It’s a new calendar year and we all know what that means – new year’s resolutions.
Only I don’t mean the kind where we say that we’re going to get six pack abs and climb Mt Everest. I mean the kind that your company is starting to set for the next year.
Increase revenue by 30% year over year. Cut costs by 20% year over year. Launch 15 new product lines.
You get the idea.
If you’ve been in this career for more than a few years and you’re able to pay attention to the world around you, you’ve probably seen this in most places you’ve worked. Honestly, we probably start to get a little nervous if we don’t know what the business’ new goals are because that means that we have no idea what we’re working toward (and, therefore, what our KPIs/OKRs/EIEIOs are going to be based on).
There’s nothing wrong with setting new goals at any point in the year. In fact, we should assess where we are and where we want to be multiple times a year, not just at the beginning/end of the year (be it calendar or fiscal). And we should do this both for companies and for ourselves.
The problem is that, much like personal new year’s resolutions, corporate annual goals also tend to be unrealistic for one very specific reason – they add the new goals on top of the old goals.
So, if last year’s goal was “increase revenue x%” and this year’s goal is “decrease costs y%”, a lot of businesses want to continue to do the old goal (increase revenue) because it made the owners/shareholders happy and now they also want to decrease costs – “do more with less”.
That sort of thing doesn’t generally work in the real world. After a while, you run out of inefficiencies to improve.
Instead, we need to start setting realistic priorities for our companies at the strategic level as well as for our departments, operating groups, and even team levels (which will tend to be a mix of strategic and tactical).
This means that we need to come in with the mindset of choosing (at most) a few key areas for improvement while leaving enough slack in our plans that we can respond to change.
I think I just heard an executive scream in pain at both concepts in that last sentence.
Let them scream and do it anyway.
We need to limit the number of things we focus on because we, as people, can only do so much. To quote Sun-tzu “If he [the enemy] sends reinforcements everywhere, he will everywhere be weak.”
The same is true of us. We can’t focus on everything and do it all well. We have to limit the number of things that we work to do (or improve) at any given time. If we try to do too much, we won’t actually accomplish any of our goals and will end up burning out ourselves and our co-workers.
The slack is equally important because if we become so focused on our stated goals that we’re unresponsive to change, we can miss opportunities to improve our operations (or even our bottom line) or we can miss things that can cause a lot of pain to our business/department/team.
Having the time to breathe and think makes it more likely that you can take advantage of the situation and also that you’ll be able to spot it in the first place.
Limit your initiatives, growth areas, and targeted areas of improvement. The more you commit to, the less you’ll actually accomplish. Instead, commit to a few things and reassess throughout the year to see what progress you’ve made and if your plans need to change.
Honestly, getting that six pack and climbing Mt Everest in the next 12 months would be easier than what a lot of companies try to do every year.