Profit Blog

Jarmo Manninen & Muutosdraiveri Oy


What is the biggest risk in planning a necessary change in the company's performance?

17. maaliskuuta 2025

The performance targets defined in connection with each budgeting of the company include changes in the company's operations in such a way that their implementation is a prerequisite for the company's performance targets to be achieved. If, as a company manager, you do not know what all the activities in the company affect the company's actual performance figures. Then you do not know how changes in the company's performance targets affect the work in the company. Correspondingly, if, as a company supervisor, you do not know what all the activities in your area of ​​responsibility affect the actual performance figures in your area of ​​responsibility. Then you do not know how changes in the performance targets in your area of ​​responsibility affect the work in your area of ​​responsibility in the company. All of the above means that before you can start planning a change in performance in your area of ​​responsibility, you need to know the root causes of why the performance figures in your area of ​​responsibility are the way they are. For example, as a company manager, you need to know the answers to the following questions:

1. How profitable is the company's business as a whole?

2. How profitable is the company's business by product and service?

3. Why are both the company's results and the results by product and service the way they are?

Only after this do you have the basis to define budget goals for your company and to draw up action plans for the changes required to achieve them. All of the above forms the basis for planning the necessary change in results in the company, i.e. you need to know the STARTING SITUATION.


During my working career, I have too often met companies and their managers whose budgeting has been based on the following operating method. These companies have not known the STARTING SITUATION I described above. Budgeting in these companies has taken place in such a way that the company's actual income statement has been taken out first. Next to each number in it, a change figure has been guessed as the target, such that the sum of the change figures has resulted in the company's target result change figure. For the reasons I have explained above, it is no wonder that the management of the companies in these companies has been adrift and the results figures are in line with it. Such companies will never be able to achieve their profit targets with operational management and ignorance of the STARTING SITUATION of profit changes is a very common reason for company bankruptcies. The biggest risk in planning the profit change needed in a company is ignorance of the STARTING SITUATION.

Is the STARTING SITUATION known when planning the profit changes needed in your company?

I encourage you to share this blog post of mine on social media. If you have any suggestions for the topics of the next blog posts, I will gladly accept them.

I hope that you were interested in this matter and that you can continue to be involved.


I have written four books on creating the conditions for the company's financial management, and they are available in well-stocked bookstores and online bookstores in Finland, for example from BoD (Books On Demand) at:






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