Set Goals for Increased Profitability and Productivity
Business owners who set goals and visit them often usually see:
- Higher productivity overall.
- Lower unnecessary costs
- Shorter timeframes between starts and finishes.
- Greater profitability.
A Potential Problem
Setting goals is one thing, knowing how to revisit them is another. Goal-setting and performance monitoring should be everyone’s responsibility. If goal-setting stays with the business owner, revisiting them often stays with the business owner too. By encouraging everyone to take ownership of goals success becomes more certain because everyone can revisit their own goals.
The Solution
Use two simple and effective ideas that have taken Olympic medal winners from “setting goals” to “standing on the winners’ podium.”
Separate Targets and Goals.
Business owners and departmental managers are responsible for setting targets – turnover, delivery times, new customer or client numbers, customer and client retention rates, gross profit, operating profit, pre-tax and post-tax profit, etc.
Goals focus on what everyone actually does to hit the targets. In Olympic terms, the target is to win the race. Athletes call it the End Goal; it is the reason they do what they do to the best of their ever-improving ability. Let’s repeat that:
- It is the reason they do what they do.
- They do it to the best of their ever-improving ability.
An Olympic team coach may tell the performers what the End Goal is, but the athletes must own that End Goal, so they have personal reasons to perform and to keep improving how they perform so they do succeed. Business targets, therefore, become the End Goal. Everyone must know, understand, and want to achieve the End Goal. You can help the team to understand and own the goals. hold meetings to:
- Announce the targets.
- Explain why they are important to the company and to everyone’s future.
- Introduce incentives, if appropriate.
This helps everyone to feel part of the End Goal. You can revisit the goal in future meetings, in the staff newsletter, by pinning updates on the notice board, etc. When the End Goal is introduced well, it is both easy and natural to revisit it.
Achieving the End Goal
Successful performance divides into two obvious areas:
- What people do, and
- How well they do it.
This brings us to Process Goals and Performance Goals. You and your team members hit targets and achieve End Goals by doing your jobs as well as possible, by reducing errors and removing obstacles, and by continually improving how you do things. Just like an Olympic athlete.
Process Goals
Everyone in your business has a job to do; that job breaks down into set activities. A sales executive, for example, makes sales calls. Process goals will be to do with how many calls they make in a day, what they do to prepare for each meeting, etc. An office manager produces reports for the C-Suite executives. Process goals will include how the data is collected and compiled for the report, and by when the report will be ready.
Process Goals can be performed below standard, to standard, and above standard. By revisiting Process Goals, people can improve their productivity levels. Team members can either see where they can make incremental improvements. Can meeting prep time be reduced, can travel times be improved, can more meetings be held on Skype, for example. When they make the improvements, they have something clear and obvious to review the next time they revisit the goal.
Performance Goals
To meet the Process Goals, the sales exec and the office manager must complete certain actions to agreed and approved quality levels. Can they improve something about each task they perform? They are in complete control of their actions, so they own their Performance Goals.
The Takeaway
Setting goals is only a part of succeeding in business. Revisiting those goals is essential, and should be done in ways that give each person a sense of ownership. As your business continues to grow and become more profitable, you are likely to need office and financial support, as well as improved tax advice. Please click here to contact us so we can discuss your needs in detail. In Part II we will discuss how each person can improve so they achieve their goals.
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Get off the Wheel Systems and Procedures for Greater Profits & Reduced Stress
By: Diane Gardner
This Book is for you IF…
You are an accountant, bookkeeper, or tax preparer with employees and one of the following describes you: