Who Sets Your Business Efficiency Goals? - dummies

Who Sets Your Business Efficiency Goals?

By Marina Martin

When you want to make changes in management of your business, you will want to define several measurable goals. When it comes to any effective business goal, who sets a goal has much to do with who is expected to achieve it.

Be sure drivers and supporters agree on your project’s objectives. When drivers buy into your objectives, you feel confident that achieving the objectives constitutes true project success. When supporters buy into your objectives, you have the greatest chance that people will work their hardest to achieve them.

If drivers don’t agree with your objectives, revise them until they do agree. After all, your drivers’ needs are the whole reason for your project! If supporters don’t buy into your objectives, work with them to identify their concerns and develop approaches they think can work.

Company-wide goals

Goals for the entire organization, such as overall increases in revenue, customer satisfaction rates, or market share, are usually set by upper management. However, representatives from particular divisions should have a way to weigh in on their practicality or relevance before these goals are formally adopted.

Organizations should be setting broad goals regardless of whether they are involved or even interested in efficiency improvements.

Departmental/divisional goals

Each division or team within a company generally sets goals for projects for which it is directly responsible. It may also need to set goals specific to its own role in company-wide goals. For example, if there’s a company-wide initiative to cut costs by 10 percent, then each department needs to adopt that 10 percent metric as its own goal, too.

On a joint project, goals can be set collectively or separate divisions can set their own goals if responsibilities are clearly divided. Usually this is not the case, however. You can’t, for example, tell accounting to save 10 percent and tell manufacturing to decrease defects by 10 percent independently of one another on the same project — manufacturing needs to be cost-conscious in its solutions, too.

Individual goals

Sometimes inefficiencies are identified on an individual basis. Maybe Marty’s output rate is significantly behind his peers’, or the accounting department is a single person. In these cases, it’s critical that the individual responsible for meeting the goal participates in defining that goal. Simply being assigned a quota or assignment by a manager (or worse, by management two chains above you) is a morale-killer.

There’s a difference between individual goals and divisional goals with individual components. An individual goal is one for a specific person, such as “Marissa will close 10 new deals by August 1.” A division goal affecting individuals may be “Every person on the sales team will close 10 new deals by August 1,” but it does not single out just one person.