Friday Funnel Focus Blog by EPOCH Sales Management Solutions
Creating a comprehensive plan for goal setting in the new year is a great way to guide your small business towards success. We recommend the use of Gino Wickman’s book, “Traction”, as a guide. Here's a step-by-step plan that includes updating your company vision, setting goals for the year and Q1:
Step 1: Reflect on the Previous Year
Review Achievements and Challenges:
Assess the successes and challenges of the previous year and identify key learnings and areas for improvement. This includes a review of the previous year’s numbers (revenue, profit, gross margin, and other relevant key numbers), and last quarter’s goals (Gino Wickman calls them Rocks). Ask what worked and what did not work? You will want to apply a version of a KISS formula that we learned from Michael Hyatt and Full Focus.
K: What do you want to Keep doing?
I: What do you want to Improve?
S: What do you want Stop doing?
S: What do you want to Start doing?
Step 2: Update Company Vision
Company Vision:
Engage your leadership team to reassess and refine the company's long-term vision and ensure alignment with current market trends and business landscape. In Gino Wickman’s book, he proposes 8 questions. Let’s address four of them now.
What are your Core Values?
Evaluate existing core values and consider if they need updating. Involve employees in discussions to reinforce a shared sense of purpose. In Traction, Gino Wickman offers 4 steps to build Core Values.
- Have each member of your leadership team list three people who, if you could clone them, would lead you to market domination.
- Go over the names and list the characteristics that those people embody. What are the qualities they exemplify? What do they do that puts them on the list? Start with a long list so that you can see all the possibilities.
- Your organization’s core values are somewhere in that long list you’ve just created. Now, narrow it down. In your first edit, circle which ones are truly important, draw a line through the ones that are not, and combine those that are similar. After the first round, you should have the list down to somewhere between five and 15.
- Through group discussion and debate, decide which values really belong and are truly core. Your goal is to get your list down to between three and seven.
What is your Core Focus?
Start by asking your leadership team to write the answers to the two questions below. Once everyone has finished, go around the table and have them share what they’ve written. Then, open up the discussion for debate and talk as a group for as long as you need to.
- Why does your organization exist? What is its purpose, cause or passion?
- What is your organization's niche?
We view this similarly to a “Why You Exist Story?” or What problem do you solve that people will pay money for? and Who are those specific people?
What is your 10-year target?
Where do you want your small business to be a decade from now? This should be a larger than life goal. Think BHAG (Big, Hairy, Audacious Goals) that Jim Collins and Jerry Porras made famous in their book Built to Last: Successful Habits of Visionary Companies. Be crystal clear with your target. Consider many elements of a SMARTER goal when you select your 10 Year Target.
S: Specific
M: Measurable
A: Actionable
R: Risky
T: Timebound (10 Years from now)
E: Exciting
R: Relevant (Fits your Core Values and Core Focus)
What is your three year picture?
Your three year picture includes a picture of what your business looks like three years from now. First, you want to determine the annual revenue and profitability. Second, it should include one or two specific measurables that are telltale signs of the size of organization such as number of clients, large clients and units or widgets produced. Third, you want to include factors such as number and quality of people, added resources, office environment and size, technology needs, product mix and client mix.
After some discussion and debate, the combined results will typically contain 10-20 bullet points that describe what your business will look like. In addition, each person on the leadership team should verbalize his or her vision for their individual role in the business in that time frame. Be sure everyone on the leadership team has the same three year picture.
Step 3: Conduct a Six Factor SWOT Analysis
Six Factor SWOT Analysis:
Evaluate Strengths, Weaknesses, Opportunities, and Threats and use insights to inform goal setting and strategy.
In Chapter 1 of Predictable Prospecting, Marylou Tyler and Jeremy Donovann describe how they developed their Six Factor SWOT Analysis to get the most out of SWOT, the 4P’s of marketing and the Five Forces Framework. The logic they used is as important as the framework. Modify their framework as necessary. Here are some takeaways:
When doing a SWOT analysis many companies brainstorm Strength, Weaknesses, Opportunities and Threats one by one for each of the four categories. This can produce availability bias where some activities may get overemphasized while others get missed. Marylou and Jeremy recommend you build a list based on the 4P’s and a modified Five Forces:
- 4P’s are the marketing Product, Price, Promotion and Place.
