There I sat, new job, GM of quite a large drink’s wholesale company and my new boss, the MD of one of Ireland’s largest drink companies outlined my “objectives” for the year.
Hit these objectives and you got your bonus at the end of the year …simple.
One of these was really unrealistic – he wanted me to raise the Gross Margin % from it’s current level to a higher figure. I explained clearly that this would be impossible as the business volume was shifting from pub products (higher margin) to off licence products (much lower margin) due to lifestyle trends which pretty much everyone in the industry had accepted.
This led to a really lengthy discussion where we both made our case and fought our corner with no real resolution. I explained that the “money” margin on these off licence products could actually be higher and the target should be a money one and not a % one. At the end of the discussion he insisted that my “target” stood and I quite politely told him that it was impossible.
I left the meeting knowing this target could not be achieved but determined to drive the business forward in the most profitable way possible.
“I’m not very happy with your performance, you missed your objective and as a result you won’t be getting your bonus!” he said to me across the desk, a year later as we had my review. He waited for my reaction, expecting me to fight my case or get all offended.
“I know, and I told you that a year ago” I responded “and to be honest I don’t really care about a bonus if it’s based on the wrong criteria. I care about doing a good job” …. silence.
After that , we never really got on too well. I guess it was because I didn’t behave like the others he was used to dealing with and the “Carrot” didn’t matter to me one way or the other.
You don’t always need a carrot to force good work and if you’re making targets for your team make sure they are realistic and they believe in them.