A SWOT analysis (strengths, weaknesses, opportunities, threats) is an exercise undertaken by organizations to understand their current status and assess how to improve.
Organizational standards and objectives are important elements in any business plan because they guide managerial decision-making. To create reachable objectives, an organization needs to understand where it is, where it wants to go, and who it is competing against. A company's standards define how it should act, while its objectives determine what actions it will take. Combining standards and objectives allows management to create a business strategy.
Organizations are like individuals: they have values, beliefs, and goals. They want to promote a particular image to stakeholders, otherwise known as a brand. Before a company can create standards, it is important for management to clarify the mission, values, and vision. If any of these are not complete or correlative, management must redefine and re-think what the company stands for.
Once mission, values, and vision are established, the organization must set down standards (both operational and value-driven). These standards need to be enforceable and teachable and must be communicated with clarity and simplicity. It is important that employees understand the standards they are required to meet and the consequences of failing to live up to these expectations. Without employee buy-in the standards will be devoid of meaning and applicability, so management should focus a great deal of time and effort instilling standards through communication and observation.
Once standards are outlined and met by management and their subordinates, the organization can begin to apply this operational paradigm to a series of short-term and long-term objectives.
A goal (or objective) is the desired result that an organization envisions, plans, and makes a commitment to achieve. This can be a personal or organizational end-point of development. Organizationally, goal management consists of recognizing or inferring goals for individual team members, abandoning outdated goals, identifying and resolving conflicting goals, and prioritizing goals for optimal team-collaboration and effective operations.
When creating a set of objectives, it is important for the organization to complete a self-evaluation, usually through tools like SWOT analysis (strength, weaknesses, opportunities, threats). A SWOT analysis helps the company understand where it can achieve competitive advantage by pinpointing what it does well (strengths) and where the opportunities lie with those actions. Organizations must also be aware of what they have sacrificed to achieve their goals (i.e., weaknesses), and where threats in the marketplace may reduce their ability to create profitability (threats). Objectives must take competitive advantage into account; otherwise, the organization lacks a value-added proposition.
Once the company has a good understanding of its strengths and weaknesses, management is able to create a timeline of reachable objectives. It is important to create milestones for these objectives and identify which departments within the organization will be responsible for each one. Accountability and time-sensitivity should be explicitly stated and rigorously followed. The next question is how to set these and how to identify and delineate the importance of one objective relative to another.
One model of organizing objectives uses hierarchies. The items listed may be organized in a hierarchy of means and ends and numbered as follows: Top Rank Objective (TRO), Second Rank Objective, Third Rank Objective, etc. From any rank, the objective in a lower rank answers the question "How? " and the objective in a higher rank answers the question "Why?" The exception is the Top Rank Objective (TRO): there is no answer to the "Why?" question. That is how the TRO is defined.
People typically pursue several goals at once. Goal congruency refers to how well the goals complement each other. Does goal A appear compatible with goal B? Do they fit together to form a unified strategy? Goal hierarchy consists of the nesting of one or more goals within other, compatible goals.
Another useful approach recommends having short-term goals, medium-term goals, and long-term goals. In this model, one can expect to attain short-term goals fairly easily: they stand just slightly out of reach. At the other extreme, long-term goals appear very difficult–almost impossible to attain. Using one goal as a stepping stone to another involves goal sequencing: achieve the easy short-term goals, then step up to the medium-term and then the long-term goals. Goal sequencing can create a goal stairway.