What a year! We said that at the end of 2020 and as a business owner or executive, you’ve had your second-challenging-year-in-a-row. Finding good staff, dealing with supply chain delays, PPP loans, etc. Things have continued to change; I hope you’ve been able to adapt your business to thrive.
Pandemic or not, it’s the time of year to block out some time for next year’s planning and get your forecasts done. For many of my clients, we have scheduled a 1 or 2-day offsite planning meeting with the senior team. I have another one this week.
At these meetings, we review the current year, noting what did we do well, where we failed or came up short, what we learned, how we are progressing toward our 3 and 10-year targets, what condition our culture is in, where we can improve, what our next big initiatives are, and what the team should look like next year. From this, we come away with a synched plan and goals for the new year.
I love this process. It gets teams fired up and ready for the coming year – which is just around the corner.
I use a somewhat similar process for my own business and personal planning. I don’t set New Year resolutions, but I do set solid goals and plans for next year – broken down by quarter. (I’m not saying this is the best or the only way, but it’s what works for me.)
My process starts in December and then is solidified during the week between Christmas and January 1st. I’ve adopted the following approach from several mentors and high performers I follow.
Review, Reflect, Recognize
I start with a full-year review. I reflect on the good and the bad. What went well? What didn’t? I make a list recognizing all my successes and failures. I document 5-10 bullets of the wins and the losses for the year. I process each, then move forward. This allows me to celebrate the wins and no longer dwell on the failures.
15 years ago, one of the businesses I owned had a really lousy year and the company was suffering. We had a couple of large projects go upside down causing a fairly large loss, we had an unexpected workers’ comp audit bill, and we were dealing with an ongoing sales tax audit. The loss and low sales were causing cash flow problems and wondering how to cover payroll was keeping me up at night. Ultimately, we decided to sell the business. Based on all these factors, we got crushed on the valuation. We sold anyway, and the four shareholders took sizable losses.
That year I got stuck in a failure loop, asking myself How could this have happened? Why me? yada yada. This went on for months until I realized these are not failures but life lessons. One of the biggest lessons of this for me was the importance of using the 13-week cash flow forecast. I started perfecting my approach and have used it ever since.
I also started the practice of recognizing and capturing failures and determining what can be learned. Then, I could intentionally put them behind me, leaving the past in the past. It happened. I learned. I’m moving on.
Revisit, Re-affirm and Revise
After spending this time reflecting, and then turn toward revisiting the “why” of my business. My approaches to business have changed slightly over the years to keep up with the times. (That’s the revise part). But the “why” hasn’t. I want to help businesses and business owners be more successful, make more profit, increase cash flow, and increase their business’s value. (In keeping with that purpose, I added an easy-to-use Business Valuation product this year.)
In business, there are plenty of ups and downs. If your purpose or “why” isn’t solid, you’re going to have problems when things get rough (which they will). I love Elon Musk’s answer when asked what words of encouragement would you give an entrepreneur. He said, “If you need words of encouragement, don’t become an entrepreneur.” I am not certain I completely agree as we all need some encouragement to keep going when the going gets tough, but I also understand his premise. I find that revisiting my “why” helps me push through the tough times.
Realign, Ready, and Record
After the reflection and reaffirming comes a new alignment of goals and readiness for the new year. This includes recording my intentions because research shows that written goals reviewed frequently move the needle. I know that really worked for me this year. Written and reviewed often.
I break my goals into four segments with one big goal and 4 ‘subgoals’ for each with targets set for each quarter related to:
Wealth and Financial
Health
Skills development
Personal Enrichment
Some of my goals are achievement-based (I will do “x” by “y” date), some are habit goals. (I will do “x” every day.)
I then consider some really big goals with firm completion dates. I love Grant Cardone’s idea of 10X goal setting. Set your goal, then multiply by 10. 10X everything. Why can’t a 10-year goal be completed in 1 year? Why not try?
I write the goals down, trying to be as clear as possible. This is the deliverable, this is the deadline. I write down the key motivations and why this goal is important to me, the next steps, and a reward I’ll give myself when I accomplish it.
This yearly process helps me celebrate the progress I’ve made and prepare for the next 12 months. I want to be ready for a super-successful 2022. How about you?