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SMART Strategic Objectives

SMART Strategic Objectives

At the end of Leadership, you compiled your Strategic Objective document. It's an impressive list of goals that detail the vision for your business. It is time to take those goals and bring them to life by adding responsibilities, action plans and measurements to them.

You have probably heard people setting "goals" for their business that sound something like this:

"My business is going to really take off." "My production department are going to reduce their expenses."

If you have spent any time thinking about goals (and we know that you have) you know that none of the above examples could be classified as goals at all. For something to be a goal, it must have certain properties. Those properties are defined by the acronym SMART.


An objective must be clear and unambiguous. A general and weak objective is "increasing profitability" a strong specific objective is "My business will increase its net profitability by 12% by January 31st."


An effective objective must be measurable. Often, in business, we deal with things that are difficult to quantify. An objective that states "Increased Customer Loyalty" is vague and very difficult to measure. A better objective would be "Increased returning customers by 5% by Jan 31st." This is where we can begin to see the significance of Key Performance Indicators (KPIs). We are talking about objectives, and KPIs are the way we will measure our progress toward them.


Objectives should be designed to push your business, your teams, your employees, and yourself toward higher achievement. Feel free to stretch out with your long-term goals; if your vision is to be the biggest and the best in your industry, there is no reason you can't make that happen. Just be careful not to set yourself up for disappointment with your short-term objectives. If you are a startup company, you are not likely to be the biggest and best in your industry by your second month of operation. Unobtainable objectives will be a hard sell to your employees, and you need them to be completely on board. When designing your objectives, include the actions that will take place to achieve your objectives. As we progress through this book, you'll see how those action plans become the systems that power and organize your business. Systemizing your business will move it up the Value Pyramid, dramatically increase its value, and allow you to step away from it when the time is right.


The idea here is that your objectives need to relate upwards. Position objectives relate to the objectives of the department. Departmental objectives relate to the objectives of the business as a whole, and the top level strategic objectives relate to, reinforce, and carry out your Vision. What this means is that everything you design to do in your business is focused in the same direction - moving your business up to the next level of the Value Pyramid.


This last property of your objectives grounds them in reality. An objective with no time reference is not likely to be accomplished. This protects your objectives from being pushed aside in favour of the little day to day disturbances that will try to steal your focus.

smart objectives

Revisit your Strategic Objectives. Are they SMART?

Departmental Objectives

In the same way that your business has strategic objectives that guide and focus the actions of your business as a whole, each department or function has objectives that guide and focus its actions. A department's objectives align with and support the overall company strategic objectives. If you have a strategic objective for your business of growing your sales volume by 5% over the next year, that objective will cascade down to the sales and marketing departments. The sales department will look at that objective and create an action plan that will lead to the fulfillment of the objective. Not only that, but the sales department will create measurements (KPIs) to show the action plan's success at making progress towards the objective. Performance indicators let all stakeholders know in real time how effective our plans and our actions are at achieving our objectives. The monitoring and analysis of KPIs allow us to make changes to our action plans. Focused and accessible KPIs allow a business to make appropriate changes that lead to the fulfillment of departmental and, in turn, strategic objectives.

Performance Objectives

You can likely see where this is going. Your strategic objectives are supported by your departmental objectives in theory, but we still haven't actually performed any work. The real key to all of this is that the objectives cascade down to your individual positions and are established, embedded, upheld, and carried out by your employees. In exactly the same way that your strategic objectives cascaded down to the departmental level, they cascade down one more step to the position / employee level. If the strategic objective is to grow your sales volume by 5% over the next year, and your sales department's objective is to grow its sales volume by 5% over the next year, the objectives of the individual positions in your company must support that goal. It may be that your company's plan to increase sales is to have each salesperson produce 5% more sales by adding a new sales technology, increasing incentives, or adding new products to the pipeline. It may be that your plan involves adding additional territories, or taking advantage of a competitors weakness in a particular territory in which case, the overall sales increase might not be equally distributed between your salespeople. It may even be that your plan involves adding people to your sales force to reach your objectives. Whatever the case, the important thing to note is you have a plan to reach your objectives, and a way to measure its effectiveness.

Review your Strategic Map from Leadership and set up objectives for each of your departments. This can be done with your managers. Your departmental objectives need to align with and support your company's strategic objectives. Don't let this bog you down; do use it for an opportunity to increase communication between yourself and your managers. In the following chapter, we will create Position Outlines for your managers that will draw on these Departmental Objectives.

Have your managers set up objectives for each of the employees in their department. Your performance objectives need to align with and support your departmental objectives. Don't let this bog you down; do use it for an opportunity to increase communication between yourself, your managers, and your employees. In the following chapter, you will create Position Outlines for each of your employees, and you will draw from the Objectives you create here.