The Power of Corporate Objectives
by Matt, on 6 Jul 2021
What’s at the top of your to-do list at work?
Are those top 2-3 things the most critical? Why so?
I often catch myself pushing softball tasks to the top of my list, giving myself an easy win or two while tougher challenges lurk somewhere further down.
When I do, I remind myself that while it’s okay to occasionally warm up with something quick-and-easy, my business needs me to prioritize more important things.
However, ranking tasks in order of difficulty can be easier than ranking them according to what’s more important to the business.
This is where clearly defined corporate objectives come into play.
Let’s take a closer look at where objectives fit into the bigger strategic planning picture, and some key benefits they provide.
Purpose, Vision, Strategy, Objectives
It sounds cliché, but everything really does start with your company’s purpose – why you’re in business.
Clarity of purpose can dramatically improve decision making throughout your company.
When you or any member of your team is unsure what to prioritize or which path to follow, choosing the option that most closely aligns with your purpose is almost always a sound approach.
Ideally, you will also have developed, refined, and shared a vision for what the company is hoping to achieve in the mid- to long-term.
The vision statement establishes a destination that your team members can see in their mind’s eye – something to which they can aspire. They get it. And they’re excited to try and get there.
While an overarching purpose motivates and unites the team, the vision gives them something relatable to work towards, together.
Even so, having a great vision doesn’t necessarily mean you’re going to get there.
Left to their own devices, your team might set off in different directions, each thinking they know the best way of getting from here to there.
Corporate strategy is your calculated approach for realizing the vision, considering the risks, uncertainties, resources, and alternatives that are in play.
It’s a roadmap you’ve decided the business should follow, even if it’s not the approach individual team members would have chosen for themselves.
Corporate strategy is also a great place to turn when faced with uncertainty about what to do next or what choice to make.
The option that seems to align most closely with the company’s strategy is likely to be a good choice.
You’ve probably guessed what comes next – corporate objectives.
Corporate strategy is inevitably quite general, leaving a lot of room for interpretation as to which elements should be prioritized over others.
It’s the leadership team’s responsibility to define specific objectives that the business will aim to hit within a given period – usually measured in quarters because that’s enough time to make meaningful progress without setting goals that seem too far out of reach.
How many objectives should your company set? Reading around, you'll find recommendations for anything from three to twelve. We recommend setting five to seven annual corporate objectives.
By limiting your objectives, you are also defining, by omission, what is less urgent and can be deferred in pursuit of the specified goals.
This can be tough!
At times, everything seems to be critical, urgent, important – even key to the business’ survival.
In practice, you can never tackle everything at once. If everything is truly a crisis, it’s time to pull the emergency brake and rethink the business.
One measure of a great leader is their ability to figure out what’s important now (handily abbreviated to WIN) and what can be tackled later.
Set corporate objectives based on WIN and leave your team to figure out how much else they can get done once they’re on track to meet those goals.
Let’s talk about the benefits.
Alignment and Focus
As we’ve already mentioned, talented individuals don’t necessarily approach things in the same way or the same order.
In business as in team sports, brilliant individual performances aren’t always a guarantee of success. Players must combine their talents and coordinate their efforts to win against similarly talented teams with similar objectives.
We see this when a team that boasts one or more superstars gets beaten by a less talented but better organized outfit.
This is the first benefit: alignment.
Getting your team aligned behind a clearly understood set of objectives frees them to show off their talents, without getting bogged down in discussions (or even conflict) about whose plan to follow or which way to go about it.
Another benefit is focus.
Appropriately written objectives encourage your team to focus on desired behaviors and performance beyond production and the balance sheet.
For example, objectives related to diversity, inclusiveness, and environmental impact have become an important component of most companies’ strategies in recent years.
Measure and Manage
It’s another tired cliché: what you don’t measure you can’t manage.
In this case, we’re taking the adage to a different level – measuring the company’s performance in terms of progress toward the things that matter most and then managing resources to optimize that performance.
Without an appropriate set of corporate objectives, companies myopically focus on units of production and financial performance.
See our comment above on the importance of D&I and ESG goals!
Setting measurable objectives can be tricky for some of these areas, but the effort is worthwhile.
Without specific, measurable definitions that make clear what success looks like, you risk becoming one of those companies that gets accused of paying lip service to important issues while obfuscating their actual performance.
Balancing Multiple Anchors
To achieve balanced results, your company should have several corporate objectives covering distinct, important areas.
Then, like any sort of balance, there will be forces acting in different directions, to which you’ll have to pay attention if the balance is to be maintained.
With corporate objectives, there’s a balance to strike between generating value for shareholders (returns, if they are capital investors) and doing the right things along social and environmental axes - and you should have goals for both.
Competing forces can be more subtle and harder to spot.
For example, technical and engineering staff are often perfectionists. Releasing a product before it is completely ready leaves a bad taste in their mouth.
Meanwhile, customer facing teams want to meet the users’ needs in every way possible – faster and better than the competition.
This can lead to a features and performance arms race, frustrating the engineering team as they get inundated with short-fuse requests and diverting the wider team’s focus from serving one group of customers better than anyone else.
Balancing market share objectives with product performance and quality goals helps your team avoid chasing competitors’ “shiny objects” and stay focused on establishing a great product and loyal customer base.
Things to Ponder
- Does your company have a clear “strategy stack” built on purpose, vision, strategy, and objectives?
- Do your corporate objectives cover the most important issues, without pulling the team in too many directions at once?
- Are your objectives specific and measurable, providing a clear statement of what success looks like?
- Which objectives are vulnerable to competing forces, meaning you must monitor them to ensure an appropriate balance is maintained?
- How frequently are you stopping to review your progress, so that adjustments can be made that maximize the company’s overall progress?