Focus alone isn’t enough.

If you’re a frequent reader on business improvement, you’ll undoubtedly read something that encourages you to focus. Focus on one niche. Stop multi-tasking and focus. Worry about the numbers – they should be your focus. Focus on the customer or on your employees, or on <insert list of more focus items here>.

OK, so what should I focus on?

Focus alone isn’t enough. You can’t really give the proper amount of dedicated attention to 37 different things. You’re going to have to figure out what YOUR list is and either delegate, skip or outsource the rest. Otherwise, nothing will get the attention it deserves and all aspects of your business are likely to suffer.

In the early days, this is toughest because it might just be you and no one else. So what drives your decision to let something slide a little, be it a day, a week or “forever”?

The long term.

It depends on your long term goals, but most of the small business owners I talk with tend to be 50+. As a result, they are seeing retirement a decade or two out. In most cases, they’re at cruising altitude with their business and have left behind the years of struggle and work to keep it open, then make it profitable and so on. They’re focused on maximizing the value of the business in the time that remains before they decide to sell.

The best have focused on building that company from the outset. “What do I focus on when it’s just me?” was answered for them years ago. Notwithstanding the random short term challenges that we all face now and then, their answer is “What can I do that is most important for my clients while growing the value of my company over the long term?”

The upside is that for a small business, it focuses you on the things that should get and keep your attention even if your plans to sell are 30 to 40 years away.

So your eyes are riveted on the buyout?

Yes, even if it’s decades away.

Building for a buyout is much different for a small company than for one on Wall Street. A privately-held company can focus on becoming more attractive to a buyer via predictable, consistent positive cash flow and profitability – with no stock price to lose sleep over. These things come over the long term through obvious accomplishments that most small businesses strive for: solid products and services, repeat business, great customer care, etc.

Obvious, right? The things that make a company profitable to the owner will eventually be the things that make it attractive to purchase. Part of that attraction is eliminating as much risk as possible from the buyer’s purchase. I don’t mean guaranteeing revenue or profits. I mean by selling a company that is inherently low risk due to the way it operates.

For example, you can reduce risk and build value by building quality, value-packed products, services and systems that produce dependable recurring revenue. You can reduce risk and build value by providing great customer care. Those loyal customers produce recurring sales and provide referrals that lead to new clients. You’ve reduced risk by structuring your company to survive the day you get hit by a bus. The same strategies will protect the company if you decide on short notice to fish Alaska for six months.

Do you feel your business is ready to sell?

When you sell a house, there’s that list of projects you have to get done in order to make it easier to sell. Once you finish the projects that seem essential to selling your home, seller’s remorse sets in a little bit. You wish you had made those improvements years before so that you could have enjoyed them. You enjoy the home a little more in your final days there – in part because of the changes you put off for months or years for whatever reason.

A business often has the same list. They make the business some combination of less risky, easier to run, more profitable, and/or less hassle. Over time, the value of these projects pay for themselves and make the company more attractive to the right buyer.

Making the company more attractive to the right buyer takes a long term view. You and your team will benefit in the meantime.

Would a succession plan save your business?

What happens the day after you’re gone or incapacitated? Do you have a succession plan in place for your business?

While I suspect that most business owners have taken care of the family side of things – i.e., they have a will and/or a trust, etc. Has the business been taken care of?

We’ve talked in the past about how few businesses survive a fire, mostly because they haven’t taken care of the contingency planning necessary to continue operations when the business’ physical facilities have been destroyed.

A succession plan is different from a contingency plan. It provides a plan so that the business survives the death or incapacitation of the hands-on owner-manager, or even hands off owner in a family-owned business.

What happens tomorrow?

Going back to the contingency plan for physical business damage, look back at the bombing of the Oklahoma City Federal Building. Despite the destruction of their facility and the loss of all but one employee on site that day, the credit union was open for business the very next day by virtue of off-site employees and redundant systems.

This required the foresight to discuss and put together a plan, which included off-site backups, training for all involved and an execution plan.

