I’ve learned to appreciate the time that falls between Christmas and New Year’s Day. For me, it offers a period of reflection – six days to ponder what has past and plan, as best I can, for what I want to achieve in the year ahead.
Now that I own a small business, those days have taken on even greater significance.
So as I look forward to 2014, I called a former mentor, Charlie Baum, who coached me in the Punch Sulzberger Program at Columbia University. I wanted to chat about business planning for the new year.
Before our chat ever started, he sent me a Power Point slide show. Here are the slides that caught my eye:
Activities vs. results
A common mistake business owners make when setting goals is they often confuse activities with results. Results are measurable. Activities are simply a series of steps needed to achieve those results.
Activities might include: Implementing a system, developing a strategic plan, conducting a training program or even expanding into a new market.
Results might include: Increase revenue by a set percentage, reduce delivery time to a specified target or create a better work environment for employees.
Baum said the question business owners should ask themselves before implementing activities is, “To what end?”
Lose weight vs. feel better
Some goals – like losing weight – are easy to measure. Other goals – like feeling better as a result of that weight loss – are more difficult to quantify.
When setting goals, Baum said, business owners should not favor one over the other. Both types are important to growing a successful business. But when setting “feel better” goals, he said, it’s important to develop a scorecard that indicates progress.
For example: If you want to increase the level of customer satisfaction – a “feel-better” goal, for sure – what measures will you put in place to indicate that you are moving in the right direction? You might survey your customers, but you also might look for a decline in the rate of returned products, or an increase in customer referrals or repeat orders.
The 80/20 rule
In many cases, business owners can obtain 80 percent of a specific goal by focusing on 20 percent of the activities designed to reach that goal.
“Keep it simple,” Baum advised. “A few things can get you a lot of the value. Don’t make it too complicated.”
He offered this general advice for goal setting:
• “Good enough” is OK, particularly early on.
• Get started, learn from experience, and allow the system to evolve. Don’t wait for “perfection.”
• Fewer measures are better than too many.
• Focus quickly on the “make or break” areas.
• Make the process as painless as possible.
As you plan for 2014, David Howell, a mentor with the Service Corps of Retired Executives, says the best place to start is with a review of 2013 results. Look for things that failed as well as things that succeeded – and figure out what lessons can be learned.
One of the most neglected areas for review, he said, involves staff. In other words, do you have the right people on board to help you succeed?
“None of us, at any level in any type of business, can succeed without the people who do the work for us,” Howell said.
“As a small business owner, you have to dedicate your time to educate and motivate and mentor the people who work for you so that they will do what you ask of them in meeting the customers’ needs.”
Glenn Burkins is editor and publisher of Qcitymetro.com, a news site for Charlotte’s African-American community. He is a former Wall Street Journal reporter and Observer business editor.
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