You have an idea for a business: how should you set company goals?

Posted by

The company concept formulated in the mission statement is often general and difficult to apply on a daily basis. It should be kept in mind, but you will need a precise specification of achievements in the future. This is the role of company goals.

Objectives can be divided into many types, but the most useful are short-term and long-term goals. The latter are often called strategic, adding some seriousness to them from the point of view of Nowak’s pocket. Short-term goals mean intentions for the next 12 months, while long-term goals are plans for 3 to 5 years. In the 1990s, Sony Corp. set a long-term goal to reduce its share of the consumer electronics market, but short-term goals had to take into account the company’s strong ties to that market.

But what is the company’s main goal? Some management experts say briefly – profit. However, it is important to realize that the company’s profit is the result of achieving other goals that face a company operating in the market. You need to be aware that there is a whole bundle of goals in the company:

  • economic, such as profit in a given year, increased profitability, cost reduction,
  • technical and production, such as improving quality, growth and simplifying production at the same time,
  • social, including the aspirations of employees and managers, their needs for promotion, prestige,
  • market, i.e. satisfying the needs of customers with the products and services sold.

In fact, only the achievement of market goals guarantees the achievement of other company goals. The company works for customers, it is their requirements and needs that are most important.

It is worth knowing that if you decide to set up a company of several people, at every step there will be conflicts between the goals of individual partners or departments responsible for a particular part of the company. In any company, regardless of its size, conflicts between different departments are very evident. For example, in any car concern, the goal of marketing is to adapt the versions, colors and prices of cars to the requirements of customers. This goal is completely at odds with the goals of the production department cells, for which constant changes in equipment and car colors are difficult to implement. Accounting, too, would like to limit the influence of marketing, since promotion produces results that are difficult to measure and entail high costs. Human resources departments would like to take care of employees’ pockets and their continuous professional development. These goals are positive for production departments, but the company’s finances suffer. This is just the tip of the iceberg. At Jan Nowak’s company, the situation will be very similar.

When setting all goals in the company, it is important to remember the “smart” principle. Every goal both in the business plan and in the practical operation of the company must be very clear, which means that it should be:

  • specific – clearly defined and understandable to all concerned,
  • measurable – measurable, in order to see to what extent we have achieved it,
  • achievable – attainable, otherwise all other planning activities make no sense,
  • related – closely related to the company’s mission,
  • timed – defined in time, otherwise it will never be achieved.