Whether or not you are ready for a physical disaster at your business, the likelihood of tragedy striking the owner is just as important – perhaps more important.

An important question starts the conversation: Do you care if the business outlives you if the worst happens? If you don’t, this seems like something your family, clients and employees should know – though I’m not sure you’d tell them if you feel that way.

If you want the business to outlive you, you have to confront that situation and discuss it with your team and your family. Who takes charge? If you don’t lay this out in advance and have agreement with your family, your death could set in motion a struggle that could destroy the company despite your wishes.

Who takes on your day to day responsibilities? It’s likely that more than one person will have to do so, depending on your role. It needs to be discussed with your executive team and documented for your family, whether they will be hands on or not. Think of it as a living will for your business.

How will things work in the first day, week, month, quarter?

Is there a documented, step-by-step checklist to get critical, keep-things-running work done? Who knows what to do? How do they know? How does everyone know that they (one person or several) have the authority to act?

Oh, they just know” isn’t the answer you want. If you don’t believe me, call your senior people into your office and tell them you are leaving for a 90 day sabbatical in the morning and you will be unavailable by phone or email. Ask them who will run things while you’re gone. Who will be responsible for x, y and z? What duties are they unaware of or untrained for?

Are you comfortable with their answers? Are they?

Can you…

  • Make payroll?
  • File payroll taxes?
  • Deal with property taxes and the state?
  • Pay bills?
  • Get the mail?
  • Write a check?
  • Deposit receipts?
  • Access online payments and transfer them to a bank account?
  • Access your bank accounts and line(s) of credit, if any?

Who pays the power bill that’s due three days after your death or permanent incapacitation? If you’re the only one who can sign a check, how does that work when your picture is in the paper the next day and your vendors (and your bank) keep seeing checks with your name signed on them? Sure, much of this is electronic, but there will be scrutiny on the accounts. What happens if the bank freezes your accounts?

Who takes care of things like that in the short term if you are temporarily incapacitated? Even if unhurt, but simply lost in the woods on a hunting trip for a week, the inability to sign a check or access your business accounts could create a problem.

Smaller things have derailed companies, or killed them, given the wrong timing.

But I don’t trust anyone with that stuff!

If so, you have work to do. Your attorney, accountant and banker can help, but if you still don’t trust anyone, that’s a fundamental problem to tackle. A business with no trusted senior employees is in a really bad spot. I understand that “trusted” doesn’t necessarily mean “trusted with the checkbook”, but you still need a solution if you care about the post-you business.

Are you using your marketing data effectively?

Earlier this year, we discussed planning your marketing, advertising and the run up to promotions and events using a marketing calendar. Today, let’s dive in a little deeper by adding metrics to the equation, specifically – marketing data.

Got income goals?

Presumably you have a budget and as a part of it, income / revenue goals. How certain are you that you’ll hit them this month? How certain are you about hitting them seven months from now?

A few pieces of math might help, but it will require some data collection, or analysis of your existing sales / order data to get there. Keeping it simple, here’s the questions you’ll need to be able to answer:

  • How many new leads did you get last month?
  • Did any of these new leads come from special events or promotions?
  • How many of the new leads who DIDN’T come from special events or promotions have already purchased something?
  • How many of the new leads who DID come from special events or promotions have already purchased something?
  • Was last month’s lead count typical for this month last year?
  • Is your close rate from promotions and events different from other lead sources? If so, why?
  • What’s the average order amount from a lead that comes to you via special promotions and/or events?
  • What’s the average order amount from all other leads?
  • How many leads does it take to close one order, on average? If this varies substantially for leads gained through promotions or events, make note of this.
  • Can you track leads to the source of advertising that brought them in? If so, are the close rate and/or average order amount from any one lead source substantially different from other sources? (high or low)
  • What’s the average number of days needed to close a sale? Is this number of days different for “regular” leads vs leads gained from promotions and/or events?
  • Is the average number of days it takes to close a lead shorter for any particular lead source (or sources)? If any sources stand out as notably longer or shorter, make note of them

That should get you started. Gather this information and we’ll move on to the next step.

