Transparency of Business Objectives

Photo by Alexandre Lion on Unsplash

We are at the third article in the “transparency of …” series. So far, we have covered the basic concepts of transparency and went into more detail on the top-level business concept – the company vision. Both are very important. This one, transparency of business objectives, is where things often go sideways. I will start with reasons why we degrade transparency of business objectives over time. Then, I will explain all the benefits of ensuring business objectives are continually transparent. Finally, I will provide a few ways to improve transparency right away.

Let’s first define business objectives to avoid any misinterpretation. Business objectives are clear business goals within a limited timeframe. They are reviewed periodically – in a range between 1 and 5 years.

The entropy of business objective transparency

The tricky thing about business objectives is that they are concrete but not specific. At least, not like features are. As such, they usually start as very clear but muddle as time progresses. It usually happens because of three reasons:

  1. The realities on the field are different from what we expected when setting objectives,
  2. The benefits are felt much later in the process,
  3. It’s hard to measure them accurately.

The first one is sometimes based on the too optimistic expectations and sometimes on the changes that alter the variables. Either way, if we ignore it, the business objective becomes irrelevant, and people stop caring whether they report progress. If we try to adapt it as time progresses, we risk adding a layer of confusion which reduces the overall clarity of all business objectives. People will wonder whether we’d do it again and decide that working on what they care about is the safest bet.

The other two reasons are related to the complexity measurement – one temporal and the other qualitative. Both obscure the progress on the business objective and make it harder to declare success.

Business objective progress is rarely tracked because value is measured much later. Graph above demonstrates how we discover that the ROI is negative 20 months after the creation of the objective, 10 months after it’s “success”

There are ways to mitigate these issues and reduce entropy, but let’s talk about the benefits first.

Benefits of transparent business objectives

Business objectives are the key elements of strategic planning. Their value is in their relationship with various processes and initiatives that are to implement them. By keeping objectives transparent and people accountable, we ensure that people know their part in ensuring success and who the other participants are.

Business objectives are drivers of change. When a manager decides whether to dedicate resources to A or B, she will usually look at business objectives for guidance, not the company vision and mission. She will know who else works on that objective and recycle some work done by others. She eliminates waste this way. She can also exploit the opportunities created by the work of others and compound the benefits. The company is larger than the sum of its parts, and the potential to prevent waste through business objectives makes it real.

For a leader, transparency of business objectives from the bottom-up is critical. When a leader receives enough feedback, he can decide whether to give up or double down on a business objective. In turn, this optimizes growth even more.

Transparent objectives promote discussion. It’s not only up to the leaders to modify the course and double down on a specific business objective. With a broader context and enough information, everyone can make tactical decisions that will benefit the company as a whole. The empowerment of people is not only good for morale. It also reduces the communication overhead of the decision-making process.

How to improve it

You can vastly improve the effectiveness of your business objectives just by addressing the three abovementioned issues. First, make your business objectives SMART. The process of writing it this way will be enough to create a high-quality business objective that covers the majority of potential holes. If you don’t have time or patience for this, consider getting someone to help you. Once you have the SMART business objective, you should work further on the M (measurable) and A (attainable) parts.

By Canadian Management Centre

When creating something measurable, think about the cost of measuring and the value it provides. Measurement is pointless if it doesn’t affect the decision-making process. You need to discover and discover early whether you should double down or give up on an objective. That means you need to design measurements that are (relatively) cheap and repeatable and whose result will affect future decisions. When the results can’t be obtained until much later (for example – # licenses sold), you need to look in the historical data and design measurements that can be measured now and have historically translated into the desired outcome. Yes, we are working with layers upon layers of abstractions, but it’s still better than closing your eyes and hoping everything turns out well. The more historical data you have at hand, the better. All these abstractions are not perfect, so you should consider having risk thresholds assigned, to dampen the effect of measurement accuracy. How to Measure Anything” by Douglas Hubbard is a great book that helps you grapple with the concept of measurements in the decision-making process.

Expanding on the example above, had we used value estimation based on historical data, we would discover that the ROI is negative around month 8. We now have a chance to make a decision to redirect ~30% of remaining cost to something else, or to look at ways to improve value

As for the attainable part, sometimes it’s not obvious that your goal is unrealistic. But you have to consider it nevertheless. Allow yourself the freedom to modify targets and deadlines so that they don’t affect the workflow. Set thresholds, and reassess often. Reassess especially early on, when it’s cheap to pull out. The same thing goes if you underestimated the targets, don’t be afraid to up them.

And the most important of all, keep it simple. Having too many ultra-detailed business objectives makes it less clear about the main focus, and the effort dilutes.

Ideally, you should have 3-5 goals that are clear and measurable, initially assessed, and with a person accountable for it. Reassess costs and perceived benefits on a quarterly/half-year basis, and give up on weak business objectives while doubling down on strong ones. If all business objectives are a must, then decide what else you can change or sacrifice. 


OK, so you now know why it’s a must to have transparent business objectives and what happens if you are not proactive about them. We also covered some ways to mitigate the described issues and improve things.

The following article, and possibly the last in the series, will deal with the strategic initiatives and the importance of their transparency.


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