If you leave your quarterly planning session with priorities like these, you may have a problem on your hands:
- Increase sales
- Decrease expenses
- Improve delivery times
- Write employee handbook
When your executive team isn’t clear how we will measure each quarterly priority (rock), there’s no way your front-line staff will be able to effectively mobilize their efforts to accomplish that priority.
So, what do we do instead?
First, differentiate between goals and priorities. Often priorities will have numerical goals attached, but let’s not mistake one for the other. A goal is sometimes called a metric or a key performance indicator (KPI). What’s our revenue target? Margin? Cash on hand? Etc. Our example above about increasing sales and decreasing expenses fall into the goal area. Even so, they’re not specific enough. You’ll want a revenue target in dollars, not in a percentage increase (even if you have to wait until the books close on a quarter to publish the actual target for the next quarter). Goals are simply numbers, with no detail at all about how we’re going to do that. If you simply tell the sales team to increase revenue by $1MM without any further direction, you can imagine all the things that could go wrong. Rampant discounting, promises of unrealistic deadlines, pushing high-ticket items when your customer would be better served by a lower priced item, damaging trust, etc.
All of these are addressed by setting priorities, distinct from goals. A priority sets out what we’re going to do. It has to be under our control and have a specific measurable outcome attached.
For each priority (No more than 5 per quarter. 3 is better), ask the question, “When we sit in this room 3 months from now and ask, ‘How did we do?’ how will we know how to answer?” If you can write down an answer every in the room is clear about, you’re in good shape. If not, your staff will surely think to themselves (if not complain in the lunchroom), “Here we go again. Rah rah executives.”
For example, a quarterly priority could be “Facebook Ad Experiment” where we specify not only who’s heading it up, but which customers and products/services we’re testing, and how we’ll know the results of the experiment (By when will we have the data for a go/no go decision on further Facebook ads?).
If you were planning to open another location, don’t use: “Identify the site for the new location” because no one will know for sure if the site has been identified. Much better would be: “Accepted lease offer on new location site.” In a future quarter, you’ll want to open that new location. Does that mean you have the keys? Does it mean you have the new sign up? The build-out done? Or does it mean fully staffed and doors open to the public?
Once you’re clear on your priorities, publish a dashboard where everyone can see it and make sure its being updated at least weekly. Your weekly executive team meeting is a good deadline for the dashboard updates. If that’s not working, you might need to Cancel Your Weekly Meeting.