Goal Setting for the New Year

As the new year picks up steam from the holiday lull it is important to start planning the steps necessary to be successful. Goal setting is a powerful tool to achieving success! (I was going to say "achieving goals" but if you don't have any goals then you can't reach them!) That leads to the next question: Why set goals?

Picture yourself trying to shoot an arrow at a bulls eye target with your eyes closed. Can you do it? Maybe. However, most probably not! Same thing goes for success! If you can't see it, how can you achieve it? The best way to achieve success is to define it by setting goals.

How far out should you set goals? Depends on how big your goals are. At a minimum you should set goals for the next year. I prefer to set goals over a three year period. I then break them down to annual goals, quarterly goals and weekly goals.

For our company we use the holiday lull in business to begin planning for the new year. The first step is to have a brain storming session with the key players in the company. Typically, that would be department heads. In this session we throw out every conceivable goals that we want to accomplish. Generally, we come up with 30 to 40 goals.

Out of these goals we identify 4 to 5 major goals for the next one to three years. We then organize the remaining goals underneath the major ones with targeted completion dates. Next, we identify quarterly milestones for each goal leading up to completion. Finally, we assign these goals to departments or functions in the organization.

Once completed we have a road map to success. However, this in itself is not enough. The last step in goal setting is to assign these goals to individuals within the organization. Their performance evaluations and bonuses are then tied to how effective they are in achieving the company goals.

Does this process work? We have been using it for ten years. Each year we are setting higher and higher goals for the organization. Do we achieve them all? No, we do not. But if we achieve 50% we are much farther along than without them. Remember; if you don't aim for a target, then you won't hit it!

Computers Change CFO's Role

When I started out in public accounting in the late 70's I remember working with green bar paper, IBM 36 computers and having to foot computer reports because you couldn't trust them to add correctly. As a new hire you had to prove your proficiency with a 10-key adding machine before you were sent into the field. Now most people don't know what a 10-key adding machine is!

Accounting programs were cumbersome at best and often required manual oversight to make sure they stayed in balance. Accounting departments were made up of numerous clerks and accountants entering and reconciling data.

A lot has changed in 25 years. Today if you print a report out of a computer you expect it to foot! Data entry has been simplified and is often captured outside the accounting department. Accounting software is written in such a way that makes it difficult for the subsidiary ledger to be out of balance with the general ledger. (It may not be correct, but, at least it will agree!)

So what happened? Welcome to the computer revolution. Because of the increased power of computers and sophistication of accounting software you no longer need the same number of people to maintain accounting systems today. Furthermore, the role of CFOs and controllers of smaller has changed.

In the past a CFO/Controller had to manage a larger staff and be more of a technician to manage the process. Now with automation and outsourcing those functions no longer take up as much of their time.

As the amount of time devoted to accounting tasks decreased the time alloted to other administrative areas has increased. CFO/Controllers today are often responsible for human resources, information technologies, insurance and facilities management. In fact, the CFO/Controller role could be better described as the chief administrative officer.

Today there is a new resource!

WikiCFO was created to be a repository of best practice ideas in the various areas affecting the job of a chief financial officer or controller of middle market companies. CFO/Controllers can go there to find and share tips and tricks in cash flow, profit improvement, health benefits, information technolgy, banking, payroll, etc. WikiCFO enables CFO/Controllers to drive more value to the bottom line!