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Business Goals vs. Objectives vs. Strategies vs. Tactics

Brief

Recently I have encountered a few terms which a lot of confusion about them exists among business people. These terms are business goal, objective, strategy and tactic. At first glance, they might look like the same; however they are totally different from organisations’ standpoints and convey distinct concepts at different levels. In the following lines, I explain these terms along with a sample to make it more clear:

Business Goal

  • Goals are the broad primary outcomes towards which effort and actions are directed in a business.
  • They are whats, not hows and a business might have multiple goals to achieve.
  • For example, "we must be a leader player and increase our share in the home loan market".
  • Normally there is no measurement in the definition of a goal and only gives you the general direction of the company.

Business Objective

  • Business objective differs from business goal in the sense that they are measurable and specific.
  • It actually quantifies the thoughts and sets a target so that the strategy can be planned around it.
  • In other words, objectives are measurable steps an organisation takes to achieve its goals.
  • For example, β€œincrease the share in Home Loan segment to 15% by end of 2015 financial year”. Although business goals and objectives are loosely interchangeable, business objectives are subset of business goals.

Business Strategy

  • Strategy is the organization's approach to persuade the customers to buy the products or services.
  • Strategy is how, not what. 
  • On the other hand, strategy is the organization's approach to compete with other organizations to absorb more customers in order to achieve the objectives. 
  • It implies the marketing and advertising campaigns that are planned to attain the objectives. 
  • "For example, convince the customers that our home loan product is the best in the market by TV and Online advertisement."

Tactic

  • Tactics are actions or tools an organization takes to achieve the objectives associated to a strategy.
  • They are what's, not how's. 
  • Strategies and tactics must work in tandem, without tactic the organization has big thinker and no action.
  • In other words, the organization needs both big wings (strategies) and feet (tactics). 
  • For example, β€œCreate a new home loan product with reduced interest rate and zero dollar administration fee.”

To make the best use of these concepts and advance your organization's capabilities, educate your organization on the differences of the terms and explain your expectation from them. A team might be engaged in strategy development, while another team involved in tactics. Ensure that all tactics align to strategies and all strategies take into account the tactics. Don’t forget that goals, objectives, strategies and tactics are dependent to each other and work in tandem.

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