Each month in this column I ask a different question to you, the ExitEvent Entrepreneur. Thought provoking questions that are meant to get you to sit back and think. Each month I offer insight into the question, along with common mistakes made by (us) entrepreneurs, and a key take-away for you to think more about. My goal – to increase your self-awareness as an entrepreneur and a leader.
Insight— There are two ways you can build your annual plan moving forward: from the present or from the future. Both of them can work and both of them are in place at companies just like yours around the world. Many entrepreneurs look at where they are today in their business and plan for the next year.
Makes sense right? Yes and no.
Common Mistake made— When you develop your annual plans from the starting line, or in other words, where your business is today, you look forward over the next year and ask yourself realistically what you can accomplish. The problem with this type of planning is that it can lack strategy, and even worse, you might be making decisions based on the glass half-full mentality. Sometimes we simply play the numbers game and set a percent growth rate based on our current capabilities.
- “We can only get so much growth because we are missing two key people from that department.”
- “We are so disorganized now there is no way we could accomplish that goal.”
- “No way our current infrastructure will support that.”
You see, when you begin from today, the starting line, you have the potential to restrict the growth of the business based on the weaknesses that currently exist. The optimist entrepreneur can actually hold back the growth of their company by focusing pessimistically on weak areas that exist in the business There is a different approach, and that is to start with the end in mind, the finish line approach.
Key Take-away— “What does success look like three years from today”? This is a totally different approach than starting your planning from what is currently holding you back (people, processes, infrastructure). By asking yourself to visualize what a successful organization looks like three years out, you can be freed up to design the future you really want, and without the worry of what you are doing wrong today. Try out this process for your annual planning this year:
- Define your 3-5 Key Initiatives that you want to accomplish in the next three years. These must be quantifiable and specific to be effective. Think “X to Y” improvement. In addition, they should take the three years to get accomplished, if you can achieve your key initiative in 1 year, think higher level! Don’t use words or phrases such as “improve” or “try harder” when setting key initiatives, get specific and quantifiable. As an example – don’t say we will improve customer service in 3 years, say we will improve the customer engagement score (or whatever metric or key initiative works for your business) from 62 percent to 96 percent within 3 years.
- Once you have set your three year key initiatives, then focus on setting the right one year goals. Ask yourself, what are the annual goals that will bring me one year closer to achieving these 3-5 (three-year) key initiatives? By planning this way, you build the business on a success picture, and if there are weaknesses in the businesses, then you make it a goal to shore them up. Your weaknesses will need to become strengths to allow you to meet your key initiatives in the future, for you to achieve your success picture you built, and for you to reach your organizations potential. Now that is music to any optimistic entrepreneur’s ears!