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Goal Setting Vital to Business’ Success

At CDW Corporation, they’re getting ready to initiate an EBITDA-meter. At Calamos Investments, a recent move into overseas markets has given the firm’s executives a new frontier in measuring performance of the company – and its employees.

In both cases, the importance of setting goals and the expectation of achieving them is ingrained into the companies’ cultures.

John Edwardson,’72, chairman and chief executive officer of CDW, and John Calamos Sr., CEO and chief investment officer for Calamos Investments, shared their experiences at a panel discussion at the 56th Annual Management Conference at Gleacher Center May 16 moderated by dean Edward Snyder.

Calamos said goal setting at his firm, which he founded in 1977 with a handful of employees, has remained the same in some respects but in others, has changed markedly over time. When you start, your goal is to survive,” he said. Now, with more than 400 employees, “our goals have changed,” Calamos said. “We use more metrics, we have more stakeholders — public shareholders. It’s more complex and we have more to measure.”

Goal setting at CDW also has evolved, Edwardson said, but for a somewhat different reason. The company has gone from public to private ownership, and a critical concern is meeting the financial demands of key investors while executing a forward-looking strategic plan. At the same time, he said, the fact that CDW is no longer publicly traded has meant that coworkers, many of whom now share in ownership of the company, have more of a personal stake and are taking a greater interest in the company’s performance.

CDW is about to train all of its coworkers – from the executive level down – on EBITDA. “We’re going to measure every month and build it into everyone’s head and give them an understanding of how they can influence it,” Edwardson said.

CDW is currently focused on building its business toward future goals – in some cases goals that are several years away, Edwardson said. Given the nature of its business – technology products and services – key immediate goals revolve around sales and revenue, as well as building operational efficiencies.

“We have a team concept below the corporate level. We’re able to measure productivity at a very granular level, and the lower you go in the company the more granular it gets,” Edwardson said. “If a team doesn’t perform, there are negative results.” Still, given the change to private ownership, the company emphasizes an imperative to look to future goals as well.

At Calamos, which manages $40 billion in assets, the emphasis has been to service clients, provide appropriate return on investment, and look for opportunities to grow the business, particularly in overseas markets. Calamos said the company has moved to a flatter organizational structure from what had become “silos” a few years ago. Compensation is tied to specific goals and performance is “rewarded well,” Calamos said.

In cases where performance repeatedly falls short of goals, “there are consequences,” he added. Still, growth in the investment business tends to come “in spikes,” Calamos said. “It’s important to keep a steady hand.”

– Franklin R. Shuftan