Making use of all that work

It will probably seem like a lot of work to gather (and keep gathering) all that info. It is, but solid order and advertising management systems can make it easier. Even if you’re doing it with a yellow pad or an Excel spreadsheet, it’ll be worth it.

Start with the amount of income you have budgeted for next month.

Given the numbers from the prior section, how many sales will you close next month? What about the month after?

If that number is below your budgeted revenue, how many more leads will it take to reach your revenue budget next month?

Given that number, how will you get that number of leads this month so that you can reach your revenue goals in future months, based on your close rate and the number of days it typically takes to close a sale?

Step back

Let’s change tracks for a bit and step back to why we’re doing all of this work and why you might feel a little uncomfortable at this point.

Do you regularly make your monthly revenue goals? Do you know why?

If “regularly” doesn’t describe your business’ achievement of revenue goals, I have more questions: Have you ever made your revenue goals? How did you arrive at them? Why did you make them? Do you make a push every month that sales appear to be coming in below budget? What does “a push” look like? Does that mean you advertise more? Hold more promotions and/or events? Pick up the phone and cold call more than usual?

Does it feel like you’d have a better shot at confidently predicting how next month is going to go, revenue-wise, if you were using your lead, order and marketing data in this way? Would you (and your employees) feel more confident if your achievement of revenue goals was more systematic and less arbitrary? How would it affect how your family feels about your business? Regardless of what retirement means to you, how would a systematic way of “controlling” revenue impact your ability to plan and eventually exit when you decide to retire?

Start simple, but start today.

Fear and Limiting Thoughts

Limiting thoughts had my software company stuck on a sales plateau.

Everything else was going well. Clients loved our software and our support. We could count the number of refunds per year on one hand and still have fingers left over. I was fortunate to have a few minutes with a mentor to discuss the issue. I summarized the situation and asked for his suggestions. He zeroed in on my comment about being able to count the number of refunds on one hand and asked me what seemed like a rather disconnected question.

“What are you afraid of?”

The question surprised me, because I didn’t think I was afraid of much at the time. In the last few years, I’d bought the assets of a now-dead software company, left an exceptionally comfortable job, turned the product and client base around, moved the family and the business to Montana, hired people to grow the company, and the business continued to achieve what I expected of it… except for that rate of sales growth thing. There wasn’t much that I thought I couldn’t do, so I was a little surprised by the question.

He said “Look, you act like that number of refunds is a badge of honor, and it tells me is that you’re afraid to hear ‘No’, or ‘Sorry, this isn’t a good fit for my needs, I want my money back’ from a prospect. You need to go home and sell harder. Stop focusing on refunds.

He wasn’t suggesting that we become that high pressure sales company that no one wants to deal with. Instead, he was suggesting that we take steps to attract and sell to a broader range of people – without limiting ourselves only to those at the top of the ideal prospect list. In other words, we were (perhaps implicitly) trying to sell only to the best possible prospects because we knew they’d buy and never ask for a refund. In retrospect, it seems dumb, but businesses sometimes do dumb stuff that seems like the right thing to do at the time. Put another way, we were taking away prospect’s opportunity to succeed with our product at a time when they were barely beginning to realize what they really needed.

Think of it as the sales equivalent of “the teacher will appear when the student is ready“, yet the teacher is hiding.

Limiting thoughts = Focusing on the wrong thing

In part, we were focused on refunds because there was an investment in time to get these prospects rolled out and working (only to have them decide the software wasn’t for them). In part, it was an ego thing. Our retention rate year over year was in the 90+% range. Refunds were almost unheard of and we were too proud of that.

We started selling harder, looking for those people who were starting to realize they might need what we made, rather than limiting ourselves to the people who needed it or else simply so we could point to a lack of refunds.

