March 31st – The Deadline!
In the era I entered the Corporate World, March 31st was a big day. The biggest in the Financial calendar. So to take stock of accounts banks were closed on 1st April. Till today, they are still closed on April, 1. But then, banks I think, get the largest number of holidays. Recently they have added Saturdays to that long list. Wish I had joined a bank! Anyways to get back, all commercial establishments geared up for that big day, and checked their figures for growth over the earlier corresponding financial year. This became the standard operating procedure.
Chase for the Top Line or Gross Billings
Companies chased billings or top line figures. Because companies were ranked based on billings. So each year, top pecking orders or rankings of companies saw some change – the earlier top company retained position, slipped a bit; the No. 3 company shot to No. 1 position and so on. Snakes and Ladders. This was an annual feature. Suddenly one year, a glamorous agency that chased the top position and never achieved it, cause the industry leader was rock solid and heads & shoulders over competition, made a big claim and splash of achieving No.1 status. All leading newspapers carried ads and news articles on this stupendous achievement. The rival No 1 agency did not take it lying down and thus arose a furious controversy. On investigation, it came to light, that the agency with the fresh claim of leadership had actually added the billing figures of another department service which was not related to its core competency.
From Annually to Quarterly
So every year the chase for top billings went on, with March 31st as the grand finish line. Companies raised challenging targets accordingly with an understanding that the figures demanded a hard chase. In order to achieve them, the goal posts were shifted nearer, to every quarter. So quarterly results then became the guidelines for achieving that final elusive target.
Alongside the top line chase, a new realisation hit management. Achievement of targeted annualised figures, were the top lines or total billings. In the chase for the same, many organisations and employees compromised on profits or revenues. So the goals got slightly altered often. Targets became more stringent, taking both into account – top lines and profitability or in some cases, depending on company objectives, just a single parameter to chase.
Valuations and Re-evaluations
Cut to today’s chase with the focus on start-ups and companies in the technology domain. Valuation was the name of the game. Which caused companies, largely in the e commerce space to focus on just one parameter – business acquisition and customers. Huge discounts, freebies, incentives, etc became the name of the game. This was thanks to huge fundings by Angel Investors. The bubble has now come to bursting point, where the investors are becoming impatient and eager for quicker results. The pockets are no longer as deep. So the chase goes on. And the goal posts keep getting shifted. At the end of the day, or rather year, business matters!