To manage a business is to balance a variety of needs and goals. If management is focused only on making profits, they're missing many other issues and in fact may be risking the future of the company. To obtain profit today, managers tend to undermine the future. They may push the most easily saleable product lines and slight those that are the market of tomorrow. They tend to short-change research, promotion, and other postponable investments. In other words, they are directed into the worst practices of management.

Objectives are needed in every area where performance and results directly and vitally affect the survival and prosperity of the business. There are eight areas in which performance and objectives have to be set: market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, and social responsibility. We will look at these eight areas and come up with possible objectives that can be measured for each.

Market Standing

One common approach is to say, "We want to be the leader." The other one is to say, "We don't care what share of the market we have as long as sales go up." Both sound logical, but both are wrong. It doesn't do much good for a company's sales to go up if it loses market share-that is, if the market expands much faster than the company's sales do. The market standing to aim at is not the maximum, but the optimum. This requires careful analysis of customers, of products and services, of market segments, and of distribution channels. It requires a market strategy, and it requires a decision of high risk.

Innovation

The test of an innovation is whether it creates value. Innovation means the creation of new value and new satisfaction for the customer. A novelty only creates amusement. Yet, again and again, managements decide to innovate for no other reason than that they are bored with doing the same thing or making the same product day in and day out. The test of an innovation, as well as the test of "quality," is not "Do we like it?" It is "Do customers want it and will they pay for it?" Make sure your next new product or service meets your customers' needs.

Productivity

The greatest need for increased productivity is in activities that don't lead to promotion into senior management with the organization. But nobody in senior management is likely to be much interested in this kind of work, know enough about it, care greatly for it, or even consider it important. Such work doesn't fit the organization's value system. In a hospital, for example, the value system is that of the doctors and nurses, and they are concerned with patient care. No one pays much attention to maintenance, support or clerical work. We should therefore expect within a fairly short period of years to find such work contracted out to independent organizations, which compete and get paid for their own effectiveness in making this kind of work more productive.

Also, when focused on the workers who do fit into your company's value system, it's important not to focus entirely on the quantity of their output. Quality may be even more important.

Physical and Financial Resources

Make sure that the resources you have, both physical and financial, are in line with your objectives in these other areas. The analysis of each of these categories may require the company to acquire new physical resources, and in order to do so it may need to come up with new avenues for financial resources.

Profitability

It is fairly easy to set profitability objectives because companies have tons of financial information at their fingertips. Knowing how much money comes in versus how much money goes out is not a new idea, but consider how your profitability objectives might change as you pursue your objectives in these other areas such as: how would it change if you take new strategic directions with innovations or if you are initiating a plan to optimize your market position.

Manager performance and development

Performance of a business today is largely a result of the performance of management in years past. Performance in management, therefore, means in large measure doing a good job of preparing today's business for the future. The future of a business is largely formed by present-management performance in four areas:

• Performance in appropriating capital: measure the return on investment against the return expected.
• Performance in people decisions: it is fairly easy to determine what is expected of an employee and how well they followed through. Keep track of it.
• Performance in innovation: you can appraise the results of research now, and then look back at the promises and expectations that it had at the beginning.
• Strategies versus performance: Did the things that the strategy expected to happen actually take place? And were the goals set the right goals in light of actual developments? Have they been attained?

Worker Performance

Measuring worker performance is similar to measuring manager performance. There is one key difference, though, and that actually has to do with the effect of managers. A particular worker's performance may be adversely affected by bad management. The test of good management is whether it enables the successful worker to do his or her work. Aside from that, look at the expectations given each worker, and measure each workers follow-through with those expectations.

Social Responsibility

Every organization must assume responsibility for its impact on employees, the environment, customers, and whomever and whatever it touches. That's basic social responsibility. A step above that would be corporate philanthropy, which is good, too, but it's good to remember that good intentions are not always socially responsible. It is irresponsible for an organization to accept responsibilities that would impede its capacity to perform its main task and mission or to act where it has no competence. In other words, when it comes to corporate philanthropy, make sure your company doesn't take its eye of the ball.