That’s the real reason for this discussion: Identifying limiting thoughts that hurt your business.

We saw the refunds-per-year as something to minimize, not realizing what it was doing to our sales. You might have a similar limitation about sales bonuses, for example. Imagine that you pay a one percent bonus for every dollar over $75k in sales/month, and the average monthly sales your salespeople produce is $80k. Yet there’s this one “troublemaker” who always hits $130k, with regular jumps to $140k or $150k. Your bonus structure is capped at $120k and you refuse to pay bonuses for the amounts over $120k in an effort to keep costs down, or because the cap has “always been that way”. You think you’re saving money, but the reality is that you’re doing what I was: Losing sales due to an artificial limitation.

The salesperson who never sees a bonus on sales over $120k is going to stop working when they hit $120k, or take their sales skills where they are appreciated/paid for. How many dollar bills would you put into a machine that returns $100 each time you insert a dollar? I suspect your answer would be “As many as I can”, unless “saving money” is your limiting thought. Bonuses on sales work like that machine.

Is your business limited by fear-based artificial barriers you’ve created?

New project idea? Do this first

A new project idea is always exciting. You think you have a great idea that’s going to take off in your market like gangbusters and you can’t wait to get started. In fact, the gravitational pull of this new bright, shiny object might be so compelling, you might discard all encounters with reality and start without doing any sort of market research, perhaps even setting aside real paid work that has stacked up.

As you might expect, I have another suggestion: use a concept called the minimum viable product (MVP), which is part of process called “Lean Startup“. While this originated in the software world, the process of developing a MVP can be used in ANY business.

Let’s talk about what usually happens to a new project idea.

New project idea development

While the minimum viable product concept took root in the software business, it can be used ANYWHERE.

Let’s take a brief look at the old way. I’ll discuss it in the context of the development of a software project, but this can happen during the development of any new project idea in any business.

The Lean Startup world relates primarily to software startups. Lean Startup recognizes the history of software project development over the decades and that it’s had a high failure rate. This failure rate quite often happened because software development often looks like this:

  • Software people get an idea
  • They determine what they believe to be the perfect solution and fall madly in love with it.
  • They run into a room for two years (or longer) to develop it, and work incredibly hard to produce this perfect solution to fit their idea or problem they’ve identified.
  • After years, they emerge, sweaty and victorious, having completed some portion of this perfect solution

These developers might emerge from their self-imposed development exile having become chest-bumpingly-giddy about their victory, only to find that they built something in a vacuum of customer feedback and the customer finds the solution misses the mark – often by a wide margin. Either it solves a problem the customers don’t care about, or it addresses a problem in a way that makes little sense to the customer, or the customer thinks it’s workable, if only the software people can make these 247 changes to how it works.

Making those 247 changes might take longer than the initial development, might cost more than the initial development, may not have management support, and idea doesn’t do much for a team of software people who became quite misty-eyed over the baby they worked on for the last few years.

Minimum viable product does away with running into a room for two years, and with creating what has universally become recognized as a danger to new and existing businesses: a vacuum of customer feedback.

Test, gather feedback, repeat

The Minimum Viable Product process is a rather efficient, mostly emotionless process for getting to the root of the problem and to the solution that best fits the customer. It looks something like this:

  • Talk to clients.
  • Build what you think they want – but build the smallest possible solution that emerged from the conversation about the problem or idea.
  • Place it in the client’s hands as soon as possible. If you can make this happen in two weeks or less, do so.
  • Watch them use it, ask them how they feel about it, ask them what they like, don’t like, hate, love, etc.
  • Go back to work, leverage their feedback and quickly make changes based on the discussions you had.
  • Repeat as necessary.

During your feedback sessions, ask them if they would pay real money for your solution and let them do so if they say yes. If they won’t pay for what you’ve shown them, you need to reconsider further investment in (or the direction of) the project.

Rather than two years (or some other long, expensive period) of product/service development, you might have two to four weeks invested. It’s better to find out that you’re on the wrong track earlier, rather than later.

