Page 167 - Finance for Non-Financial Managers

Siciliano09.qxd 2/8/2003 7:22 AM Page 148
Finance for Non-Financial Managers
148
challenging goals won’t be met because people don’t trust they
can get to where the plan says they can.
The operating plan and the related budget (discussed next
in Chapter 10) constitute the guidebook for action for a compa-
ny’s operating year. The operating plan is usually the joint effort
of every department in the company, coordinated by the
Finance and/or Planning Department, and each department
head will have participated in the planning process by writing
the goals that his or her department will achieve during the plan
year. The operating plan may outline the goals and targets of
each major unit within the company, the P&L budget for the
year, and a budget of planned capital expenditures. In addition,
subsections of the plan may be devoted to individual depart-
ments, so that each will have its individual roadmap to follow.
Information included in the subsections, besides departmental
goals, will likely include staffing, existing and planned additions,
and the department’s financial budget for the year. A suggested
outline for an operating plan is shown in box starting below.
This is the document that goal-driven incentive plans will typi-
cally use as their measuring stick.

Overview
Vision, mission, strategy
One-year summary of company goals
Companywide challenges and opportunities
Production Department plan
Goals
Milestones
Organization and staffing
Facilities
Challenges and opportunities
Budget
Sales and Marketing Department plan
Goals
Milestones
Organization and staffing
Facilities