But What are Goals?
Goals are simply defined as the aims or objectives that an enterprise or individual strives to accomplish within a certain period of time (Latham, Ganegoda and Locke, 2013). According to the goal-setting theory, the higher the goal, the higher the performance and the lower or easier the goal the lower the performance. Goals can be broadly classified as structural, contextual, functional and temporal. Goals can motivate their achievement especially if they are formulated with the SMART framework. Feasible goals must be SMART which implies that they should be specific, measurable, attainable, relevant and time-bound (Latham, Ganegoda and Locke, 2013).
Goals in general terms can also be defined as predetermined targets that an entity or an individual sets out to accomplish over a given period (Laoyan, 2021). One common example of a goal with most businesses is the mission statement that spells what the business plans to accomplish as well as the actions that it will perform to accomplish it. Mission statements serve to guide the business throughout its business objectives.
Source: Sam (2020)
What are some of the Ways for enhancing business goals?
• Determining what you want the goals to be. These have to be goals that push forward the business and will require figuring out the top priorities fr the business such as profitability, customer service, debt collection among others.
• Be specific- this implies setting unambiguous goals such as by being exact in specifying the amounts that the company targets for revenues.
• Commitment to the goals- this entails the determination to achieve the goals by being practical as opposed to passivity (Kappel, 2020).
• Meeting regularly to check progress- this enables tracking the progress and milestones of the goals. This can be done by the use of spreadsheets and keeping the team invigorated or motivated by communicating the achievements and any required revisions.
• Holding oneself accountable for the goals- this implies being accountable for the deadlines and avoiding blame games for any missed deadlines.
• Celebrating milestones- this entails celebrating the achievements that have been accomplished along the way. This helps in re-energizing and motivating the team (Kappel, 2020).
Goal setting is an important function of management that every business organization should undertake. Despite the essence of goals in business, not every manager knows how to set goals effectively. According to (Ogbeiwi, 2018), a study conducted in the UK in 2001 showed that UK companies especially those in the small scale category were very poor in setting goals. Most managers and employees do not know the SMART acronym hence they could not know how to formulate objectives that adhere to the SMART framework (Ogbeiwi, 2018).
SMART Framework Illustration
Goals are foundational blocks that form the basis on which companies and their programs are built. Goals are critical management tools that all result-oriented companies must formulate.
What is the Importance of Business Goals?
Businesses should take it as a necessary step to set goals because they give the business direction and measure employees performance. There are four major reasons why managers set goals for their businesses.
• Assessing performance- this helps in monitoring the business whether it’s achieving its targets and in case the business is not achieving its goals, changes are prioritized.
• With the power of knowledge-if, an employee clearly understands the goals of the business it becomes more convenient and easier for them to run their daily operations and make effective decisions that will positively impact the organization.
• Measuring success- any successful enterprise must constantly try to grow, improve and become more effective and efficient in the long run. Any goals that are set can help enhance the success of the business.
• Directing leadership- Goals that are set and understood can help employees to understand the objectives of the business and drive their achievement. When the company’s leaders are furnished with the details of what the company wants to achieve in the future, they gain the confidence to take initiatives such as hiring workers and acquiring the right equipment required for the performance of the organization’s tasks.
What are the Principles for Setting Goals?
According to (Jomeh, 2021), five goal-setting principles were set by Locke and Latham. These are:
• Clarity
• Challenge
• Commitment
• Feedback, and
• Tax complexity
Scientific goal setting can be traced back to the time and motion studies that were conducted by Frederick Taylor in the 20th Century whereby he assigned tasks as goals to blue-collar job workers (Ogbeiwi, 2018).
Types of Goals
What about the types of goals? There are generally four types of goals based on time. These are:
• Lifetime goals- these goals take between one year and a lifetime to be achieved.
• Long-term goals- These are a persons working goals that need to have a time frame which is typically range between 5 or 10 years. The challenge as put out by Bill Gates was that most people tend to overestimate what they can do in 1 year and underestimate what they can do in 10year (Develop Good Habits, 2025).
