Objective

What is an Objective, what types of Objectives are there and how can it be articulated?

Objective Definition – a desirable state in the future

An objective describes a state in the future which is different from the present state and is desirable. Objectives provide orientation for individuals and organisations, for society, politics, science, research or business and economics. This can easily be illustrated by a few examples:

  • With Agenda 2030, the German Federal Government defines 17 Sustainable Development Objectives for sustainable development.¹
  • In economic terms, Germany is pursuing four goals: Price level stability, high employment, foreign trade equilibrium and steady and appropriate economic growth.²
  • Companies usually define economic, sometimes also ecological or social objectives. These goals are both the basis for entrepreneurial action and the yardstick for measuring corporate success.

 

Objective - a desirable state in the future

What types of objectives exist?

Not only companies as a whole but also parts of companies, divisions or departments define and pursue goals. In addition, there are also project goals, development goals and also employees pursue goals. There are numerous ways and means of distinguishing between objectives:

  • Monetary and non-monetary objectives or quantitative and qualitative objectives
    Monetary objectives are also referred to as quantitative objectives or performance goals, since the respective performance can be clearly defined and measured, e.g. in terms of increasing profits (by x percent), increasing the return on sales (to y percent) or improving liquidity (to z monetary units).
    Non-monetary objectives or qualitative objectives can be, for example, the increase in customer satisfaction, the improvement of the image or the increase in employee satisfaction.
    It is interesting to note that the primarily non-monetary objectives can also have a monetary influence: if employee satisfaction rises, the sickness rate of employees falls, the image improves, customers prefer to buy the company’s products more frequently. This perspective leads to the fact that, despite the formulation of ecological or social objectives, companies often have to put up with the accusation that they are ultimately only concerned with economic objectives.
  • Complementary, competing and indifferent objectives
    These kinds of objectives are about the interaction of the objectives with each other. If different objectives complement each other (increase employee satisfaction, lower illness rate and employee turnover), they hinder each other (low-cost production abroad and lower transport costs) or have no influence on each other.
    Competing objectives are not uncommon in everyday business life, especially since different internal departments, departments or individual employees are in competition with each other. Therefore, in the course of stakeholder management, companies should also identify and analyse individual stakeholders with their motives and attitudes, and communicate with them regularly.
  • Main objectives and secondary objectives or overall objectives and sub-objectives
    Main objectives are more important than secondary objectives, so organisations primarily try to achieve their main objectives. The subobjectives are in a logical, hierarchical relationship to the overall objectives. They help to achieve the overall objectives.
    It is important for organisations to reconcile the objectives of those affected. Target diagrams, which are often used to represent target hierarchies, can be used for visualisation purposes.
  • Strategic and operative objectives or long-term, medium-term and short-term objectives
    Short-term objectives have a time horizon of approx. 1 year, medium-term objectives of 3 to 5 years and long-term objectives of 5 to 10 years. The short-term goals are also regarded as operational goals (e.g. the relaunch of a website), the long-term as strategic objectives (conversion of drive technology in automobile production from gasoline and diesel to electric vehicles).

In the practice of enterprises it frequently comes to a mixture of the different kinds: A short-term, operational goal, can be a monetary main objective, which fights with another objective for internal human resources and financial resources. An operational, non-monetary target may be a sub-target that works in the direction of a monetary and strategic overall objective.

In addition to the types mentioned above, there are also behavioural objectives in organisations, for example, which aim at cooperation within the company and/or behaviour towards customers, partners or competitors. In response to questions about improved internal cooperation, there are often regular retrospectives, the definition of sprint goals, the use of good practices or the documentation of lessons learned.

The wording of objectives

There are different opinions on the formulation of objectives. Below you will find three ways of describing objectives and an alternative approach: 

SMART Formula

Some experts call for SMART objectives, i.e.

  • Specific,
  • Measurable,
  • Attractive,
  • Reasonable,
  • Timed.

Other experts argue not to do so, as this would restrict the thinking of organisations in a VUKA world and the full potential could never be realised.

The KRAFT Objective Model

The KRAFT objectives model was developed by Gabrielle Mueller³. She recommends objects to be

  • Konkret – concrete and specific,
  • Realistisch – reasonable with defined test criteria, as well as
  • Attraktiv – attractive in terms of positive effects. This involves
  • Faehigkeiten – skills and capacities, and a clear
  • Terminplanung – scheduling.

The main difference lies in the consideration of skills, although there are also opinions that the reasonalbe wording according to SMART also covers this point.

SUCCESS Formula

The SUCCESS formula is another acronym and stands for:

  • Subjective – formulate as personally as possible,
  • Urgent – what are the advantages of immediate action?
  • Committed – the commitment is essential for a true objective,
  • Concrete – formulate as specific as possible,
  • Evaluate – a regular review process,
  • Shared – the publication of objectives contributes to the achievement of objectives,
  • Support – goals are advantageous if they can be achieved through the support of others.

 

OKR – Objectives & Key Results

Objectives & Key Results (OKR) take a different approach. The focus is not on the pure wording of objectives, as in the SMART Formula, the KRAFT Objectives Model or the SUCCESS Formula. OKR are a framework for strategy implementation and employee management.

They are based on qualitative objectives and measurable key results. OKR are characterised by short-term planning cycles, limitation of objectives and independent goal formation at team level with alignment to the objectives of the company. With these characteristics they support the expansion of agile principles throughout the organisation, although OKR itself is not an agile objective system.

The importance of objectives

In recent years, there has been increasing discussion about the importance of objectives. Do goals promote extrinsic motivation? Is intrinsic motivation the prerequisite for attractive objectives? What are the prerequisites for goals to have a positive effect on all participants and is this even possible? Do objectives possibly even restrict participants and developments, as they always follow an evolutionary development? The questions about the significance of objectives are manifold, as are the answers. As a suggestion, you will find some quotations on the topic below:

  • “The path is the goal.” – Confucius
  • “Only those who know their destination will find the way.” – Laozi
  • “Many are stubborn about the path once taken, few about the goal.” – Friedrich Nietzsche
  • “Those who have achieved all their goals have chosen them too low.” – Herbert von Karajan
  • “I want to get an A on my maths test on Tuesday.” – Maria, 12 years old
  • “Those who set themselves objectives must ignore the diversity of the world in order not to be distracted – what a pity.” – Author unknown

 

Impuls to discuss:

Is an objective merely a hypothesis of the future?

Notes (in German):

[1] Nachhaltigkeitsziele der Bundesregierung
[2] Gesamtwirtschaftliches Gleichgewicht durch magisches Viereck
[3] Gabriele Müller: Systemisches Coaching im Management
[4] Weitere Ziel-Zitate finden Sie in dieser Sammlung.

Here you will find additional information from our blog:

t2informatik Blog: The 5 myths about the agile target system OKR

The 5 myths about the agile target system OKR

t2informatik Blog: Who needs long-term goals?

Who needs long-term goals?

t2informatik Blog: Strategic Scope Management

 Strategic Scope Management