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Pick a goal and you will find a way

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Operations Excellence by Sepp Gmeiner
Sepp Gmeiner is a partner with Lignum Consulting. For feedback, questions and/or suggestions please email s.gmeiner@lignum-consulting.com
Setting goals is one of the most important activities in your business. The reality however is, that a lot of companies, especially smaller companies, don’t do it. And just doing it in your mind, is just like a New Year’s resolution being called out, right after the ball drops. And like the vast majority of those resolutions, they do not last and have no impact. Just for the fun of it, I Googled; “why New Year’s resolutions fail?” From the thousands of search results, I picked the answers below:
- you are lacking motivation or commitment
- you are a master of procrastination
- you are picking too big of a challenge or changing the goalpost constantly
- resolution adoption
- you don’t believe in yourself

What is interesting is that these apply for goal setting at a company as well as for your personal life.

Picking your goals
Your planning horizon is important. If you navigate well for the short-term but have no long-term objective, you might end up in a place and wonder how and why you got there. In reverse, if you are focused only on the long-range plan, you might set up perfectly for the future, but your business failed because you did not master the challenges right in front of you.

Long-term
Where do you want the business in five to 10 years? Where do you want to be in five to 10 years? These goals include expansion and growth plans, exit plans or generation change.

Medium-term
What are you planning for the next two to five years? What new markets do you want to enter? What new product categories do you what to develop? Do you what to move into new facilities? Do you need major technology or software upgrades?

Short-term
Are there important positions to be filled? Do you need to adjust the cost structure? Do you need to increase/decrease capacity?

Look at your entire business
It is important that you look at all departments of your company. In my work, I focus on operational improvements, however, in order to achieve overall excellency all departments and all aspects, like sales and marketing, manufacturing and distribution, finance and administration need to be reviewed and all improvements need to be aligned to the overall objectives, and with each other.
You need to deep-dive in all departments, but for this article, we will concentrate on operations.
The list below allows us to question your operations performance from all angles. It helps determine your current situation and allows new objectives to 
be established.

Strategy
Corporate Objectives
Product Range and 
Services
Market Positioning

Product
Product Variation Management
Product Data Model
Rule-based Construction
Construction Standards
Platform strategy
Design

Organization
Lean Manufacturing
Production System/Model
Processes
Organizational Structure
Supply Chain

Technology
Process Engineering
Automation Technology
Preventive Maintenance
Tooling
Infrastructure
Facility Management

Data Integration
Product Planning & Control
ERP|MES Integration
Synchronized Production
Information Flow
Machine/System Integration
Interfaces
CAD|ERP Configurator
Customer Order
Product & Demand Planning

Logistics
On-time delivery (Quantity – Time – Quality)
Intelligent Material Supply
Suitable Technology Concepts
Separating Value-adding from Logistics
Internal Logistics
Rework Organization

Human resources
Leadership
Methods & Problem-Solving Skills
Qualification | Skills Development
Flexibility
Motivation

A similarly detailed list should be made for sales and marketing as well as for finance and administration.
By going through this exercise, you are most likely creating a long list of potential improvement projects, which may take you years to complete.
Stay realistic and reduce the list according to importance, potential impact, and available resources. If the list is too long, the effect could be that nothing gets done. It is important to right-size the list to be a challenge, but not overbearing.
The next step is the bring all these ideas into a workable format. The system of a one-page plan works well for this.
You start from the top. The president’s list contains the high-level items. For example, “increase sales by X-%” and “increase profit by Y-%”. The sales manager picks up the sales goal and divides it into multiple projects, for example adding a certain number of new dealers, developing new markets (i.e. export), adding new products (like adding closets to the kitchen cabinets) and so on.
The operations manager does not have sales on his/her list. But the increased volume or the new products are required to be produced. So, the operations manager’s one-page plan has the matching details to achieve the sales goals.
The profit objective is an indirect result of the achieved price and the actual cost structure. So, the sales manager’s objective is to achieve certain prices/gross margins and the operations manager’s objective (as well as the finance manager’s) is to maintain or minimize the cost structure accordingly.
The engineering manager is required to set the objectives to create the plant /production capabilities to produce the volume according to the sales forecast, within the cost targets.
The production manager’s plan will focus on his/her portion of the plan.
Each objective will have a basic action plan on how to achieve it and should reasonably quantify the expected results.
This planning process needs to go down the chain of command and establish the objective for the entire staff.
By adding up all the details at the frontline, you should achieve, or better, overachieve, the president’s original plan.
Once the plan is set, it becomes the management tool and control tool to monitor progress and re-adjust objectives if necessary. This one-page plan can be an intricate part of the weekly/monthly management meetings. The individuals can report their progress (or lack of), their challenges, but also the viability of the original goal. By compiling the progress feedback up the chain of command, it becomes very clear if the company is on course to achieve the plan, or if additional resources need to be activated to catch up.
How complex you make this planning and controlling process is up to you.
My suggestion is always to start small and simple and add complexity only if needed.
The reason for the one-page plan is to:
Communicate the overall company objectives
Detail the individual’s part of the overall plan
Create a tool to measure progress
Create a tool for accountability

The secret to success is not how creative you are in finding improvement potentials. The real secret ingredient is your ability to implement and sustain incremental changes.
To go back to my original Google search, here are tips to make your New Year’s Resolution work:
Write down your goals
Break a large goal into smaller achievable parts
Track your progress daily
Make it public
Create routines that support your goals
Be accountable

They are also valid for your business plan.

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