How do we categorize objectives?

In the articles ‘What is Work and how do we define it?’, ‘When to plan and do we set objectives?’, and ‘What are the different types of objectives for businesses?’ planning and setting objectives with different types and initiators are discussed. In this article, I will explain my approach to objective categorization.
For categorizing objectives, I first consider company activity types. At the highest level, companies have two main types of activities: project-related and operational. Let’s introduce these two areas.

Project:

The best place to get the definition of ‘project’ is PMI (Project Management Institute). It defines a project as temporary, in that, it has a defined beginning, and, an end in time; and therefore, it defines the scope and the required resources. However, a project is unique, in that, it is not a routine operation, but, a specific set of operations designed to accomplish a goal.

With this in mind, we can interpret a lot of minor objectives like ‘Upgrading Server A’, which would be a separate project. Companies should determine their desired measures like duration, people involved, and required resources. For example, a company may define its work as a project if an objective includes at least 5 people and if the duration is around 8 weeks.

Operation:

On the contrary, ‘operation’ is the continuous execution of a company and it has a repetitive nature. Repetitive nature does not necessarily mean that there will be no exceptional or sporadic tasks involved. For example, the aim of the operational sales objective: is to sell products to customers based on their demand, and this objective is repeated for each request. But each request might have different issues during its execution.

Companies plan for their operation within different time blocks using their estimated operation volume. An example is the sales forecast of a company that should be transformed into a companywide master operations plan.

Project & non-project oriented companies

A company whose products or services are offered through projects is commonly called a project-oriented company. For instance, contractor companies are mostly project-oriented companies because their service is delivering projects. But this does not mean that a project-oriented company has no operational works, and also, it cannot be assumed that non-project-oriented companies are not handling any project.

 A project-oriented company has operational jobs like accounting or human resources, and, a non-project-oriented company like a manufacturer defines projects on, for example, a new product launch or a new software implementation. Thus, all companies should have both project and operations management, and, not let’s not forget that the very beginning step of management starts with planning in both of those fields.

Categorizing Objectives

Considering the company activity types, we categorize objectives by using three main types of categories:

1. Project Categories

In a project-oriented company, each project can be a separate category holding objectives. For example, ‘Prime Tower Construction’ can be the category that contains plans and objectives of the project.

In a non-project-oriented company, a single project category like ‘Projects’ can be ample for smaller organizations but larger ones with projects in different fields, specifying categories for each field like ‘HR Projects’ or ‘Sales Projects’ can be more useful.

2. Operational Categories

Different fields of operations like purchasing, sales, production, and HR can be the titles for categories. These fields should not be confused with organizational units because objectives, in most cases, include different organizational units. For example, the ‘Procurement’ category can include business processes like sourcing and purchasing that engages other departments like planning, warehouse, and financial.

3. Company Category

This is the parent of all categories and objectives. Usually, high-level objectives reside in this area because they may be the higher levels of some objectives in both project and operational categories. For example, the objective ‘ 5% increase in profitability ’ may be the parent of the objectives ‘Implementing CRM’ from the ‘Projects’ category and ‘Selling to a new market segment’ in the ‘Sales Operations’ category.

A conceptual example of categorization of objectives is illustrated below:

Figure 2 – Objective category example

As it’s shown in figure 2, categories may include separate objective hierarchies. Projects categories have Objective 1.1 and Sales categories include objective 1.2 that are both sub-objectives of Objective 1. All of the categories are under a companywide category and some objectives may also relate just to this category (Objective 1), since, it serves all or several other categories. Some objectives may also be included in more than a single category. Objective 1.2.2 and objective 2.1.1 are related to Sales and Financial categories.


Leave a Comment

Your email address will not be published. Required fields are marked *