Targets: pompous statements or working tools?

“If you don’t know which port you want to go to, no wind is good for you.”
Seneca

At some point in life we reach the point where we take responsibility and become masters of our own destiny. We even take on responsibilities beyond the sphere of our own person, whether we are managers or entrepreneurs in our professional life. It becomes our job to understand and determine what the people in our team or company should do. And at that point a number of important questions are raised:

What should I do? What should the company do?
What do I want to do? What do I want the team to do?
What should I do? What should we do together?

January is over, a month in which most of us have focused at some point on creating a Plan and setting Goals – particularly important steps in trying to be proactive about the year ahead; balancing the extent to which we will dictate what happens vs. the extent to which we will be dictated the course of action.
An excellent intention, but the challenge I encounter very often amongst our partners and clients is that inevitably at some point inertia takes over and, despite our most laudable efforts, our Agendas fill up with “things that need to be done” at the expense of “things we wanted to do to achieve our Goals”. And so the Goals become something declarative rather than something functional. Do you remember what Objectives you had last year? What about two years ago?

“Where are we wrong and how can we improve?” is the important question we seek to answer in what follows, and we do so by addressing two important perspectives:

• How we plan our Objectives
  How we bring them into our daily work

How do we plan our Objectives?

The principle we should follow is the top-bottom vision because what we are trying to do here is called Macro Planning.
I will start by stating some more generally formulated Strategic Directions. These are areas that I feel/think I should do something about. “Sales” may be a good strategic direction at a company level, or “Health” may be a very important one at a personal level. We don’t want to work with many strategic directions, but rather identify the most important ones.
Note that I have avoided attributing positive/negative nuances to these Strategic Directions. There’s a reason we haven’t formulated “Sales Growth” now, and that’s because these attributes then limit us in the process. The action of reducing the cost of production can have exactly the same impact on the company’s financial situation as an increase in the volume of sales, but the formulation “Increase Sales” excludes the former from the outset. It’s not desirable to do that in this one, rather what we want is to answer the questions “What are the big goals I have this year?“. What are the big directions I want to step in?” and to give broad answers.

The second step after identifying the Strategic Directions is the Objective Formulation stage, and this is very important, because here we need to get the balance between vague enough that we don’t narrow our course of action, but precise enough that we can clearly know at a certain point whether we have achieved our objective or not.
Personally, I’m a big fan of the SMART methodology of formulating Goals, which gives us the skeleton on which a Goal should be built: to be Specific, Measurable, Actionable, Relevant and Time-bound.
So, assuming I want to increase my company’s profit, how can I formulate SMART Objectives?
“Increase Sales” or “Decrease Cost of Production” are vague formulations, while “Motivate Georgel in Store Number 3 to sell 10 more products per month” sounds more like an Action Point, not a Goal.

What might a midpoint sound like?

“Creșterea volumului vânzărilor cu un procent de 30% în primele 6 luni ale anului raportat la aceeași perioadă a anului trecut” ar putea fi o variantă. Îmi spune clar ce-mi doresc, este încadrat în timp, este relevant pentru direcția strategică “Profitabilitatea Firmei”.
Formularea Obiectivelor poate fi o provocare pentru manageri și antreprenori, însă secretul aici constă în exercițiu! Țineți structura SMART aproape, formulați Obiectivul și mai apoi întrebați-vă: “Este specific?”, “Îl pot măsura?”, “Este realist?”, De ce vreau acest obiectiv? / E relevant?” sau “L-am încadrat în timp?” Urmărind procesul veți ajunge curând să fiți mulțumiți de cum sunt formulate Obiectivele.

“Increasing sales volume by 30% in the first 6 months of the year compared to the same period last year” could be one option. It tells me clearly what I want, it is time-bound, it is relevant to the strategic direction “Profitability of the Firm”.
Formulating Objectives can be a challenge for managers and entrepreneurs, but the secret here lies in the exercise! Keep the SMART structure close, formulate the Objective and then ask yourself: “Is it specific?”, “Can I measure it?”, “Is it realistic?”, Why do I want this objective? / Is it relevant?” or “Have I framed it in time?” By following the process you will soon come to be satisfied with how the Objectives are formulated.

You might think that Macro Planning stops here, but it doesn’t, because the third step we need to take is to define the Performance Indicators (KPIs). Why are they so important? Because we want to achieve our Goal, but we don’t want to achieve it at any cost and in any way.
Would we be satisfied if achieving the Goal of increasing sales volume came with decreasing quality in the sales process, and this would lead to greater customer dissatisfaction and therefore compromised chances of recurring sales or shortened monetisable lifetime? If this were the case, paradoxically the Objective would be met, but the Goal would be compromised and the company less profitable.
So back to Performance Indicators. In general these can be quantitative, qualitative or financial (of course financial can also be linked to the first two categories, but it is often useful to deal with them separately, as the figures easily summarise desirable or undesirable situations).
Taking the example of the earlier Objective: to increase sales volume by 30% in the first 6 months of the year compared to the same period last year, some performance indicators might look like this:

QUANTITATIVES:

• The actual sales volume of each month compared to the same period of the previous year -> helps us to compare January of the current year with January of the previous year, February with February, and so on.

