About Setting Sales Targets

In general, a company sets its sales targets for this year around September or October last year. In many cases, quarterly or semi-annual rollings are carried out in consideration of market conditions and sales progress. Then, for companies that do not involve in-house political elements and do performance-based assessments, the members of the company are promoted as the assessment improves if they achieve their annual planning goals or roll targets. The company is required to set a stretch target when establishing an annual sales target. As a result, there are many leaders who set fewer goals than they can actually do. In fact, leaders who set little and achieve monthly are often judged to be successful. The role of management level is really important, as I have repeatedly stressed. In setting goals, the management, especially the top management, should see the market more clearly than the middle managers do.

A leader in a situation that the market is unexpectedly improving rapidly, or that the current situation has not been expected, such as the Corona virus, exceeding the target of more than 20 percent, or underperforming more than 20 percent, seems not so good. It could be a case that a goal is set less and achieved without effort in order to get a good evaluation, or the leader made a mistake in analyzing the market.

The task of setting annual sales targets is extremely important. I don't like rolling once set goals, nor do I think it's desirable. The leader should be responsible for achieving or failing to meet the goal. That's the leader. We should see the market accurately, take responsibility for setting sales targets, and do our best to achieve them.

As you achieve so, you could receive an assessment fairly. And you should not expect a good evaluation if you do not perform well. The final decision maker who approved the sales target cannot escape responsibility if it falls short.

Establishing sales targets should not be seen as a mere routine. I regard setting sales targets as the most important thing. I think that point is where corporate management begins, and contributions to society begin. So setting sales targets shouldn't be seen as just annual activities. 

You have to see all the numbers. All the numbers including the company's mid- and long-term goals, the previous year's business performance (especially operating profit), the exchange rate, interest rate outlook of each financial institution, the market outlook of securities firms, and the demand forecast of customers. Then, the company should summarize sales targets by product and forecast prices, and analyze the costs forecast by the Treasury Department to make a cost outlook and clearly forecast operating profit.

Based on this, the decision maker who receives the report should add the information, data, and enthusiasm she or he can obtain to modify the target, and present a clear number so that the final sales target can be determined. As always, the decision maker's role is especially important when it comes to annual sales goals.

If annual sales targets have been set, this must be achieved.