Want to learn more about this process? There’s a free course at Udacity that will take you through the process and teach you how to do it yourself. https://www.udacity.com/course/how-to-build-a-startup–ep245 

You don’t have to be a startup to use this process. It works for any project.

Strategic Notepad: Take Ownership

Last week, we talked about the opportunity presented to you when you find yourself helping a client in a stressed, deadline-driven or other pressure-filled situation. You can either create a good memory or a bad one.

We’ve talked about how to make the best of these situations and we’ve talked about the opportunity created and what I experienced with a travel agent. Sometimes people act on your behalf because you have signed a contract with them to do so. For example, I have a client that owns a bed and breakfast and they are “represented” in some fashion by online booking agents, travel review sites (like Trip Advisor) and so on. If a reservation agent treats one of their clients rudely, you can bet it will reflect on the B&B.

Take ownership

Whether you like it or not, anyone who sells for you, advertises for you, reps for you or in any way helps you sell what you do REPRESENTS YOU. Make no mistake, if they do something wrong while working on your behalf, your client will associate you with the situation – and they should. While you can’t always control whether or not these situations occur, you can certainly impact what happens when it manages to roll downhill to you.

Here’s an example of the wrong approach:

When I contacted the car rental company about the situation I was dealing with, this was their response:

Hello Mark, I can understand how this experience would be frustrating for you. Expedia is an independent third party brokerage service that is not affiliated with Enterprise. If given the wrong information such as the address and pickup time, please contact Expedia for further investigation.”

Read that again… “NOT AFFILIATED WITH ENTERPRISE”.

While I have little doubt that this description is accurate from a legal / terms of service perspective, the reality is that I rented a Enterprise car via Expedia. Affiliated or not, anything Expedia does regarding that rental certainly reflects on Enterprise whether they like it or not. Expedia doesn’t own the cars. They’re basically a combination of Google (ie: a search engine) for flights, hotel rooms and cars – and a store that can hook me up with those time and location sensitive assets.

Keep in mind that this was the response vs. something like “Hmm, that’s unfortunate and I apologize that the site sent you to the wrong address. I will reach out to our Expedia vendor rep and make sure the rental location address is corrected.” Most importantly, there was no “Can we get you a car, or have you taken care of that already?” – remember, their business is renting cars, not tweeting. There was STILL a sales opportunity and more importantly, an opportunity to “come to the rescue”. That opportunity was squandered.

While it might seem like I’m busting on the support representative who sent me this message, that’s not the case. Almost certainly, the text of this was approved by management for situations like this. A few minutes later I received the same message intended for someone else. The only difference between the message addressed to me and the second message was that the second one was addressed to “Dan” and mentioned Travelocity rather than Expedia. I politely noted that to the rep so Dan would get his message.

Canned responses are a normal part of customer support. You wouldn’t want reps who handle hundreds of messages per day retyping them, much less authoring them on the fly. The rep did exactly what she was trained to do and in fact, provided the fastest response I received from anyone – but it didn’t help me get a car.

My response to the rep is the real message of this post:

I get that, but do understand that ultimately they represent you and I suspect, do so on millions of bookings per year. Its not solely on them.

If someone sends you thousands of purchases per day, for all intents and purposes, they represent you even if the TOS says otherwise. Take ownership. People are buying your stuff from you, even if someone else takes the money. YOU deliver.

The most serious error of this entire situation was the failure to close the sale and provide a car for me. That’s the business they’re in. NEVER forget what business you’re in, or your clientele might.

Strategic Notepad: Customer Service

Last week, I noted that how you should recover from a client’s poor experience with you is dependent upon the context.

For example, a four hour flight delay is meaningless if you have a six hour layover. It becomes serious if you have a three hour layover before an international flight late in the day, or if the delay causes you to miss an important meeting, a wedding, or a funeral. If the delay causes you to get bumped to a connecting flight later in the day, it might not be a big deal. If it causes you to get bumped to next Saturday…

Context matters a lot.

