As the new year begins we all set goals, however “a goal without a plan is merely a wish.” Don’t go into 2011 merely wishing for things to change—change happens because we make it happen. One of Steven Covey’s 7 Habits is “start at the end.” Our goals are often “the end” but you cannot stop there. Once you have identified the end, you need a plan to make it happen and then the focus to continually work the plan. We can’t just “hope” that things change. Hope is a drug—we call it “hopium.” It is addictive because sometimes it works and when it does we think that change can happen by just hoping it changes. But like all drugs it creates an illusion of the world that is not sustainable. Live by hopium, die by hopium. To come clean from drug addiction you need a 12 step program, the good news is hopium addiction only requires a 10 step program. Here is where you start:
First step, set your goals for 2011. Your goals should include “big picture” overall results that you want to achieve this year. Goals should include both the financial results of your business and also personal items. At The Fremont Group we preach that there is only one reason for your business to exist—and that reason is to make your life better. Take a sheet of paper and draw a line down the middle. On the left side write down at least five ways that the business is making your life better; on the right side write down at least five ways that the business is making your life worse. Then ask yourself, “How can I build on those things on the left and get rid of those things on the right?” From the answers to this should grow your goals for 2011.
Second step, review your written goals to be sure that you have goals in each of the following categories: (1) cash flow; (2) profit; (3) control of critical financial operating variables; (4) staffing; (5) business assets; (6) cash retention; (7)business liabilities; (8) personal mental and physical health; and (9) your family. Again, the reason your business exists is to make your life better.
Second step, after you have your goals you need to revise your goals. Revise them into a functional format we call SMART. Is your goal specific? Is your goal measurable? Is your goal achievable? Is your goal realistic? Is your goal timely? In other words, at the end of the year will it be clear whether or not you have achieved your goal? Rewrite each goal using the SMART rules.
Third step, once you have SMART goals, you need to share your goals. You need a person that you trust not someone who will simply agree with you but someone who will challenge you. This is often the appropriate function of a consultant or trusted advisor. Show them your goals and ask them to critique each goal by answering each of the SMART questions. Then ask them if there are goals that they feel need to be added to the list or if your goals are comprehensive enough that if achieved, you will have had a successful year? If necessary, revise the goals again.
Fourth step, comes the part where the new year’s resolutions are set up to fail—follow through. Talk is cheap—we aren’t what we talk; we are what we do. You must become committed to your goals. Write down the following phrase ten times—“Success if achieving my goals; failure is not achieving my goals.” You must make this your mantra. You must convince yourself that not achieving the goals that you have established is the definition of failure and that you will get to choose whether or not you are going to succeed or fail in 2011. You have already established that your goals are attainable and reasonable and you have had that verified by a trusted advisor—to succeed you must achieve those goals. Are you going to succeed or fail in 2011?
Fifth step, write each of your goals on a separate sheet. Below each write the months of the year. Under each month write the result that must be achieved at the end of that month for you to achieve success—the accomplishment of your goal. What has to be done each month? Place this sheet in the front of your daytimer. (If you are under 35 and don’t know what a daytimer is, just put the goals in a binder and put them on the top of your desk.) You need to have a constant, visual reminder of what will define success and what will define failure in 2011.
Sixth step, compile those monthly goals and have a meeting at the start of each month where those goals and the monthly progress required is the sole topic. That meeting again must be with someone—it could be your management team, it could be your advisor, it could be your spouse—but it must be with another person. In your monthly goal meeting you evaluate, revise and rededicate. You evaluate the performance of the previous month and determine if the month was a success or a failure. You then revise your goals—up or down—based upon your new reality. You then rededicate yourself to achieving success in the next month.
Seventh step, do a weekly assessment. Look at each of your goals and their monthly achievement breakdown and ask yourself, “what needs to be done this week to be a success?” Set these weekly “goal steps” into your mind and communicate them as much as possible with the people who you need to help you achieve success.
Eighth step, relates to your weekly revision of your cash flow forecast. Although technically it is outside your goal setting process, without cash there is no company and there are no goals and there is no success. Every Monday (or at least weekly at the same time) you must revise your cash flow forecast. If you do not have a cash flow forecasting system that shows you projected cash position at the end of the next six weeks, get one now. Use this weekly snapshot to review your cash flow goals.
Ninth step, remember that “man plans and God laughs.” The purpose of a plan is not to expect it to work—it won’t. Rather it is to clearly identify when you are off track, where you are off track and to alert you to what changes need to be made immediately so that you can appropriately revise your course. I have been told by intelligent people that they no longer make a budget because by February so many things have changed that it is useless for the rest of the year. Planning is a process. The benefit of planning is not when the plan works, it is in identifying when it isn’t going to work (positively or negatively) and being able to make immediate adjustments rather than just watching the train wreck happen.
The tenth and last step is to start your year over every quarter. Redo the entire process every quarter to incorporate what will be the new realities.