Whether you are in Maine trying to get to Millinocket, or are in your FP&A group figuring out how to achieve the latest corporate goals, “You can’t get there from here” may be the only possible answer. Your company may have goals that are simply unattainable given where you are, and the paths available to you.
Some companies simply reduce the goals to what is achievable, and claim victory when the lowered target is surpassed. This would be like wanting to get to California from New York, with only enough fuel to get to Ohio. You then decide that Ohio is your goal. And sometimes, frankly, that is your only option to creating a plan that is achievable. But this should not be the only option considered.
Other companies simply add up the plans from their various divisions, and call that their plan. There may be some back and forth negotiation on the details, but executives at least know what the divisions are signing up to deliver. But this is like taking a trip and making random turns until at some point you stop and proclaim, “We’re here!” Yes, you technically make it to your destination, but it may not be where you really wanted to end up. And it fails to take into account the many interactions or dependencies among your divisions.
With goal-based planning, you start with your overall goals in mind, and then determine what it takes to achieve them, selecting and sequencing the many options available to you. This approach changes the discussion your management team has, focusing on goals instead of arguing over getting more budget for this or that opportunity.
On that NY to CA trip, you would realize that you could take one of many routes, with different total miles or total time required. You may still only have enough fuel to get to Ohio on that trip, but you would know that you’re getting closer to your goal, and you would know what it takes to achieve it. You can then work on getting the necessary resources to achieve the overall goal.
Contact us to discuss how your company or business unit can use goal-based planning to achieve your goals, consider alternatives much more quickly, and ultimately how it improves the value of your company.