What are business goals?

Business goals are specific, measurable, and relevant objectives that a company sets to achieve within a defined timeframe. These objectives aren’t just plucked out of nowhere — they are often considered and must be achievable. Each goal should provide clear direction and purpose for the organization, as each one has the potential to guide decision-making and resource allocation.

Each goal’s timeframe can vary, from a short-term, year-long goal to a long-term achievement spanning several years. Goals often focus on areas such as:

• Financial performance
• Customer satisfaction
• Operational efficiency
• Employee management

To this end, many organizations use software (such as Adobe Workfront) to track goals in real time.

Some industry-specific business goals could be:

Financial Industry. Increase customer acquisition by 15% in the next fiscal year. This goal focuses on growth and market share, measurable through the number of new customers acquired.

Healthcare technology. Improve patient engagement with the telehealth platform by 20% within six months, as measured by increased app usage and appointment scheduling. This goal centers on enhancing user experience and platform adoption, measurable through specific metrics related to app usage and appointment scheduling.

Setting business goals and objectives has always been essential to workplace success. But only recently have executives begun to see the power behind corporate goal setting frameworks like objectives and key results (OKR)s, SMART goals, and BHAG goals. Here, we’ll discuss why they’re so critical to driving performance, provide some business goal examples as well as how you can begin setting goals in your own company.

In this guide:

• Setting business goals.
• Business goal frameworks.
• Benefits of business goals.
• Challenges of setting business goals.
• Set business goals with Workfront.

Step 1: Get executive input before setting business goals.

Business goals are typically set by executives who determine the most important company-level strategic objectives. Certain companies may use a SWOT analysis to identify strengths, weaknesses, opportunities, and threats, then set goals based on how to utilize each to their advantage. It is important to ensure business goal alignment between executive and internal marketing sponsors.

One useful exercise may be visualizing where you’d like the company to be in five years. From there, use that information to take the next step and determine where you’d like to be within the next year.

Step 2: Choose business goals and objectives for one year.

It is essential to have a clear vision for company growth over the next five years. However, your business goals should never extend beyond one year. Otherwise, you’re looking at long-term strategies, not goals. Without the ability to focus on broken down, measurable goals, it is difficult to identify priority business initiatives.

To set yearly goals during annual planning, identify yearly goals that will need to be accomplished to support your five-year vision. For instance, if you aim to have 500,000 users within five years, your goal for the first year might be to focus on expanding your global business. Another goal might be to successfully launch a new product.

Step 3: Analyze business goals by quarter.

Once yearly business goals are set, break them down by identifying what you need to accomplish for each quarter in a quarterly plan. Additionally, set specific dates for your key results. Recall that the objective is the thing to be accomplished, and the key result is the set of 1 to –3 KPIs to measure the achievement of the objective. It can be either a qualitative milestone or a quantified metric.

Step 4: Make SMART goals.

In addition to making business goals time-bound, you should also verify that they satisfy the other components of the SMART criteria (that is, specific, measurable, achievable, relevant, and time-bound). By using these five guidelines to create your business goals, you’ll ensure clarity and make it easier to track progress when it comes time to follow through on your strategic goals.

Step 5: Set no more than 3 to 5 OKRs.

At any given time, you should have no more than 3 to 5 OKRs per quarter. Having more OKRs can make it too difficult to focus on goals. The OKRs a company selects are its most important priorities.

Step 6: Use business goal examples.

The business goals and objectives you set for your company will depend on several key factors, including your current opportunities and threats, as discussed in the first point. Thus, no two organizations will have the exact same goals. However, it can still be helpful to look at other companies’ corporate goals for guidance.

Step 7: Cascade down and align up.

After setting 3 to 5 SMART company goals for the quarter, you can then begin cascading goals down through departments or units. These will then be broken down further among teams and individuals. Keep in mind that individuals should also be setting some of their own OKRs, creating a system by which goals are both cascaded down and contributed up. The end result is an aligned network of goals that gives all employees visibility into how their contributions are driving progress on company priorities.

Step 8: Measure business goals regularly.

You’ve set your SMART business goals, cascaded your objectives, and things are looking good — but don’t pat yourself on the back just yet. It’s essential that these goals are regularly monitored so you’re not left with a sudden rush at the end of the year and so that accountability can be taken. If you don’t measure your goals, you can’t make changes to ensure you try to meet them. Once set, you should monitor the progress of your strategic business goals.

Why setting business goals matters.

