Declining Sales Goals

This example points out how accomplishments can decline over time due to drifting goals, possibly without much awareness of what is happening.

In this situation a company establishes a revenue goal at the beginning of the year. This immediately produces a gap because of the difference between the revenue goal and the current revenue. Sales activity during the year produces a level of current revenue at the end of the year, which just happens to be less than the revenue goal.

For the next year the company establishes a revenue goal which is somewhat less than the previous year. When sales for this year produce current revenue less than the revenue goal the goal is again reduced for the next year.

In this manner, over time, the company experiences continually declining revenue, most likely with little awareness of what is happening over the long term. Organizations seem to have even shorter memories than people.

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Copyright © 2004 Gene Bellinger