How to effectively start the new year?
The end of the year in business is a time for reflection and evaluation. A new year, on the other hand, is a time of new opportunities and an enjoyable time to make significant changes in existing operations. A good start is a factor that determines the success of the business throughout the year. If you effectively summarize the previous year’s successes and failures, analyze your organization’s strengths and weaknesses, set achievable goals and new activities, and plan the budget for the coming year – you won’t waste time on adjustments and strategy changes during the year.
Table of contents
- Summary of the previous year
- Analysis of strengths and weaknesses
- Goals for the new year
- Setting new directions – the Pareto principle
1. Summary of the previous year
The annual business summary will help answer the most important questions – is where we are, what we do and how we do it, who we are as a brand what we expected and aspired to be?
The time of the end of the calendar year is an enjoyable time to reflect and analyze the activities of the company, face all the successes and failures of the previous year, consider whether the decisions and actions taken at that time were right, brought the expected results, but whether some of them should be abandoned or planned again. You should also analyze investments – assess their profitability, summarize marketing activities in terms of the assumptions made earlier – whether the intended results were achieved. In addition, it is worth considering which of the established goals and plans have been achieved, and which have not. Once we have answered this question, let’s consider what the reason for this was. Finding the answer will be the basis for identifying the areas that are most effective, as well as potential areas that need to be improved and that should be subjected to improvement – in short, the strengths and weaknesses of the company.
2. Analysis of strengths and weaknesses
In order to identify them, it is necessary to take a close look at activities and processes, verify their compliance with established standards. Unfortunately, it often happens that everyday life puts to sleep our sensitivity to inconsistencies, shortcomings, inefficiencies, we get used to and accept certain deviations, which is why it is so important to analyze in detail every process taking place in the enterprise.
How to do it. It’s a clever idea to check the results of Key Performance Indicators (KPIs), i.e. the most important indicators by which you can monitor your progress towards previously set goals. Analyzing the indicators will help identify which processes and activities are achieving satisfactory results, are cost-effective and efficient. Another way can be photography of the day, one of the audit tools, which involves tracking and recording all the work elements occurring on the job, along with noting current time. It allows a comprehensive assessment of the efficiency of each process, taking into account the time spent on its various stages and the effects of the actions taken. When conducting a photo of the day, the following steps should be followed:
- Defining the purpose – why do we want to conduct a photo of the day? Has a problem been noticed and we want to look into it? Do we plan to make changes/improvements and want to verify that they are feasible to implement?
- Define the criteria for the selection of the subject – they should be consistent with the purpose of the process
- Choosing the date of observation – the best is the period when the employee performs his standard duties and tasks, that is, outside the peak periods of the year
- Observation – using an observation sheet and a timing tool, observations and notes are made
- Analysis and conclusions – once the data is collected, it is analyzed in detail, resulting in appropriate conclusions and recommendations
3. Goals for the new year
After taking stock of the previous year, it is important to move on to planning activities for the coming year that is beginning. What goals we set for the coming months will have a huge impact on the level of motivation to act, so it is important that the goals are not unrealistic or difficult to achieve or measure. It is worth using the well-known and proven SMART method, which assumes that each goal should be:
- S – specified (specific) – the goal should be simple, specific, precise, answer the question: what do you want to achieve?
- M – measurable – there should be a specific indicator by which the progress related to a given goal can be verified
- A – achievable – the goal should be attainable
- R – relevant – the goal should carry value for the company
- T – time-bound – there should be a specific timeframe within which you want to achieve a given goal
4. Setting new directions – the Pareto principle
Once the goals for the coming year have been set, it is necessary to move on to setting specific actions that will help achieve the given goals and to prioritize them. In this case, the Pareto principle can be used. The author of the Pareto principle, also known as the 20/80 rule, is Vilfredo Pareto – an economist and sociologist who based his theory on the observation that 20% of causes cause 80% of effects. Analyzing data according to the Pareto principle makes it possible to prioritize the factors affecting the issue under study. The prioritization of causes that cause an effect, presented in graphical form, allows the situation to be illustrated intuitively and clearly.
The Eisenhower Matrix, consisting of four parts, can be equally helpful in setting priorities:
- Important and urgent
- Important and non-urgent
- Invalid and urgent
- Non-important and non-urgent
Each of the defined activities should be assigned to the appropriate quadrant. It is worth starting with what is important – these are the priorities. Assign important and urgent activities first (those that need to be completed as soon as possible), but don’t forget about important and non-urgent things – they should come second. Non-important and urgent tasks are usually necessary, but they do not bring us closer to our goal. Therefore, it is not worth spending a lot of time on them – try to complete them as soon as possible. If any activities have been assigned to the last, fourth quarter, you can most likely abandon them, as they do not connect in any way with the pursuit of the goal.
The beginning of a new year is a special period in business, and it is worth taking advantage of it, for example, to implement changes, new solutions, in general to improve the company’s operations. If we want to grow the company, this is a good time to identify inefficient processes and look for new solutions that will help optimize operations.
If you need help analyzing your existing operations and setting a direction for development – order an audit. We will conduct a detailed analysis of operations, help you determine where there is still hidden potential and provide clear guidelines for implementing improvements. Get in touch with us!