Measurable Objectives

By

Dr. Alfred M. Coke

The number two common error in business plans is improperly written objectives. Usually a list of activities is improperly labeled as objectives. When activities are measured, instead of results, the bottom line to your business plan remains unchanged. This article outlines considerations for converting strategic goals into tough, measurable objectives that achieve your desired performance.

Objectives do not just appear in your business plan. They are deduced from your Strategic Goals. Each strategic Goal should have a number of smaller milestones or Objectives. The design is to accomplish incremental progress toward the end goal over time. Collective, when completed, the Objectives reach the Strategic Goal.

All objectives must be SMART. Verify that each objective is Specific, Measurable, Achievable, Realistic, and has a Time attached. If the candidate doesn’t pass this test it is probably not a true Objective.

There is some flexibility in formatting an Objective.

1. The objectives may be written as an accumulation of time in sequence. For example:
   1. Achieve sales revenue of 1 billion by year end 2007
   2. Achieve sales revenue of 1.5 billion by year end 2009
2. It may also be written as an annual or ongoing accomplishment. For example:
   1. Achieve annual profit margin of 33%
   2. Achieve 5% annual process improvement.
3. To make performance measures easy, it is normal to set the objectives across all goals in the same timeframe. For example objectives from two strategic goals might be written:
   1. Goal #1, Objective #1, Achieve sales revenue of 1 billion by year end 2007.
   2. Goal #2, Objective #1, Enter three new foreign markets by year end 2007.

There are inherent dangers in setting Objectives. The common mistake is to confuse them with Strategies or activities. Performance should never be based on Strategies because they only define how you plan to execute your business plan. Objectives on the other hand define what you wish to accomplish. For example:

Poor Objective:            To conduct a customer satisfaction survey. This is just an activity. Also it does not meet the SMART code.

Good Objective:          Improve customer satisfaction by 12% by 2007. This is an end result and meets the SMART code.

In Summary: Use three test elements to develop powerful, performance objectives.

1.      Write the objective using the SMART code.

2.      Ask if it is a “how” or a “what?” If it is a “how” then it is probably a strategy. If it is an end state or what you want to accomplish it is probably an objective.

3.      If you are still unsure ask a follow-up question. So what? What if we complete the item? For example: To conduct a customer satisfaction survey. So what? What did you get for the activity? What are you trying to achieve? If the answer is to improve customer satisfaction, write the objective as “Improve customer satisfaction by 12% by 2007.”