Setting and tracking business goals is crucial to success in any organization. Business goals are the ultimate objectives, and you need to track your progress toward them to ensure you’re staying ahead of the competition. One of the primary reasons business goals aren’t met is that the outcomes of these goals aren’t measured.

That’s why it’s crucial to ensure that the business’s goals and objectives are measurable in the first place. Doing so allows you to monitor progress continually, so you know whether you’re on track, falling behind, or if the business goal needs to be put on hold to address other priorities.

For these reasons, setting business goals should be SMART:

• Specific. Eliminate ambiguity with well-defined goals. You don’t want to get more people through your front door; you want to increase foot traffic by 25% by next year.
• Measurable. Choose goals that can be tracked, assessed, and measured with quantifiable data. You don’t want to boost efficiency; you want to increase efficiency by up to a chosen percentage. If your goal is to increase your charity contributions, measure the number of charity days or the amount you’re donating in comparison to your current level.
• Achievable. Don’t just make goals for the sake of it — back your business goals with data, so you ensure they’re achievable.
• Relevant. Relevant business goals align with your business’s core objectives and values. When setting goals, think of the bigger picture. If a goal isn’t aligned with your company’s values, it’s unlikely that you’ll achieve it.
• Time-bound. Setting business goals is well and good, but if there isn’t a clearly defined time to attain them, there may be no urgency or accountability.

When you set SMART goals for your business, they naturally become easier to track. Since workers already know exactly what’s expected of them because you’ve set clear business goals, it will be easier for managers to discuss progress toward these goals. They can ensure everything is on track and, if not, offer course-correcting guidance to get their teams headed in the right direction. That way, by the time deadlines roll around, the goals will be completed.

What’s the difference between business strategy goals and objectives?

While these terms are often used interchangeably, business goals tend to be longer-term achievements, such as increasing profitability, entering new markets, or capturing a larger market share. Objectives, on the other hand, focus more on short-term, specific criteria – such as increasing your customer satisfaction score by ten points or trying to boost website traffic by 5% within the next quarter. You could think of it as goals are the direction, and objectives are the action.

Types of business goals.

There are several methods for setting business goals. When deciding on a goal-setting framework for your organization, consider each option and select one that aligns with your culture and approach. Some of the most popular goal-setting frameworks for businesses include:

Objectives and key results (OKRs).

Objectives and key results are business goals organized around specific objectives and the key results required to achieve them.

Unlike traditional goal-setting methods that often focus on numerous, less ambitious targets, OKRs emphasize a smaller number of highly ambitious objectives, each supported by 3 to 5 measurable key results. An objective is a qualitative, aspirational goal that describes what the organization aims to achieve. It should be concise, inspirational, and easily understood by all team members. A well-defined objective provides a clear direction and motivates the team toward a shared vision.

Key results are the specific, measurable, achievable, relevant, and time-bound (SMART) metrics that demonstrate how the objective will be achieved. They provide a quantifiable way to track progress and hold teams accountable. These metrics should be specific enough to allow for precise measurement and tracking of progress.

For example, an objective might be “Increase market share.” Corresponding key results could include: “Increase brand awareness by 20% as measured by social media engagement,” “Gain 10 new key clients,” and “Achieve a 5% increase in sales revenue.”

Learn more about OKR.

SMART goals.

SMART goals stand for Specific, Measurable, Attainable, Relevant, and Time-Bound. Using the SMART method for goal setting ensures that business goals are well defined and focused on execution over a specified time frame.

By adhering to these five SMART principles, businesses can create goals that are clear, focused, and actionable. This structured approach facilitates effective planning, resource allocation, progress tracking, and ultimately, the achievement of ambitious business objectives. Regular review and adjustments are crucial to maintaining alignment with the overall strategy and adapting to unforeseen circumstances. The SMART framework is not merely a goal-setting technique; it is a management tool that promotes clarity, accountability, and successful execution.

Learn more about SMART goals.

Management by objectives (MBO).

Management by objectives (MBO) is a framework that focuses on managing a business based on its specific needs and goals. The MBO goal-setting process starts by defining top business goals and using them to determine employees’ objectives.

Once objectives are set, regular progress reviews are conducted to monitor performance and make necessary adjustments. This iterative process allows for flexibility and adaptation to changing circumstances. Open communication and collaboration between managers and employees are essential for success. Managers provide support and guidance, while employees actively participate in setting and achieving their objectives.

