David Knoble, CPA, PLLC

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Why Set Goals?

Another great con­cept in  my read­ing that I have real-life expe­ri­ence with is the result of goal set­ting.  Many texts will tell you to set goals and then mea­sure them reli­giously against what actu­ally hap­pens to see where you are.  In account­ing terms this is bud­get ver­sus actual and there is cer­tainly ben­e­fit in pro­duc­ing finan­cial data using this method.  How­ever, there are other under­ly­ing issues that cause the goal set­ting process to ben­e­fit your busi­ness and your life.

What good is a bud­get that you put into a spread­sheet and then store in a three-ring binder?  None by itself.  What good is a new year’s res­o­lu­tion made at a late night party to begin each year?  None by itself.

Dur­ing the late1990’s we had a home­build­ing oper­a­tion that needed to get more effi­cient in pro­cess­ing paper between ven­dors and the account­ing depart­ment.  The home­build­ing indus­try uses pur­chase orders to man­age costs.  These pur­chase orders are the basis of pre­dict­ing cost and thus, set­ting sales prices and prof­itabil­ity.  Our charge was to  increase the through­put of the pur­chase orders and reduce the charges that came in out­side of the approved pur­chase order cost.

Set­ting that goal had very pos­i­tive prof­itable ram­i­fi­ca­tions to our busi­ness if it could be achieved.  In fact, we trimmed the sys­tem down so that a vendor’s work was approved and the pur­chase order input to accounts payable in a day or less.  The goal set­ting is not what caused this suc­cess to hap­pen.  Instead, the work after the goal set­ting is what made this project possible.

We spent three months deter­min­ing what type of sys­tem we could use.  We found a method to give our builders palm-top com­put­ers that could be used to elec­tron­i­cally approve a pur­chase order for a home, a ven­dor and an activ­ity in build­ing that home.  Then this new “elec­tronic” pur­chase order was down­loaded straight into accounts payable.

Through­out the process var­i­ous peo­ple top to bot­tom in the orga­ni­za­tion learned about the sys­tem and gave advice to us about how they do their job and how they could best uti­lize the sys­tem.  We ulti­mately learned about the entire process from issuance of the pur­chase order through the build­ing and sched­ul­ing processes and back into the account­ing processes.

The knowl­edge we gained as we learned about our com­pany is what enabled and empow­ered us to wildly suc­ceed.  The goal in and of itself did noth­ing more than spark some con­ver­sa­tions that lead to the mas­sive com­pany learn­ing process.  A side ben­e­fit of includ­ing so many peo­ple in our project was the train­ing process was much eas­ier and more effec­tive.  We had builders that under­stood the process before it was fully imple­mented and they helped their peers succeed.

Through this expe­ri­ence I could eas­ily agree with the next quote from my newest read:

Set goals not because they will help you reach them, but because they will teach you.

Set­ting goals is impor­tant, but for dif­fer­ent rea­sons.  If you lead your orga­ni­za­tion, think about what you need your orga­ni­za­tion to learn about.  Then have them set a goal around that con­cept.  Meet­ing the goal may be a nice sec­ondary ben­e­fit, but the learn­ing process for your orga­ni­za­tion will ulti­mately add more value.

© 2009, david.knoble
by David Kno­ble, CPA, PLLC
Serv­ing Non-Profits, Busi­nesses & Indi­vid­u­als
Rock Hill, SC

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