We can all agree that 2019 has been a tough year across the board. The economy has been tough on individuals but also and perhaps more so on businesses. A year-end review is necessary and for those of us who may not have access to consultants, it may be useful to have a simple self-assessment method to help you do a year-end review. I urge you to take the exercise seriously and write down everything. 2020 beings a new year but a simple difference in calendar digits will not improve your prospects by any measure. A year-end review simply should help you identify where you are, where you want to go and how to get there.
Identify what went right and wrong
First port of call is to identify where you stand or stood during the year. What did you achieve? What did you fail to achieve? This is somewhat easier to do if you had goals and a plan set out at the beginning of the year. However, even without those, it’s possible to still take stock of your achievements and failures. You need to go into detail here and if you can link the achievement or failure to a specific action you undertook all the better. An example is saying “we increased sales by 40% by adding paid social media adverts to our marketing efforts” or conversely “volumes shrunk by 40% as our client base experienced income compression”. The point is its outcome and reason.
Revisit Mission, vision and values
The Zimbabwean business person needs no education on how much business environment can change in a year. A changing environment may require a changed perspective from you as a business person. As such using the results garnered in the first step we can look at how relevant our guiding principles remain given changes in the environment. As a hypothetical example imports took a drastic knock in our country and as much as incomes also lost purchasing power providing things at low cost became increasingly difficult. As such businesses may find themselves in a situation where availability of a product is more important to the customer than finding it at low cost. Yet the very same business may still have low cost in its guiding values. As things stand in Zimbabwe there is no reason to believe things will change for the better, expect more of the same. You will need to assess if your business can take more of what we have seen and how to realign your business with the circumstances if need be.
Review your metrics
Yes, you will still have to look at the numbers. If numbers scare you may require some outside help to organise the numbers into a format that tells a descriptive story of your business performance. Since the drop of the multi-currency era we have had to do business in a volatile local unit and this presents a bit of a problem. I don’t have enough time to talk about inflation accounting in this article but to make sense of the numbers you will need more than financial data. Given our currency has slid from 2.5 to 16.41 against the US dollar on the official market the financial data will not tell the full story. Use other metrics such as sales volumes, customer headcount (for those in services), new customers, retained customers and so on. If you’re an exporter who earns foreign currency you will still have to deal with the local currency volatility on your supply side. Using multiple metrics allows you to capture the full picture. This will allow you to see clearly how you performed. Many ZSE listed companies reported bumper profits but depressed sales volumes.
Identify intentions
Now that we are done with the backwards-looking part of the review we can look ahead. Firstly what are your intentions for the new year? Of course, staying in business should be there but targets that are clearly defined are the best kind. Perhaps you’re looking at customer growth, improved customer retention, bringing costs down or increasing revenue per customer. Be clear, be concise. You can’t possibly know if you’ve arrived at your destination (or the destination itself for that matter if you don’t name it. So using the metrics identified in the last step you can create a plan with targets for the year to come. Do not ignore qualitative and indirect goals as well. Qualitative goals may be difficult to narrow down such as customer service but may contribute greatly to your bottom line. Indirect measures such as reducing the accident rate in a manufacturing business may not be directly linked to improved performance but they do have an impact.
Focus on future
Having a goal is admirable. Having a plan is essential. You’ve set your goals for the coming year but the devil is in the detail. We’d love to wake up at the end of 2020 to find our businesses have grown or expanded but it seldom happens that way. You will have to live through every day of the year and you need to plan as such. Even large goals are made up of small steps and the idea is to focus on the small parts of the goal as they will eventually add up to the big goals. 52 new customers, for example, breaks down to one customer a week. A week is a manageable time horizon. By breaking down the goals to manageable but sizes you allow yourself the ability scrutinise the efforts that go into achieving the target. A year-end review does not replace your regular review activities but gives you an overview of them.
While we are going through tough times we remain hopeful of better times to come and prepare for them.
