- October 17, 2016
- Posted by: David Marshall
- Category: Manufacturing, Measurement
Previously, I discussed the importance of companies and their employees setting definite, measurable goals and objectives as a way to measure their productivity, progress, and improved skills. I said that basic goals like “improve sales” are too generic to actually be useful.
A better goal would be to “Improve current sales revenue by 10 percent in 12 months.”
However, every goals needs objectives, and some of these objectives might include:
- Produce one special white paper per month, which we email to our customer and prospect mailing list.
- Increase the number of outgoing sales calls by 10% each day.
- Increase prices of our top 20% selling items by 10%.
- Each salesperson will schedule one more sales meeting or pitch per week.
You Need to Understand the Processes First
However, setting goals and objectives is not very useful if you don’t understand how your associates actually do their job. This means you have to understand the processes, and how the work is accomplished before you can start suggesting areas of improvement.
For example, what if our earlier sales department’s sales process realistically only allowed each salesperson to manage three enterprise-level prospects per month? Can we really expect a 10% increase in daily sales calls, or one more sales pitch per week? What if our top 20% selling products are already priced at the peak of what the market will bear? We may lose customers if we increase our prices by 10% when the rest of the industry is trying to keep theirs lower.
In this case, a 10% increase in sales may be possible, but not with our stated objectives. A new manager who doesn’t understand the sales process will have a difficult time getting the staff to achieve them. Instead, the manager should learn the processes and procedures that the sales department is already working with before suggesting improvements.
What’s the Value of Each Goal?
Another question to ask is whether those goals and objectives will bring value to the company.
Here’s a ridiculous example. Let’s say you establish a goal of becoming ISO 9000 certified. But being ISO 9000 certified doesn’t mean the product or service you provide is useful, good, or actually wanted by your customer base. You can make concrete life jackets, and still be ISO certified.
Again, this is why understanding your company’s processes is so important. It means understanding the products, who buys them, and whether anyone actually needs a concrete life jacket. Once you understand that, you may decide that an ISO 9000 certification is unnecessary on a product you’re going to discontinue, or license exclusively to the mafia.
This is why managers shouldn’t necessarily be the ones to dictate goals and objectives to their staff. Rather, the associates should create their goals and objectives, as they relate to their job responsibilities, and work with their managers to ensure they’re on the right track.
Everyone within your organization should have measurable goals and objectives. As a general rule, they should be quantifiably measured and linked to the P&L. And those goals and objectives should be based on the individual’s job description, otherwise they’ll probably have difficulty in being qualified to accomplish it.
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business and set their own goals and objectives. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.