Strategic Objectives - Simply Put!

Introduction

In the Marstan Guide "Introduction to Business Management", we said that strategy and business planning are closely related. We also explained that vision statements, mission statements and strategic objectives are the three fundamental components of a business strategy. (See also “Strategy and Business Planning – Simply Put!”)

What is the purpose of strategic objectives?

The first steps in creating a business strategy are the creation of a vision statement and a mission statement (see “Vision and Mission Statements – Simply Put!”)

These two statements (which should both fit onto one page of paper) set the scene for all future activities in the organisation.

However, in order to plan for action, it is necessary to go further and set out a number of strategic objectives, covering all aspects of the work of the organisation.

What is the difference between strategic objectives and aims or goals?

There are two very important aspects to strategic objectives:

1. They should refer to the long term not the immediate horizon.
2. They should refer to the “big picture”, not the detail.

Key strategic objectives for new organisations

When a new business starts or a new organisation is established, the main objectives in the first year are effectively to set up the organisation, develop its procedures and do its first work.

Strategic objectives in the first year should include:

1. Setting the course for the new organisation
2. Obtaining the necessary finance
3. Bringing a team together
4. Developing the goods or services
5. Building the necessary infrastructure
6. Carrying out the first work effectively

Key strategic objectives for existing organisations

Existing organisations should, at least once a year, spend some time thinking about the future and setting new objectives.

These strategic objectives might include:

1. Adjusting the business to reflect the changes in the economy or in legislation
2. Changing to reflect the impact of competitors
3. Developing to react to any strengths, weaknesses, opportunities and threats
4. Changing in response to customer demand

How should strategic objectives be used?

When used in conjunction with a vision statement and a mission statement, strategic objectives set the scene for the whole organisation.

They pave the way for every individual or every department to prepare individual goals, which are related to the overall vision, mission and strategic objectives of the organisation.

This acts as a powerful motivator and ensures that all departments and every individual are “pulling in the same direction”.