By Viviane Martins, executive director at FALCONI
The end of the year is always a race against time when you need to complete what still remains undone, as well as define next year’s goals. The relevance of good goals for any company must be underscored, since they reflect the direction signaled by the strategic plan in a balance between functions, elements that leverage results and the pace of their execution. The economic situation provides critical input for defining goals, especially in commodities markets, such as pulp and paper.
The year 2017 is expected to close with cellulose prices up, with a heated global market without inventory, driven by China, whose ports registered historically very low levels of inventory in the second half of the year. Although there is no consensus among market analysts regarding the continuation of rising cellulose prices, we can expect prices to remain high in 2018, after the adjustment to supply made by producers worldwide.
In the Brazilian market, even for a year expected to manifest a certain volatility due to uncertainties in the election process, we have seen companies confirming investments in the face of the global outlook of low cellulose inventories, high exchange rates and growth of Brazilian GDP (Focus Bulletin, Nov/2017). Goals for 2018 should reflect this scenario.
Besides the economic perspective, every company should examine its internal environment when setting its goals, taking into account strategic projects underway, planned investments in technology (able to have a strong impact on production), installed capacity and human resources. This set of factors enables senior management to propose challenges for next year in terms of the company’s profitability, investment capacity and cash generation.
In view of these challenges, managers must undertake improvement goals related to volume, costs and use of installed capacity, and carry them out with their teams. Well-executed goals ensure a perfect connection between strategic objectives and the day-to-day operation of the company, which involves a large part of the team.
What is essential?
There are certain critical factors for quality execution of goals. First, goals must be based on gaps, i.e., the potential for improvement in each specific problem, stemming from a comparison between current performance and benchmarks such as good practices, whether these gaps are internal (any waste or loss is, by nature, a gap) or external. Correcting gaps enables the challenges of goals to be proportional to opportunities, breaking away from linear goals that generate a certain injustice among the team.
Second, there must be an action plan for each improvement goal, where the knowledge of the team and, if necessary, the knowledge of other teams in the company, or even from the outside, is brought to the table so that new performance levels can be achieved. And, last, there is no perfect plan! No plan yields results without disciplined execution and without systematically verifying its effectiveness, with countermeasures based on new rounds of analysis, established whenever necessary to correct the path for achieving the goal.
What should I do as a manager?
The participation of managers in this process is essential. The first step is understanding that the economic results for which managers are responsible can be broken down into elements that leverage very specific operating results, in addition to reflecting how the work is distributed within the structure of their teams, bearing in mind that each person is responsible for results that reflect the part of the process for which they are in fact responsible.
Current performance must be analyzed with the team and gaps need to be calculated, prioritizing those specific problems according to their impact on the company’s overall results. Indispensable pillars that support the company’s daily operation should also be developed, such as safety, people and the environment. Once the gaps have been prioritized, improvement goals are proposed with the team, in order to correct a relevant portion of the gaps in the first year of execution: well-calibrated goals are challenging, but achievable.
The manager must then determine whether the actions carried out by the team are sufficient to support the overall challenges assumed and, if not, promote negotiation within the team, adjusting the correction of certain gaps or even reprioritizing certain problems. Once this is done, the goals are defined and can be validated by senior management.
Well-developed goals involve all organizational levels and will result in attaining the desired results for 2018, in addition to making individual contributions to the collective objective clearer and more effective.
As Professor Vicente Falconi says, managers are leaders, people who “achieve goals with their teams, doing it the right way,” respecting values.
Text published in the January 2018 edition of the magazine O Papel, in the leadership column.