The beginning of a New Year is a good time to pause and reflect on the year that has gone by and take stock of the hits and misses – what worked well for your business and what could have been done better. It’s also a time of hopes and aspirations for the future, and an opportunity to decide on goals that will take the business further.
Over the past few years, we’ve had several interactive and highly engaging conversations with entrepreneurs and management of companies on their resolutions for their businesses. In the spirit of the New Year, we’re highlighting the ones discussed most often. Some of them may even sound familiar to your business.
If there’s one thing we keep hearing from entrepreneurs, it’s the yearning for the days when things were simple and uncluttered in their business. There’s no reason for growth to be coupled with complexity.
Rather, as you start a New Year, look at streamlining and simplifying your business processes. If you have a quality product, don’t get swayed by the latest trends in the market. Less can indeed be more. A pipeline of two-dozen new products may seem appealing, but stretches the organization’s focus and bandwidth to a point where none of them can reach their potential.
Simplicity adds efficiency to your operations. Identify what it is that differentiates you and make sure that you are communicating that well, internally and externally. As one entrepreneur put it,“Does it pass the Mom test? Can I effectively explain my business to my mother in a few simple sentences?”
Few areas are more neglected in growing companies than talent development. Everyone is so busy firing on all cylinders and focusing on immediate needs that this crucial organization need is ignored. And it is not noticed until good talent, tired of remaining stagnant, starts exiting for other opportunities. Ensure that you, as the owner or senior management, are spending enough time in nurturing and developing strong talent within your company.
Also, take stock of the talent you have internally, and the aspiration of the organization. Identify the capabilities and skill sets that will be required by the business. Does the team have them? If not, you need to either develop the skill sets of the existing team members or hire new talent.
Remember Kodak? Or Blockbuster Video? How about Borders Book Stores or Orkut? Each one of them had a great run with a proven business model and in several cases, years of history behind them. But as the adage goes, the only thing that is constant is change. Unfortunately, for the companies mentioned above, they were not nimble enough to react to the changes in the environment and consumer habits. Wishing away change is not a winning business strategy. Change will forever be inevitable and the winners of tomorrow will be the ones that adapt to it.
Are the goals you set for your business SMART (Specific, Measurable, Attainable, Realistic and Timely)? Buying growth in the short term may help in attaining quarterly targets, but it is expensive and unsustainable. We’ve seen plenty of examples in the last year of companies that have focused on acquiring customers with scant regard to the cost of servicing them. In the short term, those companies may get a valuation or perception boost, but we all know how that story plays out.
Hindsight is always 20/20, but when you’re working in the present, there are always uncertainties. Will the new product design be well received in the market? Will the change in pricing impact market share? Will the proposed partnership succeed?
Too often, companies fall into indecisiveness or “analysis paralysis” mode, which can be one of the biggest inhibitors of growth.Take calculated risks and utilize opportunities to test, learn and develop as a business.
Do employees across the business know what the vision and goals are? If they did, would they be more productive? Research suggests that businesses, where employees are informed and excited about the companies goals and see how their roles are aligned with the overall vision, have much higher levels of engagement and productivity. Cascading goals, town halls, emails from senior management are all ways to ensure that communication flow is consistent.
The one metric management at all companies should focus on is cash generation. Cash flows generated are used to service debt, provide return to shareholders and re-invest in the business for future growth. Focusing on cash flow by managing operations, inventory levels, vendor and customer payment schedule is crucial towards ensuring long-term sustainability.
What happens when a SMART goal is met? Very often, it is brushed off as “business as usual”. After all, isn’t that what the people are employed to do?
When your team successfully reaches a goal, take a moment to recognize it. Remind them and yourself of why that goal was important for the business. Understanding the big picture of how individual and team goals fit into the larger organization dynamic inspires and motivates team members to continue with the good work.
Conversely, if a SMART goal is not met, take some time with the team to analyze the reason for the miss. Empower people to speak up and communicate what worked and what didn’t.
Write down the values and the qualities that you want your company to be known for. Communicate them throughout the organization so that every single employee is aware of them. Have zero tolerance for any deviation from those values. Remember, it is a slippery slope.
Reputations in the industry take years to build, and one careless, shortsighted action can create a significant dent in them. No amount of short-term gain can justify a compromise on the values of the organization.