These 12 Common Business Terms Seem Redundant, But They Have Practical Differences
If you’re involved in any goal-setting effort, you’re bound to run into a host of terms that all seem to mean the same thing. Here’s how to keep them straight.
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When working with leadership teams and executives on strategy planning, we often throw around a lot of terms. Some of these terms can seem to mean the same thing, and they often end up meaning different things to different people. Here are some definitions I've coalesced and use in my work to keep things clear.
I use this to describe what an individual or organization is meant to do in their heart of hearts. It's something they can spend their entire lives pursuing and has infinite room for success. Some examples are: to rid the world of hunger or improve our lives through technological innovation.
I like to think of the purpose as the why, and the mission as the what. A mission defines what we want to achieve at the highest level. Some examples are: give every child three square meals a day or make tomorrow's technology available today.
A vision describes a future state in rich detail. We use a vision to create a compelling view for what our success will look like once we've achieved our goals. Generally, this is written in prose over several paragraphs and provides key details and taps into core emotions.
Coined by Jim Collins in his book Built To Last, BHAG stands for Big Hairy Audacious Goal. I look 10 years in the future, but some people go as far as 30. There are different types of BHAGs, but they are always compelling and time-bound. Good BHAGs will move you into a new league of play and should invoke the slightest bit of fear.
Priority defines the one thing you are dedicating the majority of your time to. Your priority is the thing you do prior to working on other tasks. It is often helpful to have a list of things that you are deprioritizing in return. Priorities are generally set for a year or quarter and can involve multiple tasks or projects.
Your focus is similar to a priority, but slightly more general. I think of a focus as a topic of interest or concern for a group or individual. A focus might be customer service, whereas a priority would be reducing the wait time for priority customers.
I generally use initiative to describe a group of projects, often across departments, that achieves one or more key results in an organization. Some examples might include: improve safety to reduce shop floor accidents. This one initiative includes human resources, operations, facilities, and logistics.
Objective is defined as an area of focus that is clearly aligned with the long term strategy, reasonably narrow in scope, and compelling to the team. For example, a quarterly objective might be improve project management skills for all delivery staff.
A goal is similar to an objective but smaller and more specific; it also has a clear deadline and timeline. If the objective is improve project management skills for all of our delivery staff, then a goal might be have all delivery staff score over 90 percent on the PMI project management skills assessment.
Used in conjunction with a key performance metric (KPI), a target is a specific number or measurement you're looking to achieve. If your KPI is number of orders per day, your target might be over 200 orders a day for five consecutive days.
If you're using OKRs, then these are the specific, measurable, actionable things you are doing to move forward on your objective. Each key result is an independent task that adds value, not a series of steps in a project plan.
If your objective is improve project management skills for all delivery staff then your a key results might be 1) run three project planning workshops in March, 2) have two people go to the PMI certification class, and 3) hold a project retrospective on our last three projects.
An action item is a commitment to do something. It has a 'who', a 'what', and a 'by when'. With any action item, I want to know what I will have in my hands or see with my eyes that will tell me it's complete. When running my weekly team meetings, I'm focusing on what actions people are committing to for the next meeting so that I can hold people accountable to what they've signed up to deliver.
I'm sure there are other terms that get thrown around in these types of sessions, but the ones above are the core terms that are good to know. While I like mine, they are not gospel. What's most important is that everyone on your team agree to each word's meaning so everyone has the right expectations.