Is it easy to set an objective?
You wouldn’t object to the statement that identification and implementation of goals is in fact business management, would you? There are very few businessmen who have never set unachievable goals. Unfortunately, this is the only way most people start asking questions like “Did I set a correct goal?”, “Is it a true objective?” or “What is a goal and how one should identify it?”
Businessmen often blame unreliable partners, witty competitors and stupid employees for failures in business. But the problem should be solved inside the company. Setting of correct goals has turned into an international problem.
There has been much debate over identifying goals and objectives. Some famous American consultants claimed in their reports that the management process begins with setting of objectives. Their opponents say that much work needs to be done even before setting of objectives. Moreover, the term objective or a goal is interpreted and understood in many different ways. Such notions as mission, vision and objective are often confused. All these notions refer to future which business owners want to see. But these notions cover different aspects and characteristics of such future. Confusion of the above mentioned notions may make result in the situation when planned future will never come.
What is objective?
Let’s set a funny example vividly demonstrates in misunderstanding of objective. A lecturer came to meeting of department chairmen at a huge industrial enterprise. Before that he had purchased a large kitchen knife in the store. The meeting focused on goals and objectives. The lecturer started with a simple question to the audience: “What are your objectives?” One listener raised his hand and said: “My objective is making much money.” “Excellent,” the lecturer answered, taking out his knife. “The guy in the first row has one million dollars in cash. Taken the knife and kill him, and your objective will be reached.” “But I will be imprisoned,” answered the men. “So, what? You never mentioned in your project if that you want to have money and before he and the same time”, replied the lecturer.
Is this just a joke? Well, yes and no. Inconsistency in setting of objectives and lack of attention to details often results in side effects which were not initially expected. Sometimes these side effects have a very negative influence that can bring achieved results to naught.
There is a good example related to color metal market. Russian producers hit the international market with enormous volumes of color metal. Obviously, they had a goal of selling a certain amount of products. They reached their goal. But what was the result? Enormous supply resulted in sharp decrease of prices. Thus, Russian suppliers had no financial benefits, although formally their goal was achieved. Moreover, such situation led to the unification of western producers against Russian companies who were rejected to enter certain markets.
Objective is a detailed plan of the future: future enterprise, future products, future life. The objective should be formulated in such a way so that in course of implementation time the answer to the question, whether or not objective has been reached, would be either yes or no. Partially reached objective is no objective at all.
Objective, destination, mission
A customer comes out of the store with his purchase. What is the result of his visit to the store? A customer experiences satisfaction depending on what he has purchased (whether or not he managed to buy all products he wanted to buy) and how he has purchased a product. So far, he experiences satisfaction or non satisfaction from the buying process. He will experience satisfaction from purchased products later when he starts using them. What are the roles of product, seller and customer himself in evaluation of buying experience? How is responsibility split between them in case of a bad purchase?
Everyone who produces something gets the product which is often used by someone else. The product of manufacturer is the product which a customer buys. Seller’s product is the service of selling the product. Customer uses both products: first sales experience and then the product itself. The end result depends on how a customer uses both products. Even the best delicacy can be served in such a way that no one will eat it.
When a customer goes to the store or sales department he has his own concept on desired result: what he wants to buy and how he should be served. In such a way he sets destination for producer and seller who need to meet expectation of their customers. But this doesn’t mean that a customer always has clear concepts and ideas on what the product should be and how a customer should be served.
Sometimes companies influence the customer and form new demands and preferences, thus making a new destination for their business. But directly or indirectly, the company destination is definitely set by the customer.
Destination is formalized by producer or seller in form of objectives: products and services they are going to offer. Thus, producers and sellers bear responsibility for compliance of their destination with customers’ requirements and preferences.
If objectives of producer and seller do not comply with the destination set by the customer, products and services will be in little demand.
Every business aims at manufacturing of goods and rendering services. At the same time, every business aims at own reproduction. The goal of reproduction is the desired future of a company (for example, to be occupied in the same activity and get as much profits as now). Reproduction objectives always dominate over production objectives. So, it is very important to balance these objectives in relation to products/services and the company activity to be secured in future. Sometimes these objectives can conflict which makes them unachievable.
One customer cannot make the business profitable. When we mean customers we mean lots of them. Consequently we are talking about social significance of a company and its mission.
Mission is a purpose for foundation of a company and the final social result which will be paid by the society. Mission should not be confused with destination which is a planned direct result obtained by the customer. For example, if the company produces ammunition its destination is supply of certain weaponry types with ammunition, while the mission will be securing fighting efficiency of certain military units.
If the mission is clearly formulated and the company follows it, this means that the products/services offered by the company are in high demand in the society. So, objectives of the company should comply with its destination and reproduction conditions, while destination should be subordinated to the mission. In such a way products/services offered by the company would be in high demand.
Product/service cycle
Who sets objectives?
Objective is set by someone who reaches it. But when we’re talking about large companies we’re talking about hundreds and thousands of people who may have their own objectives or they interpret objectives of top management in their own way. This is where human resource management comes into play. The work should be organized in such a way so that when employees reach their goals they will automatically follow destination of the company.
For example, it may happen that very few people will say they are working for a chemical enterprise to produce high quality chemicals. Employees may work for a company having their own preferences and objectives. People want to earn money, work in a company with a positive organization climate, feel socially secured etc. So ideally, by implementing their own goals (earn money, enjoy working atmosphere) employees should follow company destination – produce high quality chemicals.
How to set objectives?
In order to set an objective one should answer the following questions: “What do I want do?”, “What am I able to do?” and “What should I do?” It is ridiculous, but the first question is the most difficult to answer. Correct answer to this question would outline the company vision which is formed based on the current problems.
Identification of problems requires serious analytical work. Future vision is formed based on analytical results combined with creative ideas and preferences of those who set an objective. Evaluation of own capabilities (What am I able to do?) is a very important stage in setting of objectives.
Things to consider when setting an objective
If the objective is set in such a way so that it makes it possible to solve current problems, the objective is supported by existing potential and resources, compliant with the legislature, ethics and ecology issues, one has every reason to consider such an objective achievable.
Summary
- True objectives cannot be partially achieved
- Objective should include detailed description of implementation methods
- One should take into account side effects of objective implementation
- Never confuse objective, destination and mission
- Objectives are to be set by those who will reach them
- Company employees may have own objectives. HR department is to organize the work in such a way so that implementation of employee’s objectives complies with company destination
- Objectives need to be realistic (in terms of finance, legislature, ethical and ecological issues)
