By setting annual and quarterly Business Objectives, you get the focus, alignment and accountability you need to achieve great things. Everyone is clear on the priorities of the organisation and are pulling in the same direction.
For this to happen, the Business Objectives and Key Results must have buy-in from everyone in the organisation. Make them visible – either electronically or on giant Post It notes around the office – or both!
Without Objectives, how do you communicate the work that needs to be done as an organisation, a team and an individual? You could have a lot of busy people working on a lot of different things, but without Objectives, their productivity could be misdirected.
Business Objectives are not designed to make teams less agile and adaptable, but instead more conscious when they decide to change direction. It ensures they ‘listen’ and frequently adapt rather than getting to the end of the year and realising what they had aimed to achieve is no longer relevant.
So, what are Business Objectives and Key Results?
An Objective is what you want to achieve, and the Key Results are how you will measure whether you have achieved them.
Objectives are set each year and each quarter. They should always be a stretch. Aspirational and something for the organisation to rally around.
Key Results need to be SMART – specific, measurable, achievable, relevant and time-bound.
Individuals own Objectives, but they may have a team or personal Objective associated with them. Ultimately one person reports on whether the Objective is met.
It is important to limit the number of Objectives to focus on. We aim for between three and five, with no more than three Key Results per Objective.
At each annual and quarterly planning session, we collect inputs from several sources: team assessments, cultural catchups, customer feedback, etc. Successful businesses never stop asking their stakeholders (customers, employees, partners, etc.) what is important to them and how the organisation is performing against their expectations. From these inputs, it is clear the work that needs to be done, and the process of setting the Objectives begins.
An example of a rallying annual Objective could be to achieve record revenues while increasing profitability with a Key Result to increase growth profit margin by 25%.
Another example could be to increase employee engagement with a Key Result to record employee engagement index scores for 100% of staff and to implement monthly lunch and learns to communicate key information to employees.
Scoring, reflecting and celebrating gives you a chance to credit those who have contributed to achieving each Objective. It creates a learning opportunity for the next cycle and shows that you are committed to achieving every Objective you set as an organisation.
And lastly, don’t get hung up on a definitive structure. You need to do what’s logical for your organisation. We stress to our customers that it can take two, sometimes three rounds of Objective setting before you feel comfortable with the process. Keep it simple!
If you would like to learn more about setting Business Objectives and see a demonstration on how our data platform embedADAPT captures and scores Business Objectives and Key Results, get in touch.