why is objective setting important for organisational success?

When trying to set objectives for your company it is important to know what your organisation's objectives are. To a manager of a small team, project, business or department, this may seem an abstract question far removed from the pressures of daily management life.

Yet it is a starting-point for the process of doing something to improve customer satisfaction. Corporate objectives need to be taken into account when setting your own.

One of the best ways of working out your objectives is to imagine what would happen if what you manage no longer existed. Who would suffer, and in what way? This is particularly illuminating for people managing small cogs within the wheels of a large organisation — what value do they add to the organisation's end-services or products? Do the people they provide a service to really need it or want it? Could these people obtain it more cheaply or easily elsewhere?

It is also illuminating if you are a manager in (part of) a public or not-for-profit service because it will make you think about the things people depend on you for or expect from you.

It helps you clarify the promises that you have to ensure are honoured, and which different sets of people are concerned. It is a good starting-point to the personal planning process in any organisation, as the small business in the following example illustrates.

Why are we doing this?
Two people in business in Slovakia designed, and then had manufactured, unusual jewellery made from titanium. They went into business because they liked designing jewellery and did not want to work in a large organisation, even if there were jobs available. So when they asked themselves what would happen if they no longer existed, the flippant answer was `nothing much'. Would anyone even notice?

But then they thought about how much they and their friends liked wearing the jewellery they designed, and how they felt comfortable with the image of themselves that the jewellery projected. They believed quite strongly that there must be others in the world — or at least in Bratislava! — who would share this feel-good factor when wearing jewellery such as theirs.

Belief was important — they were not the sort of people who could design and sell jewellery they thought was ugly —and this developed into their own version of a 'corporate objective': to identify and reach all those people in Bratislava who would like to buy and wear the type of designer jewellery they produced.

However, they realised they did not know what feelings their existing customers experienced when wearing this jewellery or how long these feelings lasted, let alone why they bought the jewellery in the first place. And they had no idea how many others might get pleasure from wearing their jewellery.

What sort of people might they be? Would the value they attached to such enjoyment be enough to make them pay the prices the business needed to charge to cover the numerous mark-ups of distributors and retailers? They needed to find out more about their existing and potential customers, and how to reach these people with their products.

For instance, were there ways of bypassing distributors? It was not just that they needed to do market research — they needed to think about the whole way they conducted their business with their customers in mind.

Once you have identified the objective of your organisation, you can generate your own objectives to fit within it, and these will be the objectives that the rest of your plan will aim to fulfil. Next week we’ll looking at this, and how to make these objectives SMART...
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