QUALITY:

• The “high” satisfaction rating of new customers at least 80% of the time -> we evaluate the quality of the sales we make. We should develop ways to get feedback from customers, if they don’t already exist.

FINANCIAL:

• Maintain a Customer Cost of Ownership below a 10% increase over the current one. We want to attract more customers, but not invest more than 10% over the current moment to get them.

By formulating Performance Indicators I know pragmatically what the achievement of the Objective should look like – what limitations and costs I accept. The most important aspect in formulating these indicators is that they are MEASURABLE. If the measurement tool doesn’t currently exist but I can develop it, it’s not a problem, but if I ask myself “How would I measure this?” and the answer is “I don’t know!” then the KPI needs to be reformulated / rethought.

Step 4 (the last step in Macro-Planning) is the Identification of Action Points and Agents.
Going through the process up to this point is useful because it makes it easier to identify the key action points, the answers to the question “What should we do concretely to achieve the Objective?” – because we already know specifically what we want to do, but also what the limitations are.
Listing the actions in a list however raises two important questions: “What is the order/sequence in which these actions should take place?” – it is clear that it would be ineffective to train sales staff before reviewing and updating bids. Or to start a promotional campaign, but not have agents ready to respond to the demand that is created. The logical sequence of actions is therefore a very important factor that we should be aware of at this planning stage. We may not be able to have all the detail down to the smallest step, but we should certainly at least know where to start.

The other important question is “Who is responsible for carrying out these actions?”, and this question helps us to Identify the right Agent for implementing the actions and delegating them to him/her. Without exception the achievement of the Business Objectives requires teamwork involving several Agents, in different roles, but with the same Purpose! The Sales Manager, Store Managers, Sales Agents, Technical Support Staff etc will all have action points to achieve. Good planning at least broadly outlines these actions.

To summarise the process so far, the 4 steps help us answer some very important questions about Macro Planning:

-what is the direction we want to go in?
-what do the specific points we want to reach look like?
-what are the conditions under which we want to reach these points?
-what specifically needs to be done?
-who should do things?

Following the steps of this rigorous process requires an investment of time and we would argue that:

• It can be a very high return investment if we use it later in practice
• Develops structured thinking about planning
• Becomes very natural and logical as we use it

Any spreadsheet tool can bring this kind of planning to life. In spreadsheets it might look like this:

This image concludes the Macro Planning stage.

How do we transfer the Objectives into everyday work?

We now enter the realm of Micro Execution, where the results really show. The first step at this stage is awareness of what we have already created: a fairly clear map of where we want to end up. So, I ask you: the moment you set off on a longer journey, sit in your car and set the map (Google Maps, Waze etc.) to the point you want to reach – how many times along the way do you check that map?
I think at least every time there is a change of direction. I don’t suppose it has ever happened to you to leave Bucharest towards Suceava and check the map the first time after arriving in Tulcea, has it?
That’s exactly how it should be with planning. We have worked hard to build it and now it exists, so let’s use it! I personally take a look at my map once a week, because I include it in what I call Weekly Planning.

The process goes as follows:

• I start with the question “What should I do this week to get closer to achieving my Goals?”. So I consult the planning document and extract from it the priority action points related to the Goals I have set. These will be the things I am PROACTIVELY moving towards during this week! Because they are important, otherwise they would not have been analysed and planned.
• Next to the proactive action points I bring in the reactive ones. These are the things that have arisen out of inertia or the chaos of doing business. Proactive + Reactive = what I have to do this week. (TO DO list)
• Prioritize using the Eisenhower Matrix. I understand what’s important and urgent, what’s important but not urgent, what’s urgent but not important, and what’s non-urgent and non-important. The first quadrant will be executed as soon as possible. For the second quadrant I will allocate time slots in the current week. The third quadrant is delegated following the logic “If it’s urgent but not important it means it’s not important to me. So to whom is it important?” The fourth quadrant is eliminated (if I deal with non-urgent and unimportant things I just waste time).
• I aim to complete my TO DO list by Wednesday at the latest, with a big load on Monday – ideally about 50% of things get completed on Monday. Why. For two reasons: a) this approach allows me, even if I don’t tick everything off by Wednesday, to maximise my chances of finishing the week successfully and not rolling over tasks into the next week and b) I also keep availability for unplanned things that will end up on my ‘plate’. It’s not because I don’t work on Thursdays and Fridays although I can see why that would be an appealing idea).
• Execute, execute, execute. At this stage I realise that thinking is only of marginal benefit to me. So it’s simple: if things have to be done then let’s do them exactly as we’ve organised them.
• At the end of the week I reassess progress. What happened? What did I miss? What could I have done better? What actions have been completed and how can I update the planning? Am I closer to achieving the Objectives? Never let a week go by without understanding whether or not you have made progress. It’s true that there will be some tough weeks where we achieve very little, but the process of awareness is very valuable. It is the one that helps you stay anchored in the Goals.

And then I start again. Week by week.

If I do these things am I more likely to achieve my Goals or will they remain just declarations?
I’m waiting to hear from you…