Serious context is a serious opportunity

When your client is under pressure, deadline, stress or similar, you have an opportunity to create a memory that can last a lifetime. Will that memory be good or bad? Whichever way it goes is likely to be how your relationship with that customer… unless you treat them like a client.

What’s the difference? A customer is a transactional thing. Customers buy and consume “stuff”. Clients are like patients – under your constant (or at least regular) observation and care. Which are you more likely to take better care of, based on that definition? My guess is the client. Despite the definition, it’s all about perception. If you perceive them as an asset to be cared for (and to extract revenue from for a lifetime), you’re likely to treat them differently than you would if you think you might never see them again. Thing is, if you treat them like you’ll never see them again, you might experience that.

The opportunity to save the day / be a hero in your client’s most stressful, pressured, awful moment is a gift – but only if you open it. Sure, you might push COGS a little higher for their transaction. You might take a little heat from your manager if you take the initiative to solve a client’s problem in a slightly unorthodox way – but not if they truly get it because they’ll know you’re protecting the business.

Are you encouraging initiative?

One of the things that seems to be getting being “beaten” out of employees these days is initiative. Evidence? The fact that people are so impressed when someone takes initiative to help them as if they read the Business is Personal playbook. Businesses have produced a generation of workers who fear helping clients in an appropriate manner (when context calls for it) because not adhering to policy and procedure is often considered as a firing offense, even if you acted in the client’s best interest.

Even if you can’t stretch, provide options

Last month, I reserved a car rental with a pickup at 3:00pm. The rental location address provided by the vendor was wrong – fortunately it was wrong by a few blocks (and across the street). However, the rental location closed at 3:00pm and the nearest open branch was about 50 miles away. After waiting on hold for 54 minutes, customer service basically said the whole thing was my fault because I arrived a few minutes after the pickup time. By the time my call came off hold, I was more than an hour’s drive from their only open location and due to my appointment schedule, I was unable to visit that location. I made it clear that I was more or less stranded but my comments were ignored.

How could this have been handled – even if the customer service person couldn’t spend a dime? They could have offered to send someone to pick me up – but at 5pm on a Saturday (which tells you how long I was on the phone), there was no extra staff at the airport to shuttle a car to me. Had they said they checked and couldn’t do that due to a lack of extra staff on duty, I would have appreciated it. They could have asked which hotel I was at and (because they are a travel agency), offered to rebook me at a hotel close to me and have the car delivered the next morning.

Instead, they chose to blame me for the entire situation. They were focused on shifting blame, rather than helping a client juggling business and family travel on a very important family day. I will not forget and neither will your (former?) clients.

Protect your business by protecting your clients.

Strategic Notebook: Marketing Calendar

Are you marketing with intent or by accident? The only thing those two have in common is “ent”. Choose intent.

It’s a massive job?

Like anything you might not have done before, a marketing calendar might seem like a massive job. Don’t let that freeze you.

Big jobs have a way of creating a resistance to getting started – you’re frozen. Big tasks that you feel like you can’t finish in one setting are easy to put off. Next thing you know, it’s next January and you still haven’t gotten started. You can do this a year, quarter or a month at a time, so break it down. If a month seems like too much to bite off at once, start with a week. In fact, start with next week. What will you do with intent next week. The important thing is to start.

If you can’t dedicate an afternoon to it, then start 30 or even 15 minutes at a time. Once you get rolling with a week, look at that first week and figure out what should happen the second week after doing what’s planned for the first week.

Anyone can do a week at a time or take one intentional marketing effort at a time. No matter how slow it goes, get moving and keep moving. Create some marketing momentum.

Beating the blank page

Writing sometimes starts with that first, incredibly tough blank page. Building a marketing calendar isn’t much different. It starts with that first blank month. So where do you start?

What marketing efforts would you make this year even if you were the most disorganized accidental marketer ever? Put that on your calendar.

