Operational goals define the routine tasks that are necessary to run an organization. When a company functions efficiently, employees are more productive and can reach their full potential. Profits can be made. Setting operational goals lets you manage a business, allowing it to grow in a scalable manner.
In this article, we’ll go over the different types of business goals that are vital for any organization. We’ll explain the differences between them and describe why operational goals are so important. Then, we’ll offer some suggestions on how to set operational goals with general examples.
What Gets Measured Gets Managed
What’s the difference between setting organizational goals and just giving your employees to-do lists? Goals get measured. As Peter Drucker said, “What gets measured gets managed.” Therefore, turning tasks into goals allows people to oversee businesses in a more comprehensive way.
Think about what happens when you go to the gym to lift weights. Would you pick up a weight without looking at how heavy it was? Would you go through your exercise routine without counting your reps?
Most people wouldn’t. Measuring the amount of weight that you lift and the number of repetitions that you perform allows you to:
- Gauge your current fitness level
- Predict what you need to do to improve
- Take the steps that are necessary to see enhancement
- Know when you’ve improved
The same goes for your business. Measuring your tasks makes it possible for you to:
- Evaluate the current state of business
- Come up with techniques that will help you grow
- Devise and implement action steps
- Analyze your improvement
Although our society values hard work and getting more done in less time, throwing a list of to-dos at your employees won’t necessarily make them more productive. You need to understand how those tasks are going to improve the company. You must also gauge whether your employees’ activities are efficient. Paying someone to do a task that won’t ultimately improve your bottom line is a waste of time.
There Are Three Types of Organizational Goals
How do you decide what to measure? To answer that question, you need to understand the three types of organizational goals, which are:
- Strategic goals
- Tactical goals
- Operational goals
You need all of them to function because they work in a top-down structure.
Strategic goals let executives and upper management determine where they want to go. Basically, you want to get from your current state to a future enhanced position. Strategic goals are the outcome that you desire.
Perhaps you want to produce more products. You might want to reduce overhead. Maybe you want to enter new markets.
Setting strategic goals allows you to evaluate where you are and challenge yourself to end up at a better place.
Some examples of strategic goals include:
- Launch a new product
- Increase customer conversion rates
- Increase revenues
- Diversify your revenue streams
- Improve training programs
Strategic goals are the puzzle pieces that you can move to help you get ahead. They represent large-scale initiatives and are often equivalent to long-term goals.
Some of the benefits of setting strategic goalsl are that they:
- Help you prioritize
- Drive resource allocation
- Guide budgeting activities
- Focus employee efforts
- Influence short-term and long-term marketing and operation plans
- Provide standards to help you determine your efficiency
Once you set strategic goals, you can build up your tactical goals. These further define your strategic objectives. You can plan tactical goals in advance by breaking down your strategic goals.
For example, let’s say that your strategic goal is to boost sales by 15 percent by the end of the quarter. Tactical goals would be the campaigns that you set up in each department to increase sales. One strategic goal should have multiple short-term tactical goals that create the momentum to achieve the overarching objectives.
Tactical goals can build on one another. You may have to accomplish certain tactical goals before you can take on more to produce a consequence. On the other hand, tactical goals can also be independent of one another. You can have several separate tactical goals that you can work on at once to bring about a result. Think of them as the action steps that provide a direct line to your strategic goals.
You don’t always have to establish tactical goals in advance. They may be created rapidly in reaction to issues that come up in real time.
Let’s say that you’ve set a strategic goal to have 100 new accounts opened by the end of the month. A tactical goal would be to have each team member reach out to 50 potential clients per day.
But what would happen if someone left a negative review on your website that caused sales to drop? You might have to rework your tactical goals, focusing on keeping your current clients instead of obtaining new ones.
Another example of a tactical goal is offering a sale that discounts your product by 20 percent. This is slightly lower than your competition’s pricing, and you feel good about getting noticed with the new price. The day before you’re ready to launch the promotion, your competitor drops their price. You might have to change your tactics, dropping your sale price even lower to retain your edge.