- Porter’s Five Forces are:
- Industry competition
- New Entrants
- Power of Suppliers
- Power of Customers
- Threat of Substitutes
By reviewing Strengths, Weaknesses, Opportunities and Threats for each of the following 15 categories, it reduces availability bias and provides a more complete SWOT analysis.
- 4P’s
- Product
- Price
- Promotion
- Place
- Reputation
- Customer
- Partner
- Internal Resources
- Financial
- IP
- Human Capital
- Physical Assets
- External Forces
- Customer Factors
- Competitive Factors
- Bargaining Power of Suppliers
- Trends
- VUCA:Volatile, Uncertain, Complex & Ambiguous Occurrences
When done, assign each item a simple high, medium or low score. Prioritize each SWOT column till you have 3-5 items in each to provide a good picture of your SWOT Analysis. They recommend a quarterly review. For further insight read Chapter One of Predictable Prospecting. You will see an example of how they apply their Six Factor SWOT analysis.
Step 4: Define Annual Goals
SMARTER Goals:
Set Specific, Measurable, Actionable, Risky, Time-bound, Exciting and Relevant goals for the entire year. With your three year picture in mind, consider financial, operational, and growth objectives. Decide on the numbers. What is your annual revenue goal? What is your profit goal? What are the specific measurables? These numbers should be consistent with the three-year picture measurables.
With the three-year picture in mind, discuss, debate, and decide on the three to seven most important priorities that must be completed this year in order for you to be on track for your three-year picture.
Gino Wickmand adds, “Make sure you have a projected budget in place that supports your one-year plan. Many companies set goals for the year with no financial projection to confirm that the plan is even feasible. A budget will force you to confirm that you have all of the resources you need to achieve the plan and that when you achieve the revenue goal, the profit number is realistic. Almost every time a profit goal is first projected, the discussion lowers the number as reality is brought to bear.”
Step 5: Break Down Goals for Q1
Quarterly Objectives:
Break down annual goals into specific quarterly objectives for Q1 and allocate resources and responsibilities accordingly. Gino Wickman refers to these quarterly/90 day goals as Rocks. He developed his concept based on Stephen Covey’s example of filling a jar with rocks, sand and water. The Rocks fit best by placing them in the jar first.
Establishing Rocks
Step 1 List everything that needs to be done in the next 90 days. On average you will have about 10 to 20 things, maybe more.
Step 2: Discuss, debate, and determine the most important priorities for the company in the next 90 days. Make a decision on each one whether to keep it, kill it, or combine it as a company Rock for the quarter. Make as many passes at the list as necessary until you’re down to three to seven.
Step 3: Make sure each objective is clear with a due date, typically the end of the quarter, and has a single owner.
Step 6: Communicate and Align
Communication Plan:
Share the updated vision, core values, and goals with the entire team. Foster a sense of ownership and commitment.
Alignment:
Ensure that each team member understands their role in achieving the set goals. Encourage collaboration and cross-functional support.
Step 7: Establish and Review a Weekly Scorecard
Weekly Scorecard and KPIs
Define relevant KPIs to measure progress towards goals. Regularly track and assess performance with a weekly scorecard.
- The leadership team identifies 5-15 numbers that allow you to have an absolute pulse on the business and the 90 day rocks. List each scorecard item in the left hand column.
- Identify the one person that is responsible for each scorecard item or KPI and list in the second column.
- Determine the weekly goal for each item and place it in the third column.
- Put the date of the beginning of week one in the top of the next column.
- Decide who is responsible for collecting the numbers and updating the scorecard before each weekly meeting. Gino calls them Level 10 meetings.
- Use the scorecard to measure success.
Step 8: Celebrate Success and Learn from Setbacks
Celebrate Achievements:
Acknowledge and celebrate milestones and achievements. Learn from setbacks and use them as opportunities for improvement.
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By following this plan, your small business can establish a clear vision, update core values, and set realistic and actionable goals for the new year and Q1. Regular reviews and adaptability will help ensure that your business stays on track and continues to grow and succeed.
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