Goals and milestones are the terms that we often hear and use while discussing about projects. Goals refer to the targets that individuals, business owners and their managers intend to achieve in a specific period of time. Some goals can be quantified, like increasing yearly sales by 10% of the previous year’s figure or improving production method to reduce cost by 15% etc. However, some goals are qualitative and difficult to state in numerical terms; for example, improving customer service and providing after-sales services etc. are the goals to which we can’t easily and conveniently assign a numeric value.
Milestones are the targets that the company should achieve on its way to accomplish a particular goal. To state simply, we can say that the milestones are relatively small steps towards achieving a bigger objective or goal. Hence, the goals describe the destination where a business is going and milestones help in determining if the entity is moving in the right direction. We will now describe the two terms in more detail and explain the key differences between them.
Definitions and meanings
Goals
Goals simply refer to the results or targets that an organization aims to achieve during a specific period and are usually established when an organization develops its annual business plan. As starting point, business owners and/or their managers review the performance and results obtained in previous period(s) and set targets or goals accordingly for the forthcoming period(s). These targets are typically defined in terms of business achievements and growth including improved market share, enhanced productivity, reduced cost and increased business profitability. A company may establish its goals as a whole entity as well as it can break down the goals for individual departments. For example, an entity may set an overall goal of 20% increase in profit in the next year. If this profitability goal of a higher revenue than the previous year requires a 30% growth in sales revenue, the entity would assign this revenue goal to its sales department.
Once an entity has established its goals, its owners and/or managers develop appropriate strategies for their accomplishment. For example, to achieve a revenue goal, the strategies like better training of sales force, improving the product quality, adjusting product prices, introducing product bundles and discounts, focusing on repeat customers and attracting new ones by employing an effective marketing approach may be put forward.
Establishing goals is important for all entities as they specify the direction that guides both managerial and non-managerial employees towards the achievement of organization’s objectives. Goals are also important for determining the performance and efficiency of departments and individuals working therein. From time to time, the performance of various departments or individual employees (where appropriate) is compared against the goals assigned to them. Upon successful attainment of their goals, organizations award their employees with incentives like bonuses and promotions. It creates a feel of appreciation and recognition among employees and keeps them motivated for their work achievements in future.
An entity’s goals should be ambitious and challenging but achievable. The goals that employees feel are very easy to attain create a sluggish behavior among them and spoil their excitement. Too much difficult goals, on the other hand, would cause a disappointment and may develop demotivation.
Goals also need to be specific, objective and measurable. An example of such goal is:
“Our goal is to increase website visitors by 20% by the end of second quarter of current year”
Goals that are specific, objective and measurable allow owners and managers to choose or develop the most effective and cost-efficient set of strategies for their achievement. Also, the success of such goals is easy to track as the organization progresses towards their completion.
Finally, an organization needs to reevaluate its goals from time to time to see if they are still relevant to organization’s mission and objectives. A goal is only effective when it is relevant. Researches reveal that the companies that constantly revisit their goals exhibit better performance than those that just rely on their annual plan.
Milestones
A milestone essentially refers to an event or a point in time that is indicative of the critical stage of progressing towards a goal. Milestones are not ultimate achievements on their own; rather, they are measurable steps towards achieving something much bigger. With the accomplishment of milestones, companies ensure that they are on the right track.
Once a goal is set, milestones are determined and created for its accomplishment. It is important that a milestone is achieved within prespecified time because its completion allows companies to take decision to proceed for the next one. For example, if the goal is to increase sales by 20% by the end of fourth quarter, it may establish the milestone of increasing sales by 5% every quarter. It may then review its progress at the end of each quarter to determine whether or not it is successful in achieving its milestones.
The milestones are important also on account of economic changes that bring new threats and opportunities for businesses. Once a milestone is achieved, an entity needs to modify its strategies in the light of these new threats and opportunities so that the next milestones and the goal as a whole can be achieved effectively and efficiently.
Difference between goals and milestones
The five key points of difference between goals and milestones are listed below:
1. Meaning
Goals refer to the results an organization intends to achieve in a given time period. Milestones are the critical and measurable accomplishments that need to be made so as to progress towards a goal. In other words, goals are where the organization wishes to be and milestones indicate whether the organization is actually moving in that direction.
2. When are they established?
Goals are established when the annual business plan of an organization is developed. Milestones are created and achieved following the establishment of goals.
3. Objective
The aim of goals is to ensure that the managers and non-managerial employees remain focused towards organizational objectives. Milestones, on the other hand, help employees understand the progression and expansion of the business.
4. Uses
Goals help measure the performance of departments and employees by comparing the intended results (i.e., goals) against the actual outcomes achieved while the achievement of milestones ensure that the organization is moving in the correct direction for the accomplishment of goals.
5. Aligned with
Goals are aligned with the overall objectives and mission of the organization whereas milestones are aligned with a certain particular goal. The successful achievement of a goal essentially depends on the successful achievement of its milestones.
6. Size of achievement
A goal is something much bigger whereas a milestone is the part of a goal and is, therefore, a relatively smaller achievement.
Goals vs milestones – tabular comparison
A tabular comparison of goals and milestones is presented below:
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| Meaning | ||||
| The results an organization aims to achieve in a given time period | The relatively small and measurable achievements that are essential to accomplish the goals; sometimes regarded as sub-goals | |||
| When are they established? | ||||
| Development as part of annual business plans | Created after goals have been set | |||
| Objective | ||||
| Ensure that workers and employees are focused towards the mission and objective of their organization | Help employees and workers comprehend the progression and growth of their organization | |||
| Uses | ||||
| Measure employee performance | Reveal whether or not the progress is made in the right direction. | |||
| Aligned with | ||||
| Aligned with mission and objectives | aligned with goals | |||
Conclusion – goals vs milestones
The terms goals and milestones both refer to something that the organizations need to achieve for the accomplishment of their objectives. A goal is made of milestones which means the goals are set first and then bifurcated into small steps known as milestones. In this sense, a mile stone can be regarded as a sub-goal. The success of a goal can be tracked when a milestone is achieved.
Establishing milestones means defining path to move towards the final goal; hence, they should be developed appropriately to ensure that the goals can be accomplished. Goals and milestones both need to be SMART, i.e., specific, measurable, achievable, relevant and timely.
When an organization manages to achieve its goals and milestones within predefined timeframe, it indicates that it is prospering and attaining its overall objectives. Goals and milestones can be helpful in gauging employees’ performance. It is only possible to achieve goals and milestones when employees possess the relevant skill set, motivation and a strong desire to work towards their work accomplishment.
