Setting Strategic Business Goals

Most people know the old adage, “if you fail to plan, you plan to fail,” and many understand that effective business goals must conform to the SMART principles. That is, they should be specific, measurable, attainable, relevant and timely, but few take the next step and develop those various objectives into an effective long-term strategy. Like life, like taxes, business exists as a series of cycles and goals should be set as milestones to mark those cycles to let an entrepreneur plan and evaluate progress on strategic and tactical levels. Smart strategic goals allow a business to target objectives over a long period of perhaps a year or two and the same technique works for shorter-term or ‘tactical’ efforts. Successful planning is based on a structure of good strategic planning (long-term goals) supported by solid tactical planning (short-term goals). After all, it makes little sense to hope to achieve a one-year goal by aiming at a series of flimsy, ad-hoc monthly targets. Businesses of all sizes can benefit from an effective combination of carefully crafted strategic and tactical goals, although the timeframes and complexity involved will be different for each business.

In nearly all cases broad, strategic goals are what determine growth and long-range development. These long-term goals form the basis of a company’s mission. As such, strategic goals will be different for individual businesses. Each specific long-term target can then be divided into smaller achievements that act as a series of tactical milestones to reach the target. Since every goal must be measurable (the ‘M’ in the SMART acronym) milestone dates act as data points to chart progress. The method of following the milestones to reach longer, strategic goals helps keep the business on course, but allows for built-in flexibility necessary to keep competitive and react effectively to changes. Analysis of measurable data at each milestone lets managers evaluate performance and make adjustments to future milestones to do what is necessary to achieve the longer-term company goals.

Some general examples of strategic goals with their tactical components include revenue goals, customer service goals, goals based on public perception, as well as goals targeting web-site or store-front traffic. Consider these and see if any of them might be good additions to your company’s direction:

Revenue Goals

It is a given that most businesses set mid- or long-term revenue goals. These can be expressed in terms of overall dollar value or a percentage improvement over a previous period. For example, a 25% revenue increase over the next fiscal quarter could be a longer-term business goal. Provided it is a realistically attainable achievement it conforms to the SMART principles. In that case tactical goals related to the strategic revenue goal could include conducting market research to help improve advertising and testing and implementing changes to current advertising based on the market research. Of course, each of these tactical goals should be described in specific, measurable terms involving a deadline.

Customer Service Goals

Since business is about delivering satisfaction, customer service should be a paramount concern and monitoring and improving customer/client satisfaction is key. A simple example of a customer service goal is maintaining or improving customer satisfaction based on interview or questionnaire results. Supporting short-term goals might include implementing new help-desk software and addressing specific points from previous questionnaires and interviews. Another tactic to improve customer satisfaction is to run a contest to increase the profile of the customer service questionnaires and increase the volume of responses. Such a contest could be integrated with advertising plans and designed to have positive impact on revenue by actively promoting the company’s good customer relations.

You can see that tactical goals need not be rigorously connected to particular long-term goals, but may support several different strategic goals. In that case they should be evaluated based on how successfully they impact each other relevant goal.

Public Perception Goals

The importance of public perception varies from sector to sector. For example, the hospitality industry must be very concerned about broad public perception and adopt a goal based on strengthening brand-recognition, while most business-to-business enterprises may tend to focus only on a narrow demographic. A hotel chain might have a long-term goal to improve brand-penetration numbers by 10% within the year, while a small business like a local auto-repair shop might aim to increase the number of reference clients and mentions in local media. Branding and public perception can be tricky to evaluate in a scientifically measurable fashion, so a good short-term goal in this case may be to create or implement a reasonable standard for determining public perception in the first place. Press-releases, charitable activities and other types of outreach goals will all contribute to public perception.

Web Site Traffic Goals

Monitoring web site statistics and even brick & mortar storefront traffic is usually easy compared to evaluating public perception and such consumer behavior data can have an impact on several areas of your business and be related to other goals, such as public perception and advertising/revenue goals. To set worthwhile long-term goals for traffic, you will need to relate the statistics you want to affect to other goals. There may be no real benefit to some businesses from an increase in web site traffic. Some industries simply do not enjoy a large volume of web-based interest, while others will struggle to reap any benefit from more web site traffic. For example, large industrial or government civic material suppliers may do all their business via face-to-face meetings. Increasing web site traffic can have a serious cost impact for a business as well as important public perception implications, so be sure to develop sophisticated strategic and tactical goals in this case. ‘Increase our average monthly unique web site hits to 100,000 in six months’ might sound like a good objective, but it is critical to make the most of that traffic, so short-term supporting goals might include implementing various landing-page designs, including a split-testing system, and monitoring hosting and site performance to ensure the increased traffic does not cause service outages.

These example goal categories are worth considering for any type of business, but they are certainly not the only possible types of goals! Employee training and development is another important area that successful companies plan for and there are many others. Good company planning includes a clear set of effective long term goals supported by short-term tactics in all areas relevant to its central purpose.