Diagram 4.2: Plans provide direction to implementation, which results in achievements
It is important to celebrate your achievements. Building a business is not an easy task, so make sure that you give yourself and your team the credit that each step, or group of steps, in that journey deserves. If you take some time to relax and enjoy how far you’ve travelled, then you will find that it’ll do wonders for your people’s motivation. Yes, there may be a long way to go and a lot to do, but if all your team faces every day is more toil, more hills to climb without respite, then they’ll become demotivated fast, and you’ll find yourself toiling on your own.
Having produced your plan for your business, your quarterly activity, your daily work flow, whatever, you’ve now communicated the right parts of it to the people who need to know. If all has gone to plan, then you are now achieving things. What you’ve achieved can be anything: recruiting a new member of the team, entering a new market, getting an order out to a customer, etc., but what is important is that you are being rewarded for all the effort that you and your team are putting into making your business function.
As we saw in Chapter 3, in order to get to a destination, we need to have a plan. Plans are made of lots of parts and everything has to come together, within a given set of boundaries, in order that the plan be fulfilled. One of the (many) things that you will have to think about is what defines success: getting something done, fulfilling X orders, reducing the costs of production, etc. In order to do this, you’ll have to stick some numbers on these achievements. Why? Well, the simple answer is that a number is something upon which everyone can agree. Numbers are non—negotiable: 7 is 7, 42 is 42, etc., there is no opinion. As we’ll be covering TINA’s Numbering sector in detail in the next chapter, we’ll focus here on who’s in charge of keeping an eye on your achievements, and their associated numbers.
Are we there, yet?
Who should be responsible for overseeing which achievements within your business and for taking action when things are not being achieved? Hopefully, given what you’ve just read about roles within the business, the answer in your head is something like ‘the person with responsibility for that achievement’. Achievements can be seen as individual steps on the road to business success, but the ‘baby steps’ that your business takes in its early years are the ones most fraught with danger. Get them right and you’ll survive long enough to have a chance at great success. Get them wrong and you’ll fall head first into the failure abyss.
Getting the steps right, making sure that you achieve all that is necessary for your business to survive, is paramount. Communicate your plan to your team and then discuss what each team, each department, each person, needs to achieve and in what order. Nothing exists in isolation and so you should think of your business, the functions within it and the people who work for you, as cogs in a machine. Each one interacts directly or otherwise with every other. When one cog turns faster, the whole machine goes faster. When one stops, then the whole thing can grind to a halt.
One of your many jobs as a manager is to keep the cogs within your business machine turning. Imagine this as being a responsibility to ‘lubricate’ the system, reducing unnecessary friction to a minimum. Why? Well, friction causes heat and noise, and you don’t need any unnecessary heat and noise in your business, do you? So, given that you can’t be everywhere at once, how do you ensure that the necessary ‘lubrication’ is being applied where it is needed? Answer: delegation of responsibilities and authorities.
Ensure that the responsibility for monitoring and measuring your achievements is delegated to the people most directly involved in those achievements. They are their achievements, resulting from their efforts, after all. Don’t forget to assign them the appropriate authorities as well, so that when stuff goes wrong, and it will, they can sort it out. This will both save you a job and stop them becoming dependent upon you for solutions to their problems.
Looking back to your planning, one of the things that you have to define is a target for each achievement. Yes, I know that you might have a gazillion things that your business has to achieve, but setting targets for them is crucial or you’ll never be able to keep track of how your business is doing or where it’s going. This isn’t as difficult as sounds as you don’t have to set targets for everything at once. Choose the most important things that you want to achieve and set targets for them. Then, when there’s time, set other targets. Regardless, you must have targets of some kind otherwise you’ll be driving with your eyes closed. If the only reason that you look up is because your journey has suddenly stopped, then I’m afraid that it might well be too late!
When you first determine the various targets for your business, don’t worry about making them absolutely accurate. How can you? You’re setting—off on your business journey and, whilst you will have thought about many variables, you absolutely will not have thought about them all. If you don’t know how long you’ve got to get to your destination, how do you know how much food to pack? Use what information you do have to estimate. Put down a marker and then refine its position over time as you gather more information and make increasingly solid informed decisions.
Think through what targets you would like to hit and then don’t forget to discuss them with your people, specifically those people to whom you are delegating responsibility and authority for hitting those targets. If you impose targets on people without listening to them, then you are setting yourself up to fail. There is a handy acronym for applying to your targets that’ll help you here and that is SMART.
