It’s December again. The days are getting shorter, the nights are getting longer, and everyone is dazed by the fact that another year is coming to an end. Year in review posts begin flooding social media feeds and inboxes. Seriously, July doesn’t seem that long ago. But time is a runaway train and we’re all just trying to hang on.
Taking the time to step back and look at the big picture can help us realize just how much has happened in the last year. December is a time for reflection.
Why Conduct an Annual Review?
Healthy businesses take inventory of the peaks and valleys that inevitably happen over the course of the year. It’s a revealing exercise. It shows us what we did right. More importantly, it shows us what we did wrong. Not all plans came to fruition. Not all goals were realized. Crystallizing these observations can bring clarity when benchmarking and setting goals for the upcoming year.
The Benefits of an Annual Company Review
Business owners and managers don’t typically struggle when it comes to forecasting the future needs of their companies. Understandably so – planning ahead is a necessary skill when it comes to operating a business. But there is much to be gained by reflection. Looking forward with open eyes is next to impossible without an honest assessment of the past. Keeping an eye on the future is important, but so is evaluating the past. Where you are is not only the starting point of where you want to go, it’s also a direct result of where you’ve been.
I’m not trying to get all Yoda on you (that’s a lie), I’m just trying to zenfully implicate the importance of reflection in managing a business. Many businesses relegate this activity to kitschy self-congratulations and half-baked goals for the new year. This is a missed opportunity. An annual company review is a powerful exercise that can help fine-tune the engines of enterprise. Successful entrepreneurs review metrics, company culture, wins, and losses – emphasizing each with equality.
Businesses that fail to conduct an end-of-year review run the risk of entering the new year with the same broken systems that they’ve been dragging along. In the day-to-day bustle, it’s easy to overlook obvious operational deficiencies. A year-end review can help combat this oversight by stepping back far enough to see the big picture.
Tips for a Productive Annual Business Review
Be Objective & Intentional
Conducting a year-end review is only as useful as you are objective. It’s important to step back from daily, weekly, or even quarterly operations to truly grasp the state of your business. Additionally, it helps to approach the process with the expectation that the purpose of the exercise to make things better. Celebrate the wins, but keep an eye out for shortcomings. This is where opportunities lie.
Ask Thoughtful Questions
Taking the time to adequately prepare for an annual business review requires planning and thoughtfulness. It’s not something you want to wing or gloss over. Asking the right questions is a key component to a successful end-of-year business review. Additionally, it is important to define how you will measure growth. What are your KPIs (key performance indicators)? Some generalized example questions are below. Be sure to get specific. All businesses and industries are unique.
- What strategies provided maximum growth?
- What strategies were an inefficient use of resources?
- What was our biggest accomplishment?
- What was our biggest disappointment?
- How did we deal with setbacks?
- How can we learn from mistakes?
Make a Schedule
An annual review is a project. And like any other business-related project, it must be managed and measured. Shortchanging the process will only serve to minimize the impact. Make it a priority. Allocating sufficient time and energy to improve upon internal and external processes. Doing so is helpful to management, staff, and clients alike.
Acknowledge Victories
Review isn’t a dirty word. The purpose of this exercise is not just to uncover missed opportunities, but to acknowledge victories. Focusing too much on what isn’t working can be a huge setback. Don’t be afraid to pat yourself (and your employees) on the back. Make a list of your biggest achievements for the year. Pay special attention to the people, processes, and strategies that led to these key victories. Figure out how to cultivate and refine what works.
Set Benchmarks Using KPI’s
How will you measure success? Other than revenue, of course. Use Google Analytics, Google Search Console, and other data mining tools to set the expectations for success. Email list growth? Increased social engagement? Organic traffic? These are all good places to look when trying to measure growth and ROI (return on investment). By analyzing this precious data, you can assign a value to the various strategies that led to increases in KPIs. Doing so will provide valuable insight.
Review Last Year’s Goals
Assuming you conducted an annual business audit the year before, it’s a good idea to dust those goals off and measure results. Where did you fall short? Where did you excel? What strategies and tactics were responsible? Answering these questions will help you establish goals for the upcoming year. Make both long and short-term goals. The short-term goals should exist to service the long-term goals. The idea is to keep building and growing, month-over-month, quarter-over-quarter, year-over-year. Momentum is key.
Don’t Forget Company Culture
While it seems more productive to get wrapped up in metrics, data, and KPIs, don’t underestimate company culture. This is the essence of who you are. Ignore it, and you risk losing the very essence of your whole operation. A company that doesn’t intentionally build itself culture runs the risk of that culture developing on its own. Set the values and parameters that define your who, why, and what. Check out our blog on Brand Archetypes for useful tips on defining and developing your brand identity.
Follow Through
The whole process of an annual business review shouldn’t begin in December. That’s just the unveiling. Weekly, monthly, and quarterly meetings can help re-energize and re-organize efforts. Staying up on these processes with regular tune-ups can be the difference between having a business that’s getting by and having a great business.