How to Make 2000 Your Best Year Ever

 

Setting goals can be the difference between a marginal year and one that sets the century standard.

 

By Tom Dossenbach

 

How would you like to see Y2K be the best year ever for your company with better profits, higher quality, increased on-time deliveries, improved productivity, and less employee turnover -- just for starts?

This month's topic is one of the most overlooked tools of management and as a result is one of the most common causes of poor performance in many companies. The American Management Assn. has reported that almost 60% of middle managers do not have specific goals and 67% do not have regular reviews of progress being made in their area of responsibility.

Sadly, 40% of these same managers state they think that their jobs did not sufficiently challenge them. I estimate that a full three out of four woodworking companies do not commit goals to writing. If they do, they do not share them with their managers and supervisors and do not require them to do the same. There is little, if any, mention of goals during the year and no formal constructive review of the progress that is being made.

Hopefully this is going to be a very good year for you and your company. However, most individuals and companies will fall far short of their potential.

How will these individuals and companies react to a year that could have been better?

Case Study
The following is an example of a midwestern company struggling three months before the end of a "good" year.

This kitchen cabinet manufacturer will finish 1999 with an overloaded backlog. In fact, it lost business during the year because it simply could not keep up with demand. The plant is jammed with work in progress and lost or damaged pieces are a daily occurrence. While profits are up because of the increased volume, the profit margins have been falling all year. On top of that, employee turnover will approach 100% by the end of this year.

Also, several of this firm's large customers say if things don't get better they are going to start using other suppliers. And though next year's volume looks like it will be about 5% less than this year, it will still significantly tax capacity.

There are many ways this company could react to these challenges. Only one of the three mentioned here will guarantee a stellar year for Y2K.

Denial Reaction
Everyone realizes that this has been a year with problems but they rationalize, "Everyone is working hard and we should have things under control by the end of the year. We have been going through cycles like this for the past 18 years and have always found a way to live with our problems. Besides, we have made good money so far this year."

A company in denial will admit it's been a tough year but accepts this as part of being in the business. The managers say, "if it's too hot, get out of the kitchen! We just need to pull together, get the factory floor cleaned up, try to hire some more people, work more overtime, and increase production." No real direction is provided with this reaction.

With this reaction this company will have less than a 50/50 chance of surviving the next five years.

Motivation-by-Fear Reaction
Management is fed up with the phone calls from irate customers and the lost profit opportunities during the year. Things have to change and change now! The president calls in the production manager and blesses him out. "1999 was a bad year and things have to get better. If they don't, we will have to find a new production manager!"

So, the production manager calls a meeting of all the supervisors. "This year has been hell! Just look at the plant -- it's a mess; and profits are down! The old man has been on my case for the last time. I want you to get out there and get it together before we all lose our jobs!"

Is there any doubt that this meeting will be repeated over and over again during next year with marginal results at best? Moreover, turnover will get worse -- not better!

Proactive Reaction
The management of the company recognizes that there are serious challenges and that there are symptoms of serious consequences in the making if something isn't done early the coming year. They make the commitment to define the problems quickly and to get their key people involved in meeting those challenges.

A team of key personnel and management is assembled to figure out a battle plan for the coming fiscal year. This management team sits down and draws up point-by-point company goals for next year. They look for ways to personally contribute to these goals and write goals and action plans for themselves. Then they get others involved in the same process.

Goals With Action
It is obvious that the third reaction is the correct one. However, many woodworking companies do not have a sense of direction to take them to where they want to be at the end of a given year. This is because neither they nor their managers or supervisors have taken the time to write down what needs to be done or how to do it.

A goal is meaningless unless it has corresponding action plans that can be carried out and monitored. The kitchen cabinet company previously mentioned can set a goal to reduce turnover by 50% during 2000. That's a "SMART" [Specific, Measurable, Attainable, Realistic, and Time-Based] goal. Now, the human resource people and the supervisors have to devise their own goals and action plans that address how to accomplish this company goal. It will be important to get employees involved as well.

To insure success, they need to meet periodically during the year to review progress in meeting their respective goals. Feedback allows for modifications and clarifications which will greatly enhance the chance for successful on time completion of these goals.

Do not go into next year without identifying your greatest problems and then setting goals. Convince others to buy in, and together create action plans to reach those goals. Make no mistake, this can be the difference in a vital company versus a dying company in Y2K!

                                                                                                                                                                                           

Have something to say? Share your thoughts with us in the comments below.