Saturday, January 3, 2009

Business Lessons – a few thoughts on Goals

I hope you enjoyed. With the advent of a New Year thought I would talk about goals because so often people make new years resolutions. Yet for business goals are important. According to Wikipedia a New Year's resolution is a commitment that an individual makes to a project or the reforming of a habit, often a lifestyle change that is generally interpreted as advantageous while a goal or objective consists of a projected state of affairs which a person or a system plans or intends to achieve or bring about — a personal or organizational desired end-point in some sort of assumed development. 

The last post completed my series of expanding on the points contained in the post Business Lessons - A few thoughts on making quality decisions.

  • Reliability
  • Quality/Integrity
  • Durability
  • Predictability
  • Consistency
  • Price
  • Warranty
  • Customer Service
  • References/Reviews 

As a business it is important that you make strategic (not emotional) decisions, plan term and balance short term objectives. Let’s dig in a little deeper – for a goal to be effective it must be reasonable and as much as possible take into account the TCO (Total cost of operation/ownership). Let me use two examples to break this down. 

  • You want to buy a car for an employee or technician. This car costs $300/mo – that is all you need to consider right? No, Insurance (required level of gas, maintenance (oil, tire, wash, etc)
  • You want to hire a new employee – their salary is $20/hr – done right. What is I told you their real cost is somewhere between $40 and $50/hr plus insurance and other miscellanies expenses including but not limited to training, tools, unemployment, health insurance, G/L insurance and the list goes on) 

In both of these examples you must also take current revenues and expenses into account when making a decision. In any decision it is important to make sure that your expenses never out strip your revenues least you end up in a financial deficit and are required to pull funds from other sources to cover the expenses. Doing this could mean none payment of some other current liabilities or possibly the termination of existing employees (see outfall of financial meltdown). 

So how do you plan for effective goals, ironically the first thing needed is introspection. You must know yourself and your priorities, strengths, weaknesses, abilities, etc which requires frank, honest and often harsh introspection. Nest you must be realistic and consistent with your goals and values. Why must your goals be consistent with your values, because if they are not you will never follow through with them.   

Once you have set your goals then the hard work starts, you must look at all of your actions personally and professionally to determine if they are moving you closer to or further away from your objectives. If they are moving you further away they should be eliminated and if they are moving you closer they should be enhanced. 

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