Why Do Managers Need Objectives?

Why Do Managers Need Objectives?

If you know where you are going you stand a much better chance of actually getting there – never a truer word was spoken!

No organisation has one magic objective that covers everything it is trying to do and no individual manager has one unifying target or focus at any point in time. Simply saying that our only objective is to maximise profits is too broad, glib and does not even get close to making the organisation a success.

The problem lies in balancing the many different objectives that we all face.

The starting point for an organisation might be as below:

  • To increase market share to x percent
  • To maintain return on capital employed at its present level
  • To increase turnover in real terms by x percent
  • To maintain profit as a percentage of sales at its present level
  • To launch Product A by a given date, achieving a return on investment of £a in the first year

This is only a starting point as policies and plans are then needed to make this a reality, evaluating alternatives, keeping options open and continually reviewing progress as we go.

There are eight areas where organisational Performance Objectives need to be set:

  • Market standing
  • Innovation
  • Productivity
  • Physical and Financial resources
  • Profitability
  • Manager performance and development
  • Workforce performance and attitude
  • Public responsibility

Another area in need of some clear attention is the measurement of sales and sales development. Quantifiable assessments here should focus upon:

  • Market share
  • Profits as a percentage of turnover
  • Sales turnover
  • Sales turnover per employee

Whatever metrics that you identify make fully sure that they will give you data, information and knowledge that allows the organisation to grow and develop and that they can be easily assessed in terms of targets being achieved and success effectively measured.

Good Luck!

For more details about our services visit the website www.davidsummertonconsulting.co.uk

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