Page 166 - Finance for Non-Financial Managers

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Business Planning
ant surprises at the 11th
SMART Goals
hour, when your staff “dis-
covers” they won’t make it At any level in any organi- 147
zation, smart managers
by tomorrow, as was com- know that they get the best results by
mitted. A trackable goal setting goals that are well thought out
might be an annual sales and SMART:
goal of $120,000. •Specific
•Measurable
Seasonal adjustments
•Achievable
aside, you might expect to
•Relevant
bring in $10,000 a month
•Trackable
during the year and ask
questions if any month fell much short of that. Thus you will
know how the team is doing well before the fourth quarter and
can take action to redirect resources, if necessary, to ensure the
goal is met.
Short-Term Goals and Milestones—The
Operating Plan
Once the grand design of the strategic plan has been laid out,
the company will need a detailed plan for its managers and
employees to follow. While the strategic plan typically covers a
period of three to five years, its implementation is usually
thought of in terms of one-year periods, each of which is guided
by an annual operating plan.
The year covered by an operating plan is typically the oper-
ating or fiscal year of the company. The plan will recite the
overall goals of the company for the year, then break those
down into the individual goals and action items that each
department must achieve or accomplish in order for the compa-
ny as a whole to meet its goals. Further, for a plan to be effec-
tive, it must be trusted, meaning that employees must believe
that the thought process that went into the plan had reasonable
foresight, awareness, and thoroughness. Otherwise, it will be
second-guessed at every step, with the likely result that every
step will cost more in resources than planned, and some more