The Goal
Jun 17, 2009
THE GOAL
Steven P. Schertz, CPA
June 8, 2009
Alex Rogo, Plant Manager for the Uniware Division of UniCo Corporation continually struggles putting out fires. Although he has an Assistant Manager, Plant Controller, IT Director, etc., he does not create a positive manufacturing environment. Day after day problems arise that threaten the viability of his plant and his career.
During a business trip to Chicago, he runs into an old college professor (Jonah), currently a successful business consultant. Both are waiting for flights and have a few minutes to chat. Jonah asks Alex about his life and Alex describes the problems he's encountering at his job. Jonah listens to Alex's story, asks some intriguing questions, and finally asks him an important question; "what is the goal of your manufacturing organization?" Alex responds, "to produce products as efficiently as we can." Jonah informs Alex that he is mistaken and asks again. Alex responds "power," then responds "market share." Jonah then leaves for his flight without providing an answer.
At work the next day, Alex asks his Plant Controller to join him for dinner. The two executives approach the goal question with many ideas but no conclusion until they see the proverbial light and they conclude that the goal of any organization is to make money!
"The Goal" written by Eiyahu M. Goldratt, goes on to describe how Jonah assists Alex and his plant staff in turning around the plant as well as teaching the business fundamentals of goal setting.
Goal setting is a very important tool for business owners. A recent article suggested that individuals who set clear and concise written goals will earn ten times more than those who don't utilize goals in their professional careers. Consider the choices you've made in your past. For those of us who did not set goals, would our paths have been different?
We use written goals in our personal life daily. Consider going to the supermarket. We create a list of groceries to purchase. The goal is to fill the shopping cart with all items on the list. When we fail to purchase an item, or if an item is unavailable, we feel unfulfilled. Conversely, if the list is satisfied, we feel elated.
Business goals are no different. Ron Willingham in his book "Integrity Selling for the 21st Century" discusses how "strong goal clarity" is a trait that high achievers possess. He defines goal clarity as "having clear, specific written goals of what you want to have happen in your future. They must be goals that you deeply desire, and most important, goals you firmly believe are possible for you to achieve, and that you feel you deserve to achieve." Let's analyze some of these terms.
- Clear, specific written goals - Writing them down seems easy, however where does one start. At a recent meeting, one of my partners made a presentation on goal setting. He shared his goals for 2009. All goals seemed clear, concise and in writing. I asked him to describe the logic or barometer that was used to create the goals. He stated that all goals were derived from annual revenue.
- Goals that you deeply desire - consider the emotional impact of desire. Alex Rogo almost ruined his marriage in attempting to succeed in turning his plant around, his ultimate goal. Fortunately, he succeeded and resurrected his marriage.
- Goals that you firmly believe are possible and deserve to achieve - During my career as a CFO, I always felt that higher compensation was possible and that I deserved to achieve higher earnings because of my contribution to the organization.
How do business owners use this very important tool? They probably don't realize that they use some form of goal setting periodically; an annual budget, a sales projection, or reducing operating expenses. My experience is that they misuse their entrepreneur talents which include goal setting. They call meetings of senior executives without clear written meeting goals, even if they have an agenda. This leads to lengthy meetings that do not create value for the individuals nor the organization. Perhaps the following suggestions are appropriate:
- Utilize your time to set clear, concise written goals for the benefit of the organization.
- Have senior management do the same.
- Set goal guidelines.
- Reinforce management's needs to have goal setting meetings, to share ideas that eventually become goals.
- Reward employees for their contribution to the organizations goals.
- periodically review goals and modify them as necessary.
As a Board of Education member, I participate in an annual goal setting meeting. The Board sets two types of goals; those for the Board as a whole and those for each of the Board's various committees. Without these goals, our school district would never have been awarded the NJ State Governors School of Excellence Award for two of our three elementary schools, nor had the voting citizens passed each and every budget during the past 20 years.
As a partner in B2B CFO® I set goals weekly, monthly, quarterly and annually. It provides me with the roadmap to succeed. I have found in a short period of time that goal setting has created success for my business. I maintain the same for my clients and work with them periodically in goal setting that are possible and likely to create success. We review these goals periodically, modify and create new goals for the benefit of the organization.