Operational goals let you transform your strategic and tactical goals into daily tasks that individuals within an organization can carry out. They’re the ladder of structure that gets delegated to employees so that their work is always within the bounds of your strategic goals.
Typically, the management team sets and oversees operational goals. Other employees carry them out.
Even though operational goals are usually short-term tasks, they are vital to the long-term success of a company. You can’t achieve your greater strategy without operational goals.
Some characteristics that are usually unique to operational goals are:
- One operational goal doesn’t typically straddle more than one department.
- Tied to profit-enhancing or budgeting activities.
- Short term
You should be able to accomplish your operational goals within two years or less.
What Are the Differences Between Strategic, Tactical and Operational Goals?
The main difference between strategic objectives and other goals is that one is your mission or vision. The others are the actions that you take to make your vision come to life.
Strategic goals focus on what you want to achieve. They define an outcome, such as increasing revenue by a certain percentage. It’s necessary to know what you want to accomplish so that you can establish an organizational plan. However, setting strategic goals alone doesn’t tell you how you’re going to get things done.
That’s where tactical and operational goals come in. Tactical and operational goals describe the means by which you’re going to reach your aims.
Strategic goals are typically long-term objectives. Tactical and operational goals are short-term targets. Tactical goals designate the path to achieving strategic goals. Operational goals are the steps that each employee must take along the way.
Whereas strategic goals don’t require constant attention, operational goals do. Operational goals allow things to go smoothly from day to day. Setting them up gives you a list of best practices to consistently meet your bigger-vision aims.
Operational goals also focus on incremental changes. You can certainly set an intention to accomplish grand, sweeping transformations. Your operational goals allow you to break those adjustments down so that you don’t overwhelm your workforce.
Although a strategic goal may be outside of your comfort zone, your operational goals should be easier to handle. As you complete them, the strategic goal becomes more feasible.
Here’s a breakdown that shows you the differences between these types of goals at a glance:
- Strategic goal: improve profits
- Tactical goal: improve margins
- Operational goal: procure wholesale goods at a lower cost
- Operational goal: increase prices
- Tactical goal: increase sales
- Operational goal: create a new lead magnet to boost conversions
- Operational goal: collaborate with new influencers to enhance visibility
- Tactical goal: improve margins
Set SMART Operational Goals
In this example, the operational goals aren’t necessarily as specific as they should be. You should be setting SMART goals so that you can achieve your short-term operational goals efficiently.
SMART goals are:
- Specific – There should be no question about what you want to achieve. The goal should be stated clearly. An example of an unclear goal would be, “Leveraging growth via leadership.” An example of a clear goal would be, “Improving customer service department productivity through daily reviews.”
- Measurable – You must use a measurable unit, such as time or volume so that you know when the goal has been met.
- Achievable – Although you should set challenging goals, don’t make them so demanding that you cause your employees to lose morale.
- Relevant – People need to feel as though they’re contributing to the business. Set operational goals that are relevant to the organization’s strategic goals as well as employees’ personal objectives.
- Time-bound – Establish a deadline for your goal. This can be shifted as necessary. If you do end up moving a deadline, use the change to help you set more realistic time-bound goals the next time.
We’ll show you how to set SMART operational goals using the example of “Collaborate with new influencers to enhance visibility.”
First, you have to define the following terms to make the goal specific:
- Collaborate – Ask influencers to review your product
- Influencers – People who have 20,000 or more followers on Instagram
- Visibility – Grow your fan base
Next, decide how you will measure the results. From an operational goals standpoint, this should probably be based on the number of influencers that you reach out to or create relationships with.
Assess whether your goal is achievable. Do influencers tend to review products like yours? You’ll also need to understand your employees’ workload. How much time does it take to establish a relationship with an influencer?
By this point, you’ll likely have to brainstorm more details and action steps. You’ll need to know:
- What you’re going to say to the influencers and what department is going to write up the template that you use to message them
- Which employees will send out the initial message and whether they’ll be the same individuals who continue the conversation
- How many messages it takes for the agreement to be put in place
You might even have a meeting with your employees before proceeding to make sure that everyone is on board and feels comfortable with the standards of this goal.
