Set realistic goals for yourself, your company and your workforce and you can make a major difference to profits and efficiency.
I HAVE never been a big fan of New Year's resolutions, at least not those such as 'Learn Italian this year' or 'Improve my backhand'. They seem fuzzy.
They're also subjective. Who's to say when I have adequately 'learned' Italian? They're hard to evaluate. How good does my backhand have to get? And, quite often, they turn out to be impractical or unachievable. In pursuing these goals, I may learn that I have no affinity for Italian or that my backhand is beyond improvement. In order to succeed at the resolution game, I've learned, your goals have to be: very specific; easy to evaluate by objective standards; and realistic.
For example, one year I resolved to spend more time at my Florida residence and less time travelling. That's not exactly a unique goal. What well-travelled executive hasn't, at one time or another, vowed to 'spend more time at home'? But it also failed to meet the above criteria.
So I refined the goal. I aimed to spend at least 100 days at home in Florida. It was a specific number that would be easy to evaluate as long as I kept track. And best of all, it was realistic (more than 100 days simply wouldn't conform to my travel schedule). In other words, it was achievable. I would end the year with a personal success rather than a failure.
I try to apply the same standards to my business goals. This year, I'm keeping my corporate goals small, with a continuing focus on making our organisation more cost-efficient and more responsive to our customers and to sudden changes in our industry. These are worthy goals for any CEO or manager. However, to achieve them, I know I have to be more specific - to attach real numbers to the goals. Here are 10 specific resolutions I intend to keep in 1995: 1. Speed up collectibles. Every month, examine five ongoing business relationships to see if your customers are paying you promptly and according to the terms of your agreements. You'd be surprised how many of your customers have no idea what the contracts say or, worse, are waiting for a reminder to pay up.
2. Retrieve lost customers. In the next 12 months, make a point of personally calling on 10 old customers who have stopped doing business with you. Find out why they stopped, apologise if necessary, and don't leave their office until they agree to give you a second chance.
3. Wrest control of forgotten expenses. While every boss knows enough to look carefully at his employees' travel and entertainment expenses, there are hidden costs at any company that employees could handle more responsibility. Isolate four everyday expenses in the workplace - say newspaper and magazine subscriptions, fax machines, messenger services, overnight mail delivery - and monitor how people use or abuse them. Who knows? You may find out you are paying for 23 duplicate subscriptions to The Wall Street Journal, that the fax machine is routinely tied up with 40-page documents that could be delivered by mail, and that some of your more harried people send even the most mundane correspondence by overnight mail.
4. Identify the 'promotables'. Make a list of 10 people in your company or division who are worthy of promotion now. This modest exercise raises several provocative questions. Are you satisfied with your list of people? Or would you be better off promoting from the outside? Are you doing all you can to help these people advance with your company? Or are you prepared to let them seek advancement elsewhere? More important, what about all the people you kept off the list? If they're not promotable now, do you expect that to change in the near future? 5. Squeeze your suppliers by 10 per cent. In an economy where everyone is constantly tightening their belts, it seems customers are constantly squeezing us on price. Perhaps you should be passing along the practice when you are the customers? Re-examine every agreement with your suppliers and vendors and, where possible, negotiate the price down 10 per cent. If a supplier won't budge, take your business elsewhere.
6. Build up your bench strength. Ask all your department heads to identify the subordinate they regard as their worthy successor. If nothing else, you'll learn which executives are making an effort to groom future leaders and which ones are running one-man shows (and therefore have a lot more managing to do).
7. Confront your competition. Evaluate the strengths and weaknesses of your company's two nearest rivals. Use that information to target three of their customers and then persuade those three to conduct their business with you.
8. Barter more. Never go into a negotiation without trying to inject at least one barter component into the transaction. Even if you only succeed one out of every 10 tries, you will reduce your company's expenses. Whenever you eliminate the element of cash from a transaction, you are, in effect, buying a product or service at less than wholesale.
9. Gather your bills. And study them. Identify a dozen products or services you consider 'nice to have' rather than 'must have'. If it's not too late, cancel the order.
10. Increase your praise. Write at least one internal memo each month (or week, if applicable) praising an employee for outstanding work. And circulate it throughout the company.