How do most of your new clients learn about you? Are they walk-ins or drive-bys? Do they find you online? Are they referred? Do they respond to ads in <something>? Rather than doing things to attract these clients accidentally – put the number one client attraction technique / effort on your calendar.

Once you have even one thing on your calendar, it’s easy to move ahead and identify other things you already do. The marketing calendar is your road map to doing these things with intent, doing them with enough lead time that you aren’t tempted to blow them off and getting them executed consistently.

Keep it simple

A marketing calendar might seem like a thing that should be complex, hard to understand and a hassle to implement. While a calendar can have lots of components and it can be multi-layered, it doesn’t have to complicated or a hassle. Focus on one piece at a time and keep things simple until you’re ready to step things up a level.

For example, you might have seen a multiple media, integrated campaign that coordinates email, social media, direct mail, radio, TV and who knows what else – and does so in a sequence over time. It might be tempting to think that if you can’t do that, you shouldn’t bother building a marketing calendar. Don’t use that as an escape hatch. You might get to the point where anything less than that seems like you aren’t even trying. Don’t let that happen. Keep it simple until you get some momentum from executing your calendar and creating something intentionally.

The first goal of a marketing calendar is to start marketing with intent: to work a plan, and stop marketing by accident. Once you have the mechanics in place, you can add additional layers, media and sequences as it makes sense, if it makes sense.

The end game isn’t the end.

What’s all of this for?

We started this discussion by asking if you market with intent or by accident. The goal of this process is to eventually get you to the point where you know what has to be executed each day in order to do the marketing you know you need to do. Intent.

Why’s that important?

When marketing is done consistently and with intent, it creates the conditions that allow you to know exactly what to do to keep growing your business. It creates job security for your people, who will most certainly detect the results of marketing with intent. It will build confidence in you and in the business.

When you work under conditions where you no longer worry about your job or whether your paycheck will clear this week, I think you’ll do better work. That’s good for everyone.

Leading your team to goal setting

Last week, I suggested that you communicate company goals to each team member so that your company-wide goals have context for them in their daily work and with their department’s goals. That’s only part of the job when working with team members and goal setting. The other part is making sure they have a process for identifying what they want to accomplish and how they will break it down and knock off the steps required to make departmental and personal goals happen.

Goal setting training?

You might be looking at that last paragraph and wondering how it is possible that anyone on your team doesn’t already have a process they’re happy with for goal setting. Have you asked them what process they use for identifying, prioritizing and achieving goals? For a business owner, this may not seem possible, but business owners usually have a different worldview, mindset, background (and so on) from at least some of their staff.

To shine a light on that thought: In all the companies I’ve worked for and with since I started post-collegiate work in the early ’80s, not one offered (much less required) goal setting training of any kind to help employees or teams with this critical responsibility.

NOT ONE. How is this possible?

Even if your team members have a goal setting / achievement process they are happy with, do you know how it fits with the process your company uses? What if yours is better? How will learning yours impact their work and life? What if THEIRS is better? How would that change the lives of the entire team and the future of the company?

Yes, training.

The same way that it’s possible for companies to forget to train their people on project management, process management, product management, etc. The assumption at companies that don’t do this may be that “We hired an experienced person, so we expect you to know this.”

That’s great, but if the experienced hire hasn’t been trained, or uses a sloppy, misguided or incomplete method – who pays for that? Even if the method is good, but it’s incompatible with your company’s process, it’s worth discussing.

Are these things a part of your employee on-boarding? Are you showing them where the health insurance forms are and how to file expense reports, but failing to provide them with information (and training) on the company’s preferred goal setting process? Are you spending any time acclimating them to how project management is done at the company?

Are they being trained on the systems and tools your company uses to communicate, manage projects, collect and review feedback, store ideas, plan projects and identify goals? If not, how will they thrive in your system?

