How to Achieve Local Growth Objectives
The tradition of assigning annual growth objectives to business units is as old as business itself, and complaining about the growth objectives goal assigned is an equally common tradition that’s also nearly as old.
Businesses must plan if they are expected to meet growth objectives, and part of effective planning is establishing some anticipated level of revenue production, expense control and other performance variables that directly impact the ledger.
Too frequently the revenue and expense targets for a given year are perceived to be handed down from on high somewhat like Moses and his tablets. If this process is initiated, developed and executed without input from the business unit involved, failure to achieve those desired results is almost certainly guaranteed.
In so many cases, the “local business” is likely to be unique to the rest of the organization, and it is assuredly unique when compared to the corporate office. The folks that run the local operation are keenly aware that their business offers its own challenges and opportunities. For this reason alone, they should participate in the objective-setting conversation.
Inclusion in the planning process is just the first step in achieving the goals and objectives set for that local operation. It is equally important to facilitate local success through two main strategies:
- Allow tactical autonomy for local managers
- Establish support systems for local operations that align with the needs of those specific operations
The first point is achievable through well-thought-out lines of authority and workflow approval sequences. Sales managers should be able to target those territories that they feel will provide the highest chances for success. Production planners and purchasing managers should be able to ramp up the business to achieve the goals targeted by Sales. If Marketing is an operating unit at the local level, its programs should be devised in support of the product requirements and the sales targets specified by the local operation.
This does not mean that corporate needs, goals or messaging is ignored; it only means that the local business must serve its own needs. If local and corporate messages can dovetail or complement one another, fine; but the local message, the local product, sales and success must be the primary goal.
Local operations also need to be able to establish systems that support the businesses they are in. This sounds like a no-brainer, but it’s not always the case. In the era following Y2K, great credence was given to the notion of centralized, single-instance operational systems that would cover the entire enterprise. While these systems did provide a sort of seamless, enterprise-wide view of performance, that view was frequently distorted by the lack of local information. Additionally, the systems were not specialized enough to truly serve the needs of the local operation.
Both corporate and local needs can be served. Most operating systems are well-equipped to pass operational data along to the corporate reporting systems in a seamless and efficient manner. Corporate gets the data they need, and the local operation gets the system that best serves their needs to respond to market opportunity.
Read “What Performance Metrics Should Manufacturers Be Measuring and Reporting On” for more information.