If you look on the internet, you’ll find that there are a number of words for which the letters in SMART can stand, but I like to use these: Specific, Measurable, Agreed, Realistic and Time—bound. We’ll have a look at why these criteria are helpful when applied to targets in Table 4.5.
To see how the SMART system works, we’ll use one seemingly straightforward target that you could envisage seeing in just about any business: Increase sales by 10%. Let’s look at each of the SMART criteria in turn and see how this target fairs. Bear in mind that, for the purposes of this example, I’m going to be deliberately harsh. You don’t have to be as harsh in your application of SMART to target setting, but bear in mind that the reason that you’re reading this course is that you’d rather your business didn’t fail. All those businesses that have failed probably had a target concerning sales and they still failed! How are you going to increase your chances of being different? Spend the necessary time Thinking.
| TARGET CRITERION | CONSIDERATIONS |
| Specific | If you aren’t specific, then it may be possible to hit the target in many ways that aren’t what you want. For example, you ask someone to paint a wall. The wall is duly painted…green. You wanted blue, but weren’t specific. It was your management of the situation that was lacking, so you can’t blame the painter. |
| Measurable | You cannot demonstrate control of something that you cannot measure. If you want five of something to be delivered, then specify that you want ‘five’. ‘Tidy this office’ is a poor target unless you can provide a measurable value of ‘tidy’ to which all can agree (see below). |
| Agreed | In this millennium, the best managers use ‘communicate and control’ rather than ‘command and control’. The latter is great on the battlefield, but not in your shop. If you impose targets on others, then you will fail. Agree those targets and those who have agreed are more likely to hit them. |
| Realistic | Don’t be daft and set targets that are unrealistic. Tough, demanding, difficult, hard targets are fine, as long as they are agreed, but setting unrealistic targets is just asking for failure. |
| Time—bound | If you don’t set a time by which something has to be done, then don’t complain if it isn’t done as fast as you expected. People have many tasks to perform and will get around to whatever it is that you’ve asked them to do in their own good time. If you want it by 1415 hrs, then be specific and obtain agreement (see above). |
Table 4.5: Applying SMART criteria to targets
Which parts of SMART you apply to which targets, if any, is entirely a matter for you. When we’ve finished this exercise, we’ll see if the use of the SMART system has allowed us to re—write the target in a way that increases its use to your business.
Increase sales by 10%
Is the target Specific? — Well, the word ‘increase’ is specific and so is the %’, but the target doesn’t specify the comparator; in other words, against what are we to measure the ‘increase’? Do we mean last month’s sales or last years? You could argue that 10% is 10% and that it therefore doesn’t matter, but it does as the context for the increase has consequences for the resources that you’ll have to deploy to hit the target (see Realistic, below).
What about the term ‘sales’? Which ‘sales’ are to be increased? Can they be any sales? Well, unless the business has one standard product, the cost of which never varies, the type of sales might well be very important. How much does it cost to get the sale, to produce the goods, and to deliver the service? Does one unit of the product cost the same as 20 units of the product to sell, to produce and to deliver?
Is the target Measureable? — This target looks good regarding measurement. The ‘increase’ and the %’ are both measurable and so all we need to ensure is that the systems are in place to collect those measurement numbers at the appropriate times (see Chapter 5: Setting—up Your Dashboard).
Can the target be Agreed? — Meaningful agreement is dependent upon understanding. If you agree to do something it is, hopefully, because you have thought about (or at least had a quick think about!) the parameters around what you are being asked to do and decided that it is within your abilities to do it. Therefore, the more information that you have regarding the parameters, the more likely it will be that you are agreeing to something that you genuinely can do rather than setting yourself up to fail. The sales target here is a little short on information, so we’ll say that in its current formulation, it is not something to which it would be wise to agree. Once we’ve finished applying the SMART process and re—written the target, we’ll re—visit this criterion and see if it’s made this target more agreeable.
Is the target Realistic? — This might seem at first glance to be an easy test to meet, but, be warned, it is a minefield. A lot of the problem here stems from the context in which the business finds itself at the point at which the target is set, and this is highly specific. Assume that your business is doing well, in a growing market and has plenty of capacity. Increasing sales by 10% may well be a realistic target. However, if the business is struggling, the market is shrinking and, as a result, personnel have been laid—off, using this target as a lever to improve your business is likely to do the opposite. Context is everything.
