When leaders plan the year, the list of company goals tends to grow: revenue, margin, new markets, hiring, culture, systems, sustainability. Each one is reasonable. Together, they are a recipe for a company that does nothing particularly well. So how many business goals should a company have?
The short answer
- One long-term aim (vision or "north star") that rarely changes.
- Three to five annual company goals that move you towards it.
- Two to four goals per team that support the company goals.
Beyond five company-level goals, focus drops and teams begin to pull in different directions.
Did you know? The OKR method (Objectives and Key Results) was developed by Andy Grove at Intel in the 1970s. John Doerr introduced it to Google in 1999, and it is now widely used by companies of every size. Most OKR practitioners recommend three to five objectives per level.
Why fewer company goals work better
- Clear trade-offs. When resources are tight, a short list tells everyone what wins.
- Easier communication. Every employee should be able to name the company goals from memory.
- Better alignment. Team goals can connect directly to a small set. See how to align personal and company goals.
Cover the balanced picture
Three to five goals does not mean only financial goals. A useful spread, inspired by the balanced scorecard, is:
- Financial: revenue, profit or cash.
- Customer: retention, satisfaction or market share.
- Internal process: efficiency, quality or speed.
- People and learning: skills, engagement or hiring.
One goal per area plus an optional strategic project is a common and effective pattern.
Small businesses and start-ups
In a small company, three goals is often plenty. A start-up might have one dominant goal, such as reaching a revenue milestone or proving product demand, supported by a couple of enablers. If you are still building your plan, see should goals come before or after a business plan.
Signs you have too many goals
- People cannot name them without looking.
- Teams argue about which goal their project serves.
- Every quarter, most goals are "amber".
If that sounds familiar, cut and consolidate. It also helps to review how goals flow down to teams and individuals: see team goals vs individual goals.
The bottom line
One long-term aim, three to five annual goals and a few supporting goals per team keeps a company focused. Cover financial, customer, process and people outcomes, and resist adding more. Our Business Planning and Goal Setting course covers OKRs, the balanced scorecard and KPI design, and our Strategy Road Maps course shows how to sequence them.