All the business books I love recommend working in 90-day cycles.
It’s enough time to set a reasonably meaty objective and to achieve it, while still doing business as usual at the same time.
The recommendation is that you set between three and seven goals each quarter (and less is more, so three or four is fine for most small businesses). These goals are important projects that will make your business better and are in addition to whatever financial targets you might set for the quarter and your business as usual client work.
These quarterly goals or Rocks should also be moving you along the path to achieving the 12-month goals in your annual business plan. That part is pretty straightforward.
The key to making this way of goal setting become a hugely beneficial part of your business process is to check your own work at the end of each quarter by completing a formal quarterly review.
Here are the issues and questions we work through at FP Advance with each review:
1. Review the previous quarter’s Rocks
- Did we hit all of them? If not, why not?
2. Review the business plan
- How are we progressing against the annual plan?
- What’s going well?
- What’s not?
- Is there any remedial action required?
3. Review management information (MI)
- Did we hit our quarterly turnover target?
- Analyse the profitability, productivity and client selection ratios
- What is the story our MI is telling us?
4. What did we do well this quarter?
5. What could we double down on in the next quarter?
- What is working really well that we should be doing more of if possible, rather than looking for new ideas that may or may not work?
6. What did we learn?
7. What could we do differently moving forward?
8. Set Rocks for the next quarter
Between three and seven goals for the next quarter that:
- will advance us towards our 12-monthly goals in the business plan, or
- represent other projects that are important to help us build an even better business
9. State of the nation update
- Update the team on the results and highlights from the previous quarter
- Update the team on the plans and goals for the next 90 days
Here is some learning from our own experience, and the experience of taking our clients through this process.
It’s imperative that you hit all of your Rocks every quarter. That’s the standard. It’s why they’re called Rocks.
As you first attempt to set Rocks, it’s possible you might actually miss some. That's ok - it’s not a perfect world and it can take a few attempts to realise the weekly focus your Rocks require.
However, this is the point of doing the quarterly review. If you find yourself consistently not achieving your Rocks you’ve got a management and execution problem.
At your quarterly review you might discuss ways to ensure you are all more accountable and delivering on what you said you would do.
It’s usually a weekly meeting issue. Either you are not having your weekly leadership team meetings, or you are not being honest when you note whether Rocks are on track or off track every week. Both of these things are fixable.
Stick to your guns
Don’t change your goals part way through a period. If you find yourself way off track with a Rock and you can see it won’t be hit, then so be it. Leave the Rock as it is and then review why you got so far off track at the end of the quarter.
A lot of businesses will change the goal if they are miles off track, so they never get to the end of the quarter and learn from whatever error they made. This is no good.
Like everything else in running your business, this process is simple, but not always easy. Disciplining yourself to conduct the review at the end of each quarter is the first step. Being honest about what’s working and what’s not is the other key.
As you move closer to the end of the next quarter, I recommend scheduling some time for yourself and the key decision makers in your business to sit down and follow this quarterly review process. It’s powerful stuff.
Let me know how you go.