Monday, 24 March 2014

Strategic goals versus operational objectives

I recently received an email from a Strategic Coffee reader asking for help in understanding the difference between strategic goals and operational objectives.

I think it is easy to get so wrapped up in the definitions of words that we lose sight of our real objective: designing and implementing better strategies! However, I think there are a couple of interesting ideas behind this question which are worth exploring.

I think of goals as broad statements of direction, and of objectives as being Specific, Measurable, Achievable, Realistic and Timebound (that is, SMART). Goals bring a vision alive, whilst objectives translate the goals into actionable units. In an ideal world, I would translate my vision into goals, then break my goals down into more specific SMART objectives, and then design actions and activities to achieve my objectives. That way I can clearly measure progress towards my vision and make adjustments to my activities if I need to.

I think of operational objectives as describing the desired internal state and/or performance of an organisation. Typically, they might relate to the efficiency and/or effectiveness of the business, or some other performance criteria. Strategic objectives, on the other hand relate to progress towards the organisation's goals. They may overlap: for example your strategy may require a certain standard of operational performance. This could lead to goals and objectives which are both strategic and operational. In the Balanced Scorecard framework, the internal business process perspective would typically contain objectives which are both strategic and operational.
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