Hierarchy of objectives

Organisations formulate objectives in hierarchies. Because we tend to be caught-up in the importance we attach to our own roles and responsibilities, managers often hardly notice this, but there are almost always a hierarchy of objectives; and then I am not talking about strategic objectives that are translated into tactical and then into operational objectives, but about objectives that are seemingly on the “same level” of decision-making.

When we gather to formulate objectives for our business, managers from diverse components of the organisation come ready to “defend their turf” and to emphasise the importance of what they are doing. The results is that the strategic plan reflect a multiple of objectives across products -, goods,- and services ranges, across divisions (HR, Finance, Product, R&D, etc.) and across different market segments. Yet, ultimately, if properly integrated, they can actually be all related to a handful of objectives that truly represent the performance expectations of the organisation.

Organisations achieve objectives by executing strategies. Strategies represent the organisation’s approach towards achieving objectives, considering a volatile and dynamic environment in which decisions are taken. Once strategies have been selected and properly formulated, organisational activities are identified and assigned to implement it. Activities are performed by incumbents of posts and jobs. The higher in the hierarchy, the broader and less specific are the responsibilities and duties attached to a post. Ultimately, it is actually all about creating a structure, or hierarchy, to guide (and lead to) the implementation of strategies and achievement of strategic objectives.

Throughout the hierarchy, provision is made for specialists to perform the detailed activities required to implement strategies assigned to specific line functions, market segments, support functions, product – and service ranges. They ultimately “line up” in a value chain will must let to the sale of specific products and/or services to specified market segments; leading, in turn, to profit. Throughout this value chain, objectives and method of achieving them (strategies, tactics, operations, projects, and so forth) will be find, aligned to people responsible for making sure that they are achieved. Ultimately, they culminate in a few broadly defined performance objectives that represent the “final” outcome-expectations of the organisation. 

As there are a multiple of objectives throughout the value chain, and people responsible for achieving them, and only a few “ultimate” objectives, there will also be only one of two top managers (perhaps the CEO and COO) in the organisation responsible for achieving them.

Organisations often fall in the trap of going into too much detail when formulating strategic objectives (and the strategies to achieve them). This set the entire organisation, but especially the top managers, up for failure, because it divide their attention and focus (the so-called 80/20-principle; focus is placed on the 80% of matters that do not add real value, while neglecting the 20% that actually do). I do not think that is humanly possible for a single person to effectively focus on (and produce results in respect of) more than five or (at the most) seven objectives without starting losing focus and, in the process, synergy-of-effort. 

Remember a golden rule: It is line functions in an organisation that deliver the goods (that is adding value, and ultimately achieve strategic objectives), and not support functions (except if the “support function” is actually the “line function” of the organisation, such as agencies responsible for finances or HR in the public sector). Do not incorporate staff (support) functions into your organisation’s ultimate strategies objectives. This does not mean that support functions are less important (they certainly are not, and the skills they bring are often vital for the organisation to achieve its ultimate strategic objectives). However, they will always be support, and not line; and therefore not ultimate objectives of the organisation.

The principle is actually simple: If you want to achieve the few truly strategic objectives of your organisation, you must integrate all objectives in the value chain in your efforts (including staff functions). If you do not manage to do that, you will not be able to achieve the few truly strategic objectives.

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