Managing a business is hard and finding ways to make it easier is an attractive thing to do, that’s why bad managers love percentages.
On many occasions we have discussed the fact that in order to be effective as an individual or an organisation you need a goal. Good managers and especially good leaders ask themselves every time they take a decision “does this move us toward our goal or away?” However, that’s not enough and if you are setting the goal be careful what you wish for.
An increase in sales by 10% DIFFICULT = increase sales and maintain or improve margins. EASY = drop the price until more people buy but margin suffers or even goes negative. Bad managers can chose the easy route.
An increase in output per person by 20% DIFFICULT = make each person more efficient and productive. EASY = a voluntary redundancy scheme to reduce headcount by seeing all the good people go, output per person goes up in the short term, the company goes under in the long term. Bad managers can chose the easy route.
Decrease inventory by 10% DIFFICULT = work out what you really require. EASY = reduce stock holdings and don’t worry if customers can’t be supplied on time or you run out. Bad managers can chose the easy route.
Want to lose weight by 10% – EASY = cut off an arm – it works!!! Silly example but why is it the solution in so many businesses? Want to reduce costs – CUT.
Anyway, you get the idea. Percentage goals are always really easy to achieve and that’s why bad managers love percentages. They are easy to achieve and make them look good. Good managers hate percentages as they are hard to achieve without adverse consequences and hence make them look bad if they do the right thing by the organisation but miss the percentage.
If you want to be effective then you must only consider the ultimate goal and not short term easy wins in percentage terms that may and almost certainly will have negative effects on that goal.
If you want to look at this further we have both manufacturing and service simulations to enable everyone to be more effective then please contact us for details – https://www.wellsassoc.co.uk/contact/
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