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What are organizational goals?

Organizational goals are strategic objectives that a company's management establishes to outline expected outcomes and guide employees' efforts.

There are many advantages to establishing organizational goals. They guide employee efforts, justify a company's activities and existence, define performance standards, provide constraints for pursuing unnecessary goals and function as behavioral incentives.

For the goals to have business merit, organizations must craft a strategic plan for choosing and meeting them. A company's big picture strategy also includes organizational goals.

Why is having organizational goals important?

Goals can help a business grow and achieve compliance, and establish its big picture financial objectives. Organizations set specific goals to help measure their progress and determine the tasks that must be improved.

Goals need to be the following:

• specific,
• measurable,
• achievable,
• relevant and
• timely.

Together, these criteria form SMART goals, which is a framework businesses use to set organizational goals.

By setting comprehensive, realistic goals, organizations have a clearer path to achieve success and realize their vision. Goal setting, and attaining these goals, can also help an organization achieve increased efficiency, productivity and profitability.

Organizations should communicate goals to engage employees in their work and to achieve the organization's desired results. Having a clear idea of organizational goals helps employees determine their course of action to help the business achieve those goals. Employees should also have the proper tools and resources to help them meet organizational goals.

Setting goals can help companies evaluate employee performance -- for example, creating individual employee goals that support organizational goals and measuring individual performance against those individual goals. While an organization can communicate its organizational goals through formal channels, the most effective and direct way to do so is through employees' direct supervisors. This enables managers to work with their staff to develop SMART goals that align with the organization's goals. Setting organizational goals also helps build workplace harmony because it makes employees work toward attaining similar goals.

While developing sound goals helps organizations with strategic planning, over time, goals might turn out to be unrealistic and need to be modified.

Types of organizational goals

There are three main types of organizational goals:

1. Strategic goals

These are goals -- often big picture, qualitative, long-term goals -- an organization aims to achieve. They may also be referred to as strategic goals.

Strategic goals detail a company's objectives as described in its mission statement or in public statements, such as a corporate charter or annual reports. They help to build the organization's public image and reputation. Such goals are often qualitative and harder to measure.

2. Tactical goals

These are smaller picture, qualitative goals -- often with a quantitative element -- that focus on transforming official goals into operational goals. These are team goals.

Tactical goals bridge the gap between strategic and operative goals. They help connect measurable everyday business processes to the big picture goals outlined in a company's strategic plan.

3. Operative goals

These are goals with measurable steps required to achieve a desired outcome. They're often smaller team goals or individual goals.

Operative goals are the actual, concrete steps an organization intends to take to achieve its purpose. A business's operative goals often don't parallel its official goals; for example, while a nonprofit volunteer organization's main official goal may be community service, limited funding might mean that its operative goal of fundraising will take precedence.

Operative goals are often short-term goals organizations seek to achieve through their operating policies and undertakings and are measured quantitatively. Their success is based on metrics. Companies can outline the specific steps they need to take to achieve operative goals.

Businesses also set operational goals to determine what processes can help them realize operative goals. These include specific, day-to-day operational tasks needed to run a business and help drive scalability and business growth.

Key organizational goals can also include: employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.

Steps for setting organizational goals

A company can take the following general steps when setting up organizational goals:

1. Assess the state of the business. Examine the current state of the business and external factors that affect it, such as industry trends. A SWOT analysis can help identify a company's -- or team within the company -- strengths, weaknesses, opportunities and threats. A PESTLE (political, economic, social, technological, legal, environmental factors) analysis can be useful for accounting for external factors. If setting operational goals, a team might cross-reference its strengths and weaknesses against the larger goals set by the organization.
2. Establish each goal. Decide how the business or team wants to use this information to improve itself. Brainstorm goals and choose those goals that capitalize on opportunities for growth.
3. Prioritize goals. Establish a time frame and delegate the goals to different teams or team members based on responsibility and ranking. Consider external factors when determining goal deadlines.
4. Establish measurement metrics. Determine how the progress of goals will be measured. Some goals may more readily lend themselves to quantitative measurement. Set tangible benchmarks that teams can reach.
5. Integrate goals with processes. Incorporate the goals into the team's or business's way of working and develop methods to achieve them.
6. Communicate goals to those involved. Share the goals with others who weren't immediately involved in devising the goals and look for ways that different teams can work together to reach goals. Make goals visible and communicate them in a clear and concise fashion.
7. Evaluate progress. As time goes by and progress is made or circumstances change, evaluate progress using predefined metrics, and revise goals and optimize processes if appropriate. Encourage feedback to help assess goals and team performance.

Examples of organizational goals

Effective organizational goals might include the following:

• Reduce the time it takes to process online orders for customers.
• Keep software up to date by applying security patches when needed.
• Improve customer service interactions by streamlining call center productivity.
• Become carbon neutral by 2030.

For example, if a company's official goal is to increase customer satisfaction by offering multichannel customer support through various forms of social media, mobile, live chat and email, its tactical goal will be to create a strategy for establishing, supporting and integrating customer support channels. Then smaller operative goals will be used to realize that strategy, matching business processes and individuals to the tasks of establishing and integrating support channels. The organizational goal -- supported by completing successful operative and tactical goals -- will be met when the company captures all business process requests in a unified, central tool to provide effective multichannel support.

The business would then assess the need for increased satisfaction, establish the goals for achieving it with key performance indicators, organize those goals, integrate them into the company's workflow and evaluate their ability to reach those goals based on the metrics.

Another example of an organizational goal might be to incorporate 5G architecture into the business's infrastructure. Learn how business can plan for and build 5G, and the benefits of doing so.