Every year in April, we start the budgeting process in Newport. This is one of the most important tasks we do each year but probably the least understood. Most people think of a budget as a combination of revenue forecasts for each month and related expense estimates. In principle, that is correct, but it is similar to someone saying they want to make 100 million yen this year without a clear plan.
It is a nice aspiration, but, without clear goals and a plan, it is unlikely to be
successful.
The budgets we make each year are the expected results of our combined efforts during the year. In order to exceed the budget, we need goals and activities that, if done well, will create those results. This is best done by setting the right goals.
For example, let’s look at the daily goals for three door-to-door salespeople:
#1 – Will visit 300 homes each day
#2 – Will talk with 50 people each day
#3 – Will find five customers who could benefit from their products each day
Who do you think will sell the most and why?
I believe that #3 will sell the most. She is the only one whose goal described the end result. She will likely visit 300 homes and talk with 50 people, but those are not her goals. At the end of the day, we hit what we aim for. In her case, she is aiming to find five customers who can benefit from her products.
Now think about your tasks and goals, and ask yourself if they can be improved.
Do they describe the result you want? Can you influence the end result? Do your goals align with your team goals and Newport’s overall goals? If you answer yes to each of these, then I think you will see a big improvement in your performance this year.