Rock Your Way to 2021 Profits
Updated: Feb 25, 2021
After a most unusual 2020, never in most of our lifetimes has humanity looked with such hope at the changing of a calendar year. While it would be a triumph of hope over reasonable forecasting if a simple calendar change improved our world, at each new year it is natural to get excited about the hope for a better one than the last. We can leverage this hope to focus our businesses into something better.
The Annual Goal
Step one is charting your direction for 2021. Hopefully, you and your team did this at the end of 2020. If not, it isn’t too late. Even before the coronavirus and political instability many businesses weren’t mapping directions. Today many are so busy fighting to see another day, that annual planning is being left behind. This can be deadly.
Some interpret this as a rigid annual budgeting exercise that locks them into a direction for an entire year. It shouldn’t be. As we have seen clearly in 2020, the world changes rapidly, and our organizations need to remain nimble. The result shouldn’t be one that locks you in. Rather it should be one that aligns all team members around making progress toward the mission (if you haven’t defined that yet Read this and let’s talk). Teams that don’t know which way they are going end up not going anywhere.
Teams that don’t know which way they are going end up not going anywhere.
A lesson from our childhood favorite Alice in Wonderland underscores this point well.
Alice: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That Depends a good deal on where you want to get to.
Alice: I don't much care where.
The Cheshire Cat: Then it doesn't much matter which way you go.
Let's not let this be reflective of thoughts or conversations of people on our teams.
This annual plan should fall in line with the purpose and mission of the business and tangibly define what a year of progress toward the organization’s mission would looks like. It should include revenue and profit targets, market share, product launches, headcount, customer satisfaction measurements, and anything you can use to tangibly measure progress toward your mission.
Once the direction for the year is concrete, you’ll need to define your rocks. Rocks are meaningful quarterly goals that track progress toward the annual plan. Humans struggle to consistently focus on a target that is 365 days away so breaking this down into quarterly initiatives can produce much more fruit. If you need to more convincing that this leads to a better way of getting things done check out this video from Stephen Covey on putting the big rocks first.
Rocks should be SMART.
They need to be SMART because you and your team need to be able to understand what success for each rock looks like and how to measure when you’ve gotten there. So, to say, “we’re going to get better at customer service” wouldn’t be specific, measurable, or time bound. But to say, “by February 15th all customers will be cheerfully greeted within 20 seconds of entering any one of our stores” would meet all the SMART criteria.
Be sure you define who is accountable for each rock. This needs to be one person. When more than one person is accountable for a task, no one is accountable. Groups new to setting rocks sometimes look at us questioningly when we say this, but it is very important. The accountable person can delegate some or even most of the action items. But if the rock does not get accomplished on time, that person, and only that person, needs to take full ownership.
Only 3-5 of them
Some management teams get excited about this and end up with a list of all sorts of Rocks that need to be accomplished this quarter. When the focus is on too many things, the focus is on nothing. So force your team to narrow the list down to 3-5 rocks (with three being better than five) and get to work. When you accomplish one you can add another one of your initiatives to the list. You’ll end up accomplishing much more throughout the year than if you tried to tackle ten rocks all at once.
So force your team to narrow the list down to 3-5 rocks (with three being better than five) and get to work.
Becoming disciplined about this will make you much more resilient and profitable no matter what 2021 throws at us. If you want to dive deeper check out a couple of our favorite books that will help you self-implement.
Traction: Get a Grip on Your Business
Mastering the Rockefeller Habits
Or give us a call. We’ve led numerous teams through this annual planning and rock building exercises, and we’d love to help you. It’s fun, leads to profits, and can be done at any time of the year.
Wishing you a Happy (and incredibly full of business value creation) New Year!