People systems are as important as other systems

It’s all too easy to see a need in a company, hire for it, plug someone into a position and turn them loose like a replaceable part. You may feel that your front line people can be handled that way since they aren’t viewed as a strategic hire. I suggest that they are because they are customer-facing, but it’s more than that and goes back to our discussions last week where giving context to company goals is critical to achieving them.

When you take that concept of giving your team context to company goals and apply it to the systems across your entire company, even the front line staffer needs to know your systems and the importance of using them. How else will they determine and achieve their goals? How else will they know the importance of passing along client feedback, much less how to do it?

One of management’s responsibilities is to see that the staff has the systems and training to handle everyday situations. You train them to run the register, but it shouldn’t end there. What are you doing to prepare them to become of strategic value to your company? We see stories on a regular basis where someone started at an entry level position at a large company and somehow managed to end up as the company’s CEO (or as the company’s owner). These things don’t happen by accident.

How you prepare someone to become an integral part of your success is more important as any other training you provide. Train, mentor and guide them – even if you don’t plan for them to become CEO.

Are you communicating company goals?

The natural thought process for small business owners at this time of year is often about goals, i.e.: “How can we do better next year?”

Before you can answer that, you need to decide what “do better” means. What’s your process for thinking that through? If you decide it’s about increasing a high level focus item like profit (rather important), you’re going to have to break it down so you can focus on the actions that produce the increase you’re looking for.

Departmental goals matter too

Once you’ve settled on an area to improve, don’t limit improvement ideas solely to your focus. If you have a staff, you have to get them involved. If you’re big enough to have multiple departments, you have to get them involved. Get them together and take them through the process you went through. For each department or area of the company, what data should they review? For each department or area of the company, what else needs review and discussion? What do they think they can improve upon this year that will have the most significant impact on their area’s quality and speed? Each department needs to understand how achieving their goals will contribute to other departmental goals, and vice-versa. Finally, all departments or areas of the company need to understand how their area’s goals contribute directly to company-wide goals.

Communicate company-wide goals

Most business owners are pretty good at breaking down the achievements required to reach their goals, but a common misstep is to overlook the communication required to make sure that the owner’s company-wide goals have “Why does this matter to me?” context at all levels of the company, for every employee.

This is a critical step for several reasons, most of which are connected to the need to provide employees with context to the company’s goal(s). When discussing the context of the goals with your team, answer these questions from the employee’s perspective: Why should I care? How can a brand-new employee contribute to such a high-level goal? How can an employee who feels their work is “menial” possibly believe their effort is critical enough that it rolls up into the company’s goals? What do I need to hear about my work to make this company goal important? (If they don’t know these things, they won’t likely be bought in to company goals.) My low-level work seems unimportant, so why does this matter to anyone? I watch the clock all day, how could my work be of importance to the company?

Each person, regardless of what they do, needs to understand how their work contributes to the company’s goal(s). They also need to understand what their department’s goals are. They need to be reminded that the most “menial”, seemingly “low level” task is important because that work is often where the company has significant contact with the customer. If they don’t truly understand the importance of what they do – their leader needs to step in and help.

Obvious, but often overlooked

You might be thinking this is all so obvious, but in small, closely-held companies, these things are not commonly communicated, or are not explained to a level that makes them resonant with the staff. If your company goals don’t resonate with the staff, they really aren’t company goals at all. The same goes for departmental goals, which can produce silo’d behavior that leaves people with the impression that the performance of one group or even one person is not all that meaningful to the rest of the company, when the truth is that all of these pieces working in sync are critical to making the entire company’s goals.

Things to consider

What are the three most valuable pieces of information you learned about your clients this year? Of those three, which demand that you leverage them with into the new year? Is any one of them such a competitive advantage?

What is an area of strength in each department that can be leveraged for the entire company? Is this a strength limited to that department, or can that department teach the rest of the company how to gain from it?

When you sit down to look at these things and discuss them, be sure that you’re thinking about and discussing the data, rather than going on gut feel. It’s way too tempting to do this by the seat of the pants, but don’t do it.