Is this goal relevant to your industry, business objectives and current operational flow? If you don’t have products to review or companies in your field don’t typically utilize influencer marketing, you could be doing something revolutionary. On the other hand, you might be wasting your time.
Is your team equipped to handle the tasks that are required of them? If this is outside the norm, you’ll have to make it relevant if you want it to work. Offering training or setting up a new department may be helpful.
Finally, set a deadline. How many influencers do you want to secure by the end of the project? When will the project end? You might be able to come up with a realistic time frame by determining how many influencers can be contacted each day or week.
What Are the Benefits of Setting Operational Goals?
Imagine that you’ve launched your own business. Initially, you may just think that you need enough money to survive the next month. That’s an example of a short-term goal. It doesn’t involve planning or forward thinking.
The most successful businesses set various levels of goals that support the others to reach the desired outcome. If you want to be in business 10 years from now, you need a 10-year goal. That isn’t your operational goal. However, it probably represents your mission, which will drive the direction of your strategic, tactical and operational goals.
As you move into the present, you have to establish operational goals because they regulate day-to-day productivity and morale. You must set operational goals within the constraints of a strategy. Having a plethora of operational goals without a bigger vision won’t help you achieve success. In fact, a strategy helps you filter the goals that don’t align with your mission.
Here are some of the reasons that you should set operational goals.
They Give Employees Direction
What motivates you to go to work every day? Besides the paycheck, you probably feel better about your job when you feel like you’re making a difference. Your work life is likely to be rewarding when it’s not overwhelming and you know that you’re making a valuable contribution to your company.
One way to do this is to recognize that you’re following through with goals that align with the organization’s mission. As an employee, you can set your own goals. However, you need to work with a supervisor to ensure that you’re on the same page as everyone else.
When multiple employees are aligned in their efforts, everything goes more smoothly. Your boss doesn’t have to micromanaging you because you’re already moving in the right direction.
Your operational goals provide the to-do list for your days, weeks and months. You waste less time doing futile tasks, and you can prioritize your obligations.
They Improve Synergy and Collaboration
Even though operational goals are usually specific to one department, they must work in tandem with other teams’ tasks. If they don’t, the cogs in your machine won’t function in a way that propels you forward.
Making operational goals known is one way to enhance collaboration among employees. Google does this. The organization posts all employees’ goals in a company-wide directory.
If you knew that your goals were going to be broadcast to your colleagues, you would probably work harder to make them great. More importantly, seeing your peers’ objectives might give you ideas. It would help you stay motivated, knowing that your goals are just as essential to the entire organization’s functioning.
Goals can improve collaboration between departments. They involve a shared vision, which can enhance productivity and prevent obstacles from getting in the way.
Let’s say that you roll out a new way for your clients to engage with your company. You’ve planned and implemented a membership site. Your marketing and product development teams have organized the forum wonderfully, and it’s ready to be launched.
On the big day, however, your servers become overloaded. You realize that you haven’t set up operational goals that work together across the different departments. Because your IT team wasn’t ready for the increase in traffic, it wasn’t able to handle the demands of the new membership site.
Creating operational goals with the bigger strategy in mind could have prevented this.
Operational goals also make sure that everyone in an organization speaks the same language. Creating goals using industry jargon isn’t helpful. Those goals may sound impressive, but they have to mean something to the person who tries to achieve them.
When you create SMART goals, you have to make sure that your goals are clear. When you do so, you also ensure that all of the people who make up your company are communicating effectively.
If things aren’t working well in your organization, you can look at your goals for feedback. Perhaps they were crafted in a confusing manner. Maybe everyone isn’t on the same page. Reevaluate your goals to implement policies that will be effective and efficient.
They Help You Respond to Short-Term Issues
Operational goals let you tackle problems. It’s not always easy to reallocate resources to deal with pressing issues that arise in the workplace.
But if you have a strategy for crafting operational goals, you can quickly whip a plan into shape. You’ll also be able to analyze which tasks can be overlooked as you shuffle your goals around. Those with longer deadlines might be able to drop to the wayside as you deal with more urgent matters.
