your goals into quarterly bite-sized pieces. If you’re having trouble identifying your objectives, a good place to start is by looking at where you land in the AARRR funnel.
The AARRR funnel divides your customer's journey into five steps: Acquisition, Activation, Retention, Referral and Revenue. Focus on one or two stages of the funnel for the quarter. A start-up may choose to hone in on Activation before moving on to Acquisition and Retention.
Once you’ve determined where you’re at in the AARRR funnel, create statements that describe your desired impact. These are your objectives. If you’re choosing to focus on Referral, your objective may become: “Develop a product customers are proud of sharing.”
How to accomplish objectives
Setting objectives is the easy part — it’s the follow-through that some find tricky. Writing objectives without a success plan is like going to the gym and spending the entire time in the change room. But we’re not here to lecture you on the importance of goal-setting; we’re here to inspire you!
On their own, objective goals may seem intimidating. Taking on huge tasks like becoming a top seller or doubling profits isn’t an easy feat, which is why objectives are more effective when broken down into smaller goals and tasks. Introducing OKRs — a popular goal-setting framework utilised by highly successful companies like Google and Amazon.
But what are OKRs? And how exactly can they help you actualise your business dreams? Let’s find out.
How OKRs champion objectives
OKRs stands for Objectives and Key Results. Fathered by former Intel CEO Andy Grove, this methodology became an effective way to take management by objectives to the next level. It breaks down goal-setting into three steps: Objectives, Key Results and Initiatives.
1. Objectives — Where do we want to be?
The first step in the OKRs process is writing new objectives for the quarter. Identify a few impactful objectives that describe the outcomes you’d like to achieve in this period. Objectives can be specific to a team or top-level, encouraging action from multiple departments. Make sure you use simple language and keep things broad. Specificity, numbers and metrics will come up when writing Key Results, so avoid them when setting your objectives.
Examples of Objectives include:
- Boost sales
- Deliver world-class customer service
- Go viral on social media
Follow the link to see more on writing good objectives.
2. Key Results — How will we measure progress?
After you've defined your objectives, it’s time to determine your Key Results (KRs). Key Results are the quantitative markers of success that drive progress on your objectives. Don’t confuse them with tasks — KRs don’t tell you what to do; they specify what you need to accomplish to meet your objectives.
KRs should follow the SMART guidelines:
Specific — Now’s the time to be specific. In your KRs, be as explicit as necessary.
Measurable — Write your KRs with measurability in mind. Ideally, you’d like to report on progress weekly.
Attainable — Be ambitious within the realm of possibility. Your KRs should be targets within reach.
Relevant — KRs should always directly support an objective.
Time-bound — Make sure your goal is achievable in three months.
Here’s a simple equation to make writing key results simple:
"Improve <metric> from X to Y"
Examples of Key Results include:
- Increase revenue from $80,000 to $100,000 a month
- Improve NPS from +30 to +40 by July
- Improve Instagram reel views from 25k to 200k per video
Learn more from our guide to writing effective Key Results.
3. Initiatives — How do we get there?
Now comes the straightforward part. Ask yourself: What needs to be done to achieve my Key Results? These are your initiatives. Don't go overboard! This isn't about building the entire roadmap — it’s about reaching an understanding of what needs to be done, when it should be done, and who will do it.
Examples of initiatives include:
- Make 20 more cold calls per week
- Send thank-you emails to customer base
- Create 20 Instagram reels per month
Software like Tability makes writing and implementing Objectives simple. It takes the stress out of planning, setting and tracking goals. Turn your objectives into outcomes by signing up for a free trial of Tability today!