Consulting Journal: Methods - Describing targets

This article is reprinted from The Consulting Journal
http://www.consultingjournal.com

Methods: Describing targets

by David Blakey

Every time a target is mentioned, I don't just need to hear a number. I need to know the impact of not making target, the alternatives and the actions for those alternatives.

[Monday 26 November 2007]

You have probably been in a meeting when a conversation like the following has occurred.

A: What were sales of this product last month?
B: Around 50,000.
A: We need to sell 100,000 per month. See if you can get it up next month.

And next month ...

A: What were sales of this product last month?
B: Around 75,000.
A: We still aren't hitting target. We need to get this up.

And so on.

Messages

These conversations convey a lot of messages. They also do not convey messages that they should.

Impact

Why do we need to sell 100,000 per month? Is this the break-even volume? Is this the target that will trigger bonuses?

Even if B should know the impact of not selling at least 100,000, A should still reinforce the message about the impact.

A: We need to sell 100,000 per month to break even. Or we'll discontinue the line
or
A: We need to sell 100,000 per month to meet quota. Otherwise there won't be bonuses.

Every time that the target is mentioned, its context and the impact of not making it should also be stated. This is the road. If x happens, we have succeeded. If not, then we shall do y.

Importance

How important is it that sales are increased? Not much, apparently. If A wants something to happen, he should check that it can happen and then get a commitment that it will.

A: We still aren't hitting target. How much can you do this month?
B: Around 75,000.
A: OK. That will be the minimum. Let me know as soon as you hit 75,000. If you can't do it, we'll review the situation in detail, so you'll need to bring some thoughts to the next meeting. Also, we still need to make up the shortfall before the end of the year, so find a way of hitting 120,000 next month. Let me know what you need to do it.

B now knows all the next steps.

If he sells 75,000, he can call A. A should congratulate him and then tell him to concentrate on his plan for next month. At their next meeting, they can concentrate on that plan.
If he does not sell 75,000, the next meeting will be a review by A.

Every time that alternatives are mentioned, the actions for and consequences of each alternative should be stated. The road forks. If x doesn't happen, we do y. If it does, we do z.

Now the sales targets are important, because they matter enough to have plans attached to them.

Conclusion

Now we have the impact, the size and timing of the expected results, and the actions that will follow, depending on those results.

I want to stress that these need to be stated every time. They need to be stated every time that the target is mentioned in any discussion.

C: What's our target for this product?
B: 100,000 per month to break even. I'm aiming for 75,000 this month, and planning for 120,000 next month. If I can't make 75,000 this month, then I'll review the situation with A. If I do make it, then we'll go through my plans for 120,000 next month.

I am serious. Every single time.

C: What did you say your target is?
B: 75,000 this month, with a review if I don't make it. We need to sell 100,000 to break even, so I'm looking for 120,000 next month and I'm putting plans together for that.

A:	What were sales of this product last month?
B:	Around 50,000.
A:	We need to sell 100,000 per month. See if you can get it up next month.

A:	What were sales of this product last month?
B:	Around 75,000.
A:	We still aren't hitting target. We need to get this up.

A:	We need to sell 100,000 per month to break even. Or we'll discontinue the line
	or
A:	We need to sell 100,000 per month to meet quota. Otherwise there won't be bonuses.

A:	We still aren't hitting target. How much can you do this month?
B:	Around 75,000.
A:	OK. That will be the minimum. Let me know as soon as you hit 75,000. If you can't do it, we'll review the situation in detail, so you'll need to bring some thoughts to the next meeting. Also, we still need to make up the shortfall before the end of the year, so find a way of hitting 120,000 next month. Let me know what you need to do it.

C:	What's our target for this product?
B:	100,000 per month to break even. I'm aiming for 75,000 this month, and planning for 120,000 next month. If I can't make 75,000 this month, then I'll review the situation with A. If I do make it, then we'll go through my plans for 120,000 next month.

C:	What did you say your target is?
B:	75,000 this month, with a review if I don't make it. We need to sell 100,000 to break even, so I'm looking for 120,000 next month and I'm putting plans together for that.