At this time of year, most firms are making a huge error in leadership and costing themselves long term, sustainable profits.
This happens when they spend January setting the firm’s yearly goals. It’s understandable because they are often quieter post tax season and they see the second half of the year as when they will have more time to do things for the business.
Unfortunately, this method fosters both poor focus and an unhelpful mindset.
January Goal Setting is counter-productive and costs you and your business
Yearly goals are most often set based on operational effectiveness. The goals are therefore familiar, concrete and actionable. Whilst important they fail to address your long term vision for the business, and can therefore result in a highly reactive business.
This means your business becomes focused on your competition and on seeking market-driven improvements. It becomes a business that is forced to move instead of being a business that proactively positions itself as a Premium Practice.
10 Year Plans Expand Your Experience Exponentially
I can explain this using a recent overseas trip as an example. Last year I travelled to both the Austin (USA) Formula 1 and the Monza (Italy) Formula 1.
The Austin venue is built on a hill, affording viewers exceptional views of the whole track. The Austin track’s design was the highlight of my trip along with the experience of seeing how the Americans ran the weekend. However, everything else was familiar which meant I knew what to expect in regards to culture and language.
Monza, was very different experience. I had to be far more organised for a start. Being out of my depth in a foreign language made my experience way more challenging, and yet more rewarding at the same time. The Monza trip was about navigating a foreign culture, dealing with it differences and communicating very differently in order to unlock the experience of the track, the history and the race. It meant that Monza was true adventure, even if it required much more planning and effort.
Austin was like goal setting in January based on operations. I still had a great experience, but in comparison, it was less rewarding than the Monza trip that required much greater preparation.
How I first realised we needed a 10 Year Plan
The year before we decided to take a strategic approach. It became one of the reasons we realise we needed to be strategic.
In February 2003 we held a planning session that detailed what we wanted to achieve before June in terms of business growth. It revolved around getting more work from existing rather than new clients.
Although we hit our targets targets by June, we realised we had missed a bunch of other important goals such as lowered write-offs, debtor days and systemised special (VAS) work.
That’s when we knew we had to do something different because otherwise our continued growth was going to be frustratingly hard work.
It was like a revelation then to realise we needed an independent third-party to help us not only set our future plan, but to keep us on track with both our goals and our operational efficiencies.
A More Effective Method of Planning
So if yearly goal setting is hurting your potential growth, what should you be doing?
The thing is that firms who set a strategic 5 year plan don’t do this sort of yearly goal planning. Instead they start the year knowing their goals and having activities already planned out. All that is required is to revise the previous year’s activities and results and tweak the upcoming year plan. this ensures that it’s all achievable and that key priorities have not changed.
How to make the most of 2016 if you don’t already have a Five Year Plan in Place
If you’re starting 2016 without a five year plan in place, I’ve compiled this generic list for you to consider for the year. I’ve also added a list of things that I believe are distractions from key growth areas.
Forward Focused Firms should Focus on…
- Strategic Planning (based on future direction not operational influences)
- VAS & what we offer to clients & what skills we have in order to deliver that
- Changing Client Buying Behaviour (TA97)
- Developing your 10 Year Strategy (TA100)
- Improving systems to enable delegation (& free up your best ppl) (TA99)
Don’t get distracted by…
- Licensing (see TA95 What you should know before you consider Licensing)
- Software Automation Tools (TA101)
- Benchmarking and industry best practice (TA102 – operational focus vs strategic focus)
Get Your Five Year Plan
The best option is to have detailed five year plan that is based specifically on your personal goals and your unique business environment.
I work on these for clients at all times of the year, and can deliver them over the phone or in person depending on your requirements.
If you want to get your five year plan right, and want an independent review, I’m currently booking for March. This means you need to take action now to book your spot.
Call me on 0437 808 739