Ask Us How: Achieving Organisation Objectives
Published on October 16, 2013 under NSW Business Chamber Partnership
I am sure you are thinking “I would be extremely happy if I achieved all my organizational objectives” each year. How do you do this? Well the first question that arises is what are your organizational objectives?
The traditional process for establishing organizational objectives is to start with strategic planning.
WHAT IS STRATEGIC PLANNING?
Strategic planning is the process of deciding on objectives of the organization, on changes in these objectives, on the resources used to attain these objectives, and on the policies that are to govern the acquisition, use and disposition of these objectives.
It is not possible to do everything at once, so it is critical to decide on the key short term and long term objectives of your company.
Very acute Business Leaders are following basic principals to deliver exceptional profits and business expansion and excelling against their competitors.
I am impressed to see new and innovative businesses penetrate competitive markets and succeed – an example on a large scale is Google in the US and in Australia on a smaller scale is Nudie Drinks. Each of these organizations entered very competitive markets yet offered a differentiated and improved product and definitely succeeded.
CONSIDER YOUR CORPORTATE STRATEGY
Porter, the inventor behind the “Competitive Advantage Model” determined that a company should adopt a competitive strategy which is intended to achieve some form of competitive advantage for the company.
Porter believed there are three generic strategies for competitive advantage:
- Cost leadership means the lowest cost producer in the industry (i.e. low price and high volume)
- Differentiation relates to delivering a product that is unique in the market
- Focus involves a restriction of activities by selecting and focusing on a market segment or product
Have you ever been to a restaurant that had really beautiful food at really cheap prices only to find they increased their prices and dropped their quality – do they still exist or do you still go to the restaurant? For many of you your business competitive advantage has happened intrinsically due to your innovative ideas or long term market positioning.
The important lesson to learn from Porter is no matter what size your business you need to establish a competitive strategy and not try to be everything to everyone.
For example if you are a Cost Leadership organization your resources will need to be cheaper (i.e staff, offices etc) and your operations more streamlined to cope with high volume production and your advertising fairly intense to emphasis “unbeatable prices” or “discounts”.
Alternatively if you have a focused strategy, your organization will be specialised and superior with a specific niche, often requiring more expensive resources and focused marketing.
We are constantly battling a world of change, so for you the next step in deciding on your business strategy is to understand that your organization must continue to develop its products, markets and manufacturing or operational methods, if it is to avoid eventual extinction!
This calls for strategic decisions about product/market development and manufacturing/service development. An obvious analogy is to recognise that the top 100 ASX listed companies 20 years ago will be very different to the top 100 companies today.
IMPLEMENT YOUR CORPORATE STRATEGY
Well now that you understand your company’s purpose (i.e competitive advantage and product development strategy) you can start implementing the process necessary to achieve your objectives and ensure that every contributor to the business is engaged in achieving these goals.
In essence, corporate objective setting should relate to key factors for business success such as profitability, market share, growth, cashflow, customer satisfaction or quality of the firms products. It is fascinating that the growth of Google was the focus on product and customer satisfaction and not on profitability, the principal being if we can develop a superior product to the likes of Yahoo then market share, revenue and profitability will follow.
The corporate objectives require specific unit objectives, such as increasing your number of customers by 10% or reducing the length of time in producing the product or delivering the service.
By deciding on the most important or primary objectives then all else will follow. Trade off’s between objectives will occur, for example a company’s objective of achieving significant profit growth may be at the expense of the quality of the firms product or marketing expenditure for future years sales. If market share is the key objective then this will often be at the expense of profitability.
I find this critical objective decision making process invaluable – your organization has limited resources so:
- how will the resources be managed
- how will you market
- how will you improve your operations
You can now answer these questions based on your corporate strategy. Some other fundamental rules in delivering your corporate strategy include:
- Empower key team members within your organisation to deliver on the strategies within their areas of control. By empowering your team you are then giving them ownership, which has always proven to be powerful in engaging and delivering success.
- Put in place some core Key Performance Indicators that driver the strategies and review on a regular basis.
- Depending on the size of your organisation it is important to closely monitor your strategies on a monthly / bi-monthly / quarterly basis. This enables you to review what is/isn’t working and make adjustments proactively.
- Be observant with what the market is doing and ensure your business is able to be flexible with these changes
- Hold an annual strategy meeting with the key players within your organisation. This is a key time to shift focus, discuss what has/hasn’t been delivered and why and to put in place new strategies.
Designing, thinking, building and implementing strategies for your business should be a time of great buzz and excitement.
You have a real opportunity to take your business from where it is today – to where you want it to be in a short period of time if you truly invest in building a set of strategies that will enable you to meet organizational objectives.
Ensure you engage your team as well as any external advisors that can add value to the process to get the best outcomes.