So, last week I talked about Initiatives as part of your Annual Plan. These are new things that you are going to do in your business. If you remember my previous series, I talked about inflation and how that added to the cost of operating your business year over year. This includes normal expenses like Utilities and Insurance. More importantly, you will have headcount related changes if you plan to give cost of living increases. This will increase the cost of many benefits including 401k programs but also Worker’s Compensation.
The challenge that you face is that these initiatives must make a meaningful impact on the company. This does not imply that they need to do so immediately. But if you are talking about something that leads to a material impact on the company. Think that it must impact the top or bottom line by 10%. If it doesn’t then it probably is not worth it. Or it might be worth it but not a large enough change to the business to be considered an Initiative. Note that some of these Initiatives can be multi-year, so it may not be a new one each year.
The important thing is that S.M.A.R.T. Goals are set up to monitor the progress of the Initiative across the year. In the past, I have measured these as part of the quarterly earnings review. However, other businesses may want to measure them monthly or even weekly. Levels of performance must be set ahead of time so that course corrections can be made. I know many of have seen the delusions that can happen around this kind of metrics. “We are behind now, but we are just ramping up!” These kind of statements are almost always fictional imaginations. It allows people off the hook for having a critical examination of performance. You can declare missing the target as really meeting the target. This is the worst kind of thing that a Leadership Team can do. It solidifies that the results don’t matter to your employees. You certainly don’t want to send that message.
But even more important about Goals and monitoring is celebrating the success! When you achieve, it is time to make sure that everyone who has contributed is rewarded and recognized. This goes a long way to building great morale within the staff and can lead to even greater achievement in the future.
In any case, whatever happens, it is important that you build your business proactively through these initiatives that can transform your business into the future.
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