Goals and Objectives

By: George Spafford

December 26, 2006

When discussing the role of IT in an organization we must take a step back and look at the organization itself. When we hear of problems with alignment between IT and the rest of the firm, this betrays fundamental flaws in the thought processes surrounding what an organization is, how it is structured and managed. Alignment is not an IT problem, it is a management problem as it is management who is tasked with meeting goals and objectives set forth.

To explain, we must first establish some common terms and set the proper context. An organization, commercial or not, is a system comprised of functional areas purposefully assembled to attain a goal, or goals. If there isn’t at least one goal then there isn’t a system because there isn’t a unifying direction. We need the goal to shape the actions of the functional areas. From a management perspective we need to set functional area objectives such that the resulting actions are coordinated to maximize movement towards the organization’s goal. This movement towards a goal is the definition of productivity.

IT is interesting in that it enables functional areas to attain their objectives. IT plays a supporting role and works through other functional areas by using technology to act as a force multiplier to improve productivity. This activity must be performed by working with the other areas and not happen without sufficient involvement instead “pushing” technology at them in the hopes of improving productivity. In terms of roles and responsibilities, functional areas must also play a vital role in engaging IT and ensuring that proper requirements are understood such that services can be properly developed, or purchased, that meet these needs.

At the same time, risks to these functional area objectives and organizational goals need to be understood and properly managed. The reason is that risks introduce variation in terms of to what degree objectives and goals can be met. In other words, management sets the direction but risks can arise and affect how successfully the objects are attained and thus impact the entity’s goals. To counter this, properly architected controls must be implemented. Essentially, controls are processes that serve to manage variation and thus reasonably assure stakeholders that outcomes will fall within an acceptable range as defined by management.

Extending on the above we can identify the following traps to avoid:

• Improper goals – An entity needs to identify why it exists. If it can’t then there are very real problems from the outset. The acronym “SMART” for specific, measurable, realistic and time-bound construction of goals and objectives can help people think about how goals should be structured. Additionally, not only must the goals be clear and readily understandable but also clearly communicated. If more than one goal is identified for an organization then the goal framework must also be properly constructed for internal consistency.
• Improper objectives – Functional areas need objectives that support the attainment of the entity’s goals. If objectives do not support the goal then resources and time are wasted and the goal jeopardized. Far too often objectives are not intentionally designed to support the overall attainment of the goal.
• Focusing on the wrong efforts – Activities and investments that do not support the attainment of functional area objectives must be carefully reviewed. Either the efforts are wasteful or there are previously unknown dependencies driving the efforts that must be scrutinized.
• Not understanding productivity – Additional people, processes and technology do not necessarily relate to improved productivity. Only if there is increased movement towards the goal has productivity been affected.
• Silos and local over optimization – It is possible to do all of the right things within functional areas and still fail. When functional areas are allowed to be silos and there is a failure to understand that an entity is a system, then attempts to improve activities within a silo can negatively impact the attainment of goals. Functional area output can best be thought of as a vector in that there is force and direction. Only by managing these vectors can the organization move in the right direction in a timely, effective, efficient and economical manner.
• Lack of Causality – Stakeholders must understand the relevance of what they do in relation to goals and objectives. They must understand, be they employee, contractor or supplier, that what they do truly matters. The cause and effect relationship must be clear. People must understand that what they do truly makes a difference.
• Lack of Accountability – People must be held accountable for their actions, or inactions, relating to the attainment of objectives and goals. If there isn’t accountability, then human nature and entropy will inevitably intervene. Processes will break down and results will become suboptimal.
• Lack of Risk Management - It is the purposeful planning and coordination of functional area objectives combined with risk management that will optimize a system. Management is tasked with delivering predictable results in accordance with functional area objectives and the overall goals of the organization. If risks are not managed then the resulting variation will jeopardize this mandate.

Without proper goals, an organization will be adrift. Once they are established then functional area objectives must be aligned to maximize the overall entity’s productivity. At the same time, risks must be understood and managed to ensure that objectives and goals are properly safeguarded. IT must be actively involved to assist both with the formulation of strategy and tactical plans due to both its ability to utilize technology as a force magnifier of productivity and to assist with the management of risks. With the proper management thought processes and supporting culture, the potential value of the organization can be optimized.