The benefits of using the MBO framework include increased employee engagement, improved performance, enhanced accountability, and better alignment between individual and organizational goals. However, successful implementation requires strong leadership, clear communication, and a commitment to regular monitoring and feedback. Without these elements, MBO can become a bureaucratic exercise rather than a powerful tool for driving organizational success. The effectiveness of MBO hinges on the active participation of all stakeholders and a commitment to continuous improvement.

Big hairy audacious goal (BHAG).

A big hairy audacious goal is a long-term business goal, typically a 10- to 25-year goal, used as a big target for the organization to achieve. BHAGs are used to guide current and future employees towards the organization’s long-term business goals.

The process of setting a BHAG often involves extensive strategic planning, stakeholder engagement, and a thorough understanding of the organization’s capabilities and limitations. It’s a process that requires careful consideration, as a poorly defined or unrealistic BHAG can be detrimental. However, when effectively implemented, a BHAG can serve as a powerful guiding force, shaping the organization’s culture, driving innovation, and ultimately, leading to extraordinary achievements. The long-term perspective of a BHAG also helps attract and retain top talent, as individuals are drawn to organizations with a clear vision and ambitious goals.

Learn more about BHAG.

Choosing the right business goals sets your company in the best possible direction. Business goals are essential for keeping your entire organization focused on desirable outcomes, and they also help ensure that everyone is supporting the most critical priorities in your company at this time. When done properly, business goal setting can even motivate teams, drive engagement, and accelerate results.

Too often, companies fail to hit their goals. Usually, it’s because goals weren’t properly set in the first place, or they weren’t specific or measurable to begin with. As a result, there’s no way for people to know if they’re on track. They waste time doing busy work and putting out fires instead of making collective progress on the company’s most critical priorities.

1. Business goals and objectives support alignment.

When you strategically set business goals using a system like OKRs, you can achieve corporate alignment. There is a direct correlation between effective goal setting, alignment, and financial performance. Companies that have aligned goals tend to outperform organizations that lack a direct connection between top company priorities and employees’ individual goals.

2. Company goals help you execute your business strategy.

One of the most common reasons organizations fail to achieve their goals is that there’s a disconnect between the CEO’s priorities and the employees’ goals. When you set top company goals and cascade them from the top down, you ensure that all employees’ goals directly support the most important priorities for the company. As a result, every contributor endorses the execution of your business strategy.

Moreover, cascaded and aligned goals allow all teams to see each other’s goals. This prevents redundant efforts and provides managers with a clear understanding of exactly what their direct reports are responsible for, allowing them to track progress and coach their team members to stay focused.

3. Goal setting improves employee engagement and retention.

Another benefit of business goal setting is an uptick in employee retention. Gallup research indicates that companies with a dissatisfied workforce unsurprisingly have a 51% higher rate of turnover than those with a satisfied workforce, along with lower productivity rates and increased employee absences. Because goal setting can drive employee satisfaction by giving teams a clear understanding of how their contributions support company progress, corporate goal setting is one of the most powerful tools you can use to retain your top talent.

4. Setting business goals generates a sense of focus and urgency.

Employee satisfaction and engagement are two benefits but setting intelligent and strategic business goals can create a sense of focus and urgency. Done right, business goals can motivate employees to work towards them, as each goal can give a sense of direction.

5. Strategic goals support innovation.

By setting achievable yet challenging business goals, you encourage innovation. If goals are carefully managed, you can inspire creativity, innovation, and exploratory thinking that promote new ideas and strategies. Tracking those goals can highlight areas for improvement – or even adaptation. Tip the scale too far, though, and it could directly impact morale.

There are a set of common challenges that can impact SMART goals, which could lead to inefficiencies (or worse, negative progress). Potential SMART pitfalls include setting goals that are too lofty, which can directly impact morale, cause unwarranted stress, and lead to burnout. Likewise, failing to monitor goals can cause them to be missed, fizzle out, or become unattainable. As things change, your company should remain agile and adaptable based on the data. This itself will require strong and transparent communication.

The goal itself should inspire action — if you become too caught up in a particular goal, it may come at the expense of everything else. Focus on the journey, what your team is doing, and what is working or not.

Adobe Workfront streamlines project planning, tracking, and management, aligning teams with strategic goals. Its central platform facilitates planning, resource management, and metric tracking, using visual data and large language model-powered analytics for clear communication and informed decision-making. Workfront connects daily tasks to strategic outcomes, promoting team focus and measurable progress toward key objectives. Empower your teams and achieve incredible results.

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