• Short-term goals- It should be noted that short-term goals aren’t always short. This is because they can range from one month, six months to even one year. They are usually the stepping stone goals to attain life goals.
• Stepping Stone Goals- These are action related goals that allow a person or business to reach its bigger goals. They are usually viewed as the materials that build short-term goals which in turn allows one to reach their long-term and long-life goals.
Depending on the owner and function, there are generally seven types of goals to be set. These are: Career goals, financial goals, personal development goals, spiritual goals, educational goals, relationship goals, and physical and health goals.
Why do businesses need financial targets and goals?
Businesses must be fiscally feasible in order to keep their operations running. Financial goals are therefore a critical part of enterprise goals and targets.
What are some of the examples of financial goals?
These include:
• Target profits margins
• Target business revenues
• Target savings plan
• Cost reduction targets
• Minimize the operating expenses
• Property purchase target
• Financial sustainability during hard economic times
• Return on investment
Profitability and business revenues are basically the most inevitable goals for business enterprises. Business revenues include sales income, rent on business premises and interests on business investments. The operating expenses include rent, utilities, interest payments, taxes, advertising, materials and licenses (Gartenstein, 2019).
Financial goals can also be defined as personal big picture objectives that a person sets on how they will save and spend the money that they need Schwahn 2019). Money is a major driver of the key decisions that both businesses and individuals make. Setting sound financial targets can help managers take control of key business decisions that companies have to make.
Financial targets are plans that relate to the field of money management skills that an individual or company must consider for success and growth. Good financial targets endows one with positive energy that enables them to push forward even in the toughest of situations too to achieve their goals (Mcbride, 2021).
What are the examples of financial goals?
Some example of financial goals include:
• Paying off debts
• Buying a home
• Starting a business
• Saving for a vacation
• Saving for retirement
• Feeling financially secure
• Building an emergency fund
Before setting financial goals it is important to identify what one needs first as a goal starts with need recognition.
What about the Importance of Financial Goals?
• Financial goals are important in shaping the future of a person or business. This is because financial goals just like any other goals have the power to shape a person’s actions. Because of this cardinal function of financial goals, they should be included in a person’s or company’s budget.
• Financial goals help in tracking the progress and motivating a person to keep going on in their financial dreams.
• They also help a person in developing healthy financial habits such as savings and calculated expenditure in the future. In addition to these three benefits, financial goals can help a person in achieving a purchase that they would not achieve without proper financial planning (Schwahn, 2019).
What are Enterprise Targets?
Every enterprise regardless of the industry exists to create some value for its stakeholders whether it is profit-based or non-profit. The focus on the creation of value for the stakeholders demand that enterprises make some targets or goals to work on to achieve their overall objective. These goals are what we call enterprise targets. Without goals, no enterprise will exist to provide value for the stakeholders and deliver on its mission or even reach its vision hence making paramount the essence of goals for any enterprise (Orbus Software, 2021).
Source: Silman (2015)
According to Sparx System (2021), enterprise goals are a breakdown of the enterprise strategies and aspirations that an enterprise plans to accomplish. The importance of enterprise targets is that they can be used as anchor points of reference for strategy implementation.
In the age of information technology, the feasibility and achievement of enterprise goals are highly dependent on the firm’s ability to leverage technology. This requires the alignment of both the enterprise goals business strategy to the company’s IT strategy (Orbus Software, 2021).
What is the Difference between Between and targets?
Although these two terms are often used interchangeably, there is some difference between the two. As goals the bigger picture of what an enterprise wants to achieve in the future, targets are smaller, interim steps that are set towards the achievement of a particular goal. Targets should be aligned along with the details and deadlines of the larger goals (Nibusiness, 2021). Goals are not achieved overnight hence the reason why there should be small operational targets to act as stepping stones towards the realization of a company’s wider vision.
How do we Set Business Performance Targets?
