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Applying W. Edwards Deming to Small Business Management
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Setting Numeric Goals, Why Not

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Louis Altazan

Joined: 15 May 2007
Posts: 774
Location: Baton Rouge, LA

PostPosted: Sun Jan 04, 2009 4:43 pm    Post subject: Setting Numeric Goals, Why Not Reply with quote

In my experience, most things in life are neither inherently good nor bad. Rather their use or misuse determines the outcome. A brick can be used to build a home or smash a store window.

Numeric goals can be another example. I may set a goal to loose 25 pounds. No harm is done as long as the goal is reasonable. For instance if my ideal weight is 180 pounds and I weigh 205 pounds. The goal is obtainable, I have control of the inputs and it gives me a target with which to measure my progress.

Why then did Dr. Deming suggest eliminating numeric goals in point eleven. For instance I decide my company needs twenty-five percent more sales. I set this as the goal and charge my staff with obtaining it. Perhaps I offer a reward for meeting my goal. This is quite different from the goal above. The first question might be, is the goal obtainable? If so, why is it not currently being obtained?

I think Dr. Deming intended, simply setting a goal is not likely to obtain them. Instead correcting the reasons why sales are not currently at the desired level will produce results. With the proper steps, correctly implemented, sales will rise, no goal needed. In fact a goal can become a limiting quota to what is possible.

For instance sales may be low because there are not enough clients. Services offered may not be what potential clients want. They may also be low because poor sales techniques are used by the staff. Another reason may be the business lacks production capability to produce more sales. Each problem requires a different solution. With the proper solutions sales may rise far in excess of 25%.

A new year often brings with it the desire to see improvement. Improvement comes when the factors controlling the improvement are implemented. It is a continuous process and requires thought and long-range planning. By pitching the numeric goals a business may start down the road to real improvement, with the Deming management method.

Louis Altazan
Owner/Manager AGCO Automotive Corporation
Baton Rouge, LA
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