They Enhance Employee Commitment
Does your company have a problem with turnover? Are your employees unmotivated?
When you connect your daily workflow to your big vision, you have a chance to keep your employees’ interest. They can invest in your mission and understand that the company won’t function as well without them. They may be less likely to drop the ball when they see how their daily tasks align with ultimate success.
They Let You Measure Success
Speaking of success, how do you know when you’ve achieved it? Setting goals lets you analyze your accomplishments and pat yourself on the back when you consistently realize your mission.
However, you can only gauge your success if your goals are measurable. This takes us back to setting SMART goals.
Think of operational goals like a checklist in a scavenger hunt. If you don’t have the checklist and you set players off in search of various items, how will you know that they’ve succeeded? You can take their word for it when they’re done with the hunt.
However, it will be much easier to realistically assess the winner when you have a specific way to measure their accomplishments. In this scenario, you’d like them to snap a photo or collect the object when they find it.
Imagine if the players set off on the scavenger hunt without a list of things to hunt for. They’d wander around aimlessly, unsure of whether they’re actually being productive. The same thing happens when you don’t set operational goals in the workplace.
They Cultivate Empathy
Do you ever feel resentful that other employees don’t have to work as hard as you do? Do you really know what they do all day anyway?
Setting operational goals can eliminate some of that resentment, especially when your employees can see everyone else’s objectives. Workers will become more familiar with the challenges and constraints that other employees have to deal with.
When they learn about others’ work, they may even come up with ideas to improve the workflow on their end. Goals help workers see other employees’ perspectives and encourage a culture of mindfulness.
Operational goals may even facilitate interaction between employees. You can set goals with communication in mind. Even if you don’t, though, the act of establishing, reviewing and evaluating goals across individuals and departments can help employees engage with each other.
Plus, when you can celebrate the small wins, you create a culture of trust in the workplace. If you don’t set operational goals, you have to wait until you reach your big objectives or complete a comprehensive project before reveling in your success.
Rejoicing in more subtle achievements maintains momentum. It can keep your workers focused on the bigger prize without burning out along the way.
What Are Some Examples of Operational Goals?
Now that you’ve learned more about operational goals, you might want some examples that you can incorporate into your business. Here are some illustrations of operational goals.
Improve Safety Performance
You can’t establish a culture of trust and productivity if employees are concerned about their safety. These types of operational goals move you beyond compliance and enhance organizational excellence.
Some operational goals related to this objective include:
- Reduce injury rates by 50 percent.
- Check your workstation for hazards every day
- Inspect equipment and materials before you use them
- Post safety procedures and rules
- Report accidents and incidents
- Hold regular safety training session
- Audit safety measures every week
Improve Product Development
When it comes to product quality, you need to set operational goals that relate to product development and the broader business objectives.
- Make a list of performance factors that your customers value
- Implement a market research program
- Create an email funnel to get customer feedback
- Outsource product research
- Create five new products by the end of the year
Improve Customer Service
More unsatisfied than satisfied customers tend to speak out about your business. You don’t want to lose your reputation because of one questionable interaction. Improving your customer service goals can lead to increased revenue. Here are some examples:
- Answer customer inquiries within one business day
- Increase customer loyalty
- Improve customer satisfaction
- Increase the lifetime value of a client
- Decrease the number of repeat customer contacts
- Improve customer service rep satisfaction
Improve Human Resources
The human resource department oversees scheduling, recruiting and retention. Their goals should revolve around labor cost management, hiring and training.
Some examples of operational human resources goals include:
- Post job vacancies regularly
- Build and maintain relationships in professional networks
- Prepare job offers
- Conduct new employee orientation
- Document employees’ completion of training
- Administer and analyze employee opinion surveys
We would like to note that the examples listed above aren’t as specific or measurable as they should be. That’s because those variables differ depending on the situation. If you’re creating operational goals for your company, you can feel free to use our examples as a jumping-off guide.
Add metrics so that you can track your success. Create deadlines so that you stay motivated. Make your goals clear so that there is no ambiguity.
Then, watch your business rise to the next level.