There is no way an enterprise will be able to evaluate its performance without the standards against which to measure the effectiveness and efficiency of its activities. One of such ways is to set up performance target criteria. These can act as key performance indicators (KPI’s) for the business organization. Good enterprise targets must follow the SMART criteria just like goals whereby they must be specific, measurable, achievable, realistic and time based (Nibusiness, 2021).
What is the Importance of Setting Targets?
• They are useful in achieving and assessing customer satisfaction
• They help in determining if the company performance is increasing or dropping
• They help in determining whether business profits are growing or declining.
• They help in tracking the achievement of strategic goals
• They also help in assigning duties and responsibilities in an organization
To achieve enterprise as planned, it is important to keep on constantly reviewing the targets for improvement or the introduction of new ones once the old ones are achieved (Nubusiness, 2021).
What are Examples of Enterprise Targets?
Every business needs to set targets for its success or achievement (Marr, 2021). Based on their function, the enterprise targets can be divided into the following:
• Customer targets talk about what the enterprise wants to achieve in the future in the line of customer and customer service.
• Financial targets define how the company will generate its revenues, make profits and maintain sound cash flow.
• Operational targets detail goals for the processes and the need to improve the performance of daily activities.
• Resource targets define the key resources that the company prides itself in as well as plans to maintain, improve and mobilise even more resources in the future.
• Competition and Risk target those goals that define the external factors that influence the business as well as outline the measures for dealing with those risks and threats.
References
Ogbeiwi, O. (2018) General Concepts of Goals and GoalSettingg in Healthcare: A Narrative Review. Journal of Management & Organization 27 (2): 1-18. https://doi.org/10.1017/jmo.2018.11
Latham, G. Ganegoda, D. and Locke, E. (2013) Goal-Setting. The Wiley-Blackwell Handbook of Individual Differences: 577-587. https://doi.org/10.1002/9781444343120.ch21
Jomeh, J. (2021) SMART Goals- A Goal-Setting Technique. https://www.apppm.man.dtu.dk/index.php/SMART_goals:_A_goal-setting_technique
Schwahn, L. (2019) Financial Goals: Definition and Examples. Nerdwallet. https://www.nerdwallet.com/article/finance/financial-goals-definition-examples
Orbus Software (2021) Enterprise Goals in an IT Context. https://orbussoftware.com/resources/blog/article/enterprise-goals-in-an-it-context
Chron Contributor (2020) What is the Difference Between Goals &Targets in Business? Chron. https://www.smallbusiness.chron.com/writing-organizations-goals-objectives-81531.html
Nibusiness (2021) Measure Performance and Set Targets. Info.co.uk. https://www.nubusinessinfo.co.uk/content/set-business-performance-targets
Marr, B. (2021) How Do You Set The Right Targets for Your Business? here are Some Tips. Bernard Marr& Co. https://www.bernardmarr.com/how-do-you-set-the-right-targets-for-your-business-here-are-some-top-tips/
Sparx Systems (2021) Goals and Objectives. Sparx Systems Pty Lt https://www.sparxsystems.com/enterprise-architect_user_uide/15.2/guidebooks/ea_goals_and_objectives.html
Laoyan, S. (2021) Setting Business Goals: The First Step to a Successful Business. Asana. https://www.asana.com/resources/business-goals-examples
Kappel, M. (2020) Become a Pro at Setting Business Goals in the New Year with These 6 Tips. Forbes. https://www.forbes.com/sites/mikekappel/2020/12/10/become-a-pro-at-setting-business-goals-in-the-new-year-with-these-6-tips/?sh=698090023900
Silman, I (2015). Targets, Time Pressure, and Reaching Expert. Chess.com. https://www.chess.com/article/view/targets-time-pressure-and-reaching-the-expert-level
Sam, I. (2020) Prioritizing Goals Based on Regating. Global Entrepreneur Network. https://www.global-entrepreneur.com/2020/02/06/prioritizing-goals-based-on-re-gating