I have seen many companies that set their business goals and objectives on a monthly or sometimes even weekly basis. This method of business goal setting leads quite often to endless meetings without a proper outcome. Everyone leaves the meeting room frustrated and the overall company performance suffers. What do companies do wrong? As we learn what objectives and key results are we understand how companies should set their business goals and objectives and we also understand the most important lesson of all: understanding the difference between business goals and objectives!

Business Goals and Objectives are different

The biggest mistake companies make is seeing their company goals and business objectives as the same thing and hence setting those at the same time. To worsen that many businesses also tend to define their business goals and objectives on a monthly or even worse weekly basis. Hence ending up losing efficiency. So what is the actual difference? It is necessary to understand that business goals are a long term target a wish for the outcome of a company, like a mission and vision. Goals can be set on a yearly but even better on a five yearly basis plus a vision and mission for the company. Whereas objectives should be set yearly and quarterly. Business goals are the long term dream of the company while objectives are the near future targets that need to be achieved to reach that overall goal!

Structure of Business Goals, Objectives and Key Results

The following diagram illustrates the relationship between business goals and objectives.

business goals and objectives structure

Setting business goals and objectives

First it is important to define and then set the overall business goal. Keep in mind that goals are a bit vague and not too specific. To set an appropriate business goal ask yourself and brainstorm with your close team members. After this is done it is time to move on to defining the objectives. Again keep in mind your target is to get as close as possible to your business goal, so set the objective for the common year accordingly. After having set the yearly objective move on to defining quarterly objectives. You should have between 3 and 5 objectives per quarter.

Now you know in what sequel you need to set your business goals and objectives. It is important to remember that your objectives lead towards your goal and the goal is not set as specific as the objectives are. To remember that read the article about the difference between goals and objectives.

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