MODERN MARKETING
The Tyranny of Forecasts,
Targets and Budgets
By Professor Malcolm H.B. McDonald
Any idiot can set forecasts,
budgets and targets
Even a laptop can do this without
human intervention
Without a market-based strategy,
targets just cause chaos
Targets force people to concentrate
on the target instead of customers
Surely we’ve learnt something in
the last 20 years?
“The good thing about not having
a strategy is that failure comes
as a complete surprise and is not
preceded by a long period of worry
and depression”.
Don’t be fooled into thinking those
12 ModernBusiness
June 2016
words by John Perton of Boston
College just represent an academic
trying to score points by being clever.
It is amazing to me how many major
organisations go under because they
have little more than sales forecasts
and budgets for the following year.
How surprised they are when their
customers abandon them in favour
of another supplier who has taken
the trouble to work out a longer term
strategy for understanding and really
meeting their needs.
Almost every UK company achieving
high returns on investment up to
1990 either subsequently went
bankrupt or got into serious trouble.
The best performing companies up
to 2000 fared little better, with the
likes of Marks & Spencer, ICI, GEC
et al either going out of business
or systematically destroying
shareholder funds. Some of these
companies have since partially
recovered, such as M & S, BT and
BA. The first decade of the 21st
century has seen a continuation
of the demise of erstwhile famous
companies too numerous to
mention. The lessons to be learned
from those decades are still highly
relevant for companies currently
enjoying high growth today.
Let us dismiss, once and for, all