Author:
Dan Keeler
Vive La Resolution!
For many people, the New Year is a time to take stock of their lives and to set goals for the year ahead. And if it works for individuals, then why not for companies? While most companies launch with a business plan that sets out clear goals, far fewer will review those goals on a yearly basis.
The beginning of the year is a perfect time to look not just at financial performance but at the whole business, from its impact on the community as a whole to its progress in fulfilling the needs of its shareholders, investors or owners.
But there are pitfalls, as many who make personal New Year’s resolutions find out. More often than not people set unrealistic goals that they will almost certainly fail to achieve. How many people quit smoking and join a gym on January 1st only to take up the weed again as their dreams of a new, fit self lapse with their sports club membership?
Companies can easily fall into the same trap. The goals might be too big or broad, for example. A manufacturing company that aims to totally eliminate toxic emissions within a year might be setting itself up for failure. Alternatively, the resolution might be beyond the organization’s control—such as determining to find a merger partner within the first quarter of the year.
The key to success is to set specific goals that are achievable. They can be ambitious but they must be realistic. In fact, setting the goals could actually be the most valuable part of the exercise. The process of deciding honestly what is a feasible goal for a company can be as instructive as any formal management review. Armed with an understanding of its potential and its limitations a company can enter the New Year with a clear vision of the possibilities and challenges ahead—and a much better chance of achieving its goals.
For many people, the New Year is a time to take stock of their lives and to set goals for the year ahead. And if it works for individuals, then why not for companies? While most companies launch with a business plan that sets out clear goals, far fewer will review those goals on a yearly basis.
The beginning of the year is a perfect time to look not just at financial performance but at the whole business, from its impact on the community as a whole to its progress in fulfilling the needs of its shareholders, investors or owners.
But there are pitfalls, as many who make personal New Year’s resolutions find out. More often than not people set unrealistic goals that they will almost certainly fail to achieve. How many people quit smoking and join a gym on January 1st only to take up the weed again as their dreams of a new, fit self lapse with their sports club membership?
Companies can easily fall into the same trap. The goals might be too big or broad, for example. A manufacturing company that aims to totally eliminate toxic emissions within a year might be setting itself up for failure. Alternatively, the resolution might be beyond the organization’s control—such as determining to find a merger partner within the first quarter of the year.
The key to success is to set specific goals that are achievable. They can be ambitious but they must be realistic. In fact, setting the goals could actually be the most valuable part of the exercise. The process of deciding honestly what is a feasible goal for a company can be as instructive as any formal management review. Armed with an understanding of its potential and its limitations a company can enter the New Year with a clear vision of the possibilities and challenges ahead—and a much better chance of achieving its goals.
| New Corporate Financing Coverage |
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In this month’s issue we showcase our expanded corporate financing section (see page 41). As always, we cover the essentials of four key areas of corporate finance—foreign exchange, mergers and acquisitions, corporate debt and global equities—but each month we’ll go into greater depth on one section. I hope you like it.
Until next month, Dan Keeler dan@gfmag.com |