Does the target have a Time by which it must be achieved? — The sales target here has no associated time for completion. Why is the timing of a target important? Well, if I asked you to increase the volume of sales by 10% by next Tuesday afternoon, you might look at me as if I was crackers. However, if I wanted a 10% increase by this time next year, you might think that easily attainable. As with all parts of your business, your targets will be interconnected. Recruitment occurs before training, selling occurs before payment. At least some, if not all, of your targets will be sequential, in that one must have been achieved before the next one can be. Without associated times, achievement of all your targets may not carry your business forward if they have not been achieved in the right order.
Only a poor worker blames the tools. Only a poor manager blames the ‘management tools’
Hopefully, by this point, you’ve noticed that the individual criteria within the SMART acronym are not ‘individual’ they are intimately connected to each other, just like the different parts of your business. Change the timeframe and a target moves from wildly optimistic to realistic. Specify the parameters of the target and agreement becomes easier as the expectations become bounded.
So, let’s have a look to see how we can re—write the target in a way that would be more helpful to all concerned. The target with which we started was Increase sales by 10% and I suggested at first that we could be more specific with the ‘sales’ part, so let’s try:
Increase like—for—like monthly sales by 10%.
Now, we have greater clarity regarding the sales; the same sales channels compared on a monthly basis. For example, for a cobbler we could say, ‘Increase monthly sales of men’s boots by 10%’. For an accountant, we could say, ‘Increase monthly sales of payroll services by 10%’, and so on. Checking back, we can see that we were happy with the target as regards it being Measurable, so, skipping Agreed for now, let’s have a look to see if we can make it easier to determine whether it is Realistic.
Whether a target is Realistic or not has a lot to do with the resources that are required to hit it. It costs time and money to tell your potential customers of the availability of your goods and services. It costs time and money to take orders from your customers. It takes resources to build, create, produce, devise, etc., your goods and services, and then you have to get them to your customer, which takes further resources. So, from where are these extra sales that you want to come? Well, it takes less resources to use existing sales channels in your existing markets than it does to establish new sales channels in new markets. Therefore, for this example, we’ll assume that there is untapped potential in those existing markets and we’ll add that criterion into the target, giving us:
Increase like—for—like monthly sales in our existing markets by 10%.
So far, so good. Now we’ll include a target time. In this example, we’ll set the target date to a month before your next (imaginary) Annual General Meeting, when you’ll be wanting to tell all your interested parties about your successes.
Increase like—for—like monthly sales in our existing markets by 10% by 1st July.
By applying the SMART acronym and giving the target a little thought, we’ve gone from ‘Increase sales by 10%’ to ‘Increase like—for—like monthly sales in our existing markets by 10% by 1st July’. The target is now much more Specific, includes criteria that are obviously Measureable, is deemed to be Realistic as it exploits existing markets with (we’ve determined) unfulfilled needs, and is Time—bound, so everybody knows by which date it is to be hit. With these simple adjustments, the target has become something to which it would be much easier to agree, or obtain agreement, with a reasonable expectation of successful achievement.
Targets formatted in a SMART way provide tools that are of much greater use for moving your business forward than ones that are produced off—the—cuff with little thought behind them. However, a word of warning: don’t spend so much time thinking about your targets that you end up with analysis paralysis and forget to get anything done. Whilst thinking is very important, so is the rest of TINA.
As a final point, be aware that some people don’t like (won’t like) applying the SMART acronym to targets. Fair enough. We can agree that targets are necessary, but disagree about whether they should be SMART. If we were all the same, then the world would be a very dull place. So, if you would like to use a different system, then that is fine.
Just remember that SMART is a management tool and like all management tools, there is a right way (a right when, a right where, etc.) to use it and a wrong way to use it. It’s like people who say that they don’t like meetings. Could it be that the manager deploying the ‘meeting tool’ is using it incorrectly, like a chimp bashing a hollow log with a stick trying, but failing, to make beautiful music! SMART targets are like that hammer in your toolbox. It’s the right tool when used with a nail; it’s the wrong tool when used with a screw. Deploy your management tools wisely.
A ‘what’ without a ‘why’ is inviting failure.
However, a note of caution regarding targets: remember why they are there. Targets are intended to drive your business forward and increase its chances of survival and success. Bad targets result in people focussing on the ‘what’ (hitting the target) rather than the ‘why’ (happy customers advertise your business for you). So, when you create your targets, think about how you want your team to achieve them.
In addition, don’t just target that which is easily measureable, like orders taken, goods shipped, complaints logged, etc. Make sure that your targets measure the quality of achievements as well as their quantity. I know that measuring a quantity is easier than measuring a quality, but who said that management was easy? If you don’t think through what you want to achieve, then you can push your people to meet arbitrary targets that don’t advance your business in the way that you expected.