Philip Walcoff - "The Fast Forward MBA in Business Planning for ...

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Philip Walcoff - "The Fast Forward MBA in Business Planning for Growth"Page 110annual objectives stem directly from each of the five-year goals you developed in Chapter 7 andidentify what has to be achieved by the end of this fiscal year in order to be on track with your five-yeargoals. A five-year goal may produce multiple annual objectives. Objectives need to be specific,measurable, and somewhat aggressive but realizable milestones on the way toward meeting your fiveyeargoals.Establishing a Planning TimeframeAnnual objectives reflect both quantitative and qualitative milestones for the company that must beachieved in order to have a good year and support the eventual attainment of your five-year goals. Indeveloping your annual objectives, you must determine the year you will be setting objectives for. Ifyou are currently in the first three-quarters of your fiscal year, set your annual objectives for the end ofthis fiscal year. Your first business plan will therefore span a period of 3 to 12 months. If you are in thelast quarter of your fiscal year, develop your objectives for the end of your next fiscal year; yourbusiness plan will therefore span a period of 12 to 15 months. No matter where you are in your fiscalyear, don't put off completing your planning until you approach your next fiscal year—do it now so youcan put your company on the road to success today.As discussed earlier, this plan is hopefully the first in a series of plans that you will revisit and updateeach year. Prior to the beginning of each of your future fiscal years, you will rethink the strategy youdeveloped in Chapter 7 (vision statement, mission statement, and five-year goals), make any necessarychanges stemming from internal or external business stimuli, and develop a new set of annualobjectives and a new action plan for the coming year. The important thing is to develop the plan nowand get in synch with your fiscal year at your next planning session.Page 111Establishing AccountabilityFor all but the smallest companies, achieving the annual objectives is not the CEO's responsibilityalone. Other senior line and staff managers must take on this responsibility, as well. Holding allexecutives accountable to these annual objectives is an excellent basis for assessing their performanceand is what management by objectives is all about. (Management by objectives is discussed in moredetail in Part 4.)file:///C|/Documents and Settings/gasanova/Local Setti...orward_MBA_in_Business_Planning_for_Growth/e-book.html (124 of 219)16.02.2005 13:54:23
Philip Walcoff - "The Fast Forward MBA in Business Planning for Growth"Each annual objective needs a champion to take on the responsibility for achieving it. If you are a soleproprietor or you run a small business with just a few employees, there may not be anyone else to takeon the responsibility for the annual objectives. If your company has employees, consider assigning themat least a portion of an annual objective or two in order to give them a direct hand in the future successof the company. I have often been surprised at the results from previously untried personnel—one ofthem could be a future vice president.For example, assume a company gross revenue objective of $10 million. In this case, each operatingdirector (department head, division director, etc.) may be assigned—or, better yet, volunteer—to takeon a certain revenue figure whose sum, for all operating elements of the company, meets or exceeds thecompany's $10-million objective. In turn, each operating element should use its objective as the basisfor assigning targets to various subelements of the operating organization, and so on throughout theorganization. This approach of decomposing company targets and assigning them to the various lineand staff organizations is an effective means of monitoring company performance and evaluating keypersonnel.Revenue ObjectivesJust as you developed five-year revenue goals in Exercise 25, you should have annual revenueobjectives, as well (Exercise 32). Table 8.1 provides a comparison of a five-year rev-TABLE 8.1 EXAMPLE OF A FIVE-YEAR REVENUE GOAL AND ARELATED ANNUAL REVENUE OBJECTIVEPage 112Five-Year Goal:Total Revenues,$40 MillionAnnual Objective:Total Revenues,$19 Million (T. Boss)By Client AreaFortune 500 companies, $18millionFederal, state, and localgovernment, $18 millionInternational, $4 millionFortune 500 companies, $2 million (J.Smith)Federal, state, and local government, $17million (T. Jones)No international objectiveBy Business Areafile:///C|/Documents and Settings/gasanova/Local Setti...orward_MBA_in_Business_Planning_for_Growth/e-book.html (125 of 219)16.02.2005 13:54:23
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