But critical numbers themselves set a goal right now, not for all time. The more people that are involved in identifying them, the easier they'll be to communicate. But wherever they originate, a company's critical numbers must meet two criteria. First, they must reflect the real competitive threats and market opportunities the business is facing at the time. In a turnaround situation, for example, adequate cash flow is likely to be a critical number.
Some critical numbers reflect weaknesses and vulnerabilities.
A company might decide to increase a below-average return on assets, say, or reduce its dependence on a single product line. Others reflect new opportunities, such as a revenue target for a new service. But critical numbers must indeed be critical, and must set realistic goals. The linkage is critical not just because businesses are evaluated on both sets of criteria, but because any set of objectives must be internally consistent. Some initiatives and investments, of course, will harm rather than help short-term financial performance.