What Needs to be Done in Your Business This Year?

January is often the time for planning the year’s strategies and direction.  What needs to be done in your business this year?  Answering that question may seem daunting at first, but there is a structured approach which can be taken.  In this article, review AJC’s methodology for boiling a potentially overwhelming question into actionable answers. 
Added Incentive: If you sign up for our newsletter by February 10, we will send you a free copy of AJC’s Prioritization Matrix Template referenced in Step 3 below!

First: Pre-Work
Using as much data as possible, review the previous year(s) financial trends: gross revenue, net revenue, fixed and variable overhead spend, and if possible – root cause where business came from.  Delegate this work to appropriate team members, if necessary.  Ideally, it will be prepared for presentation in chart format, exported to a slide deck for ease of viewing (Google Sheets/Slides or Excel/PowerPoint both work fine).  It might be beneficial to have the analyst prepare a no-frills report describing the various charts and what the data indicates in a document (Google Docs, Word, etc.) which is distributed to the Leadership team.

Second: Review / Brainstorm
Gather the Leadership Team to review the data.  Team members should have reviewed the presentation and/or report ahead of time and list their questions about the data and/or ideas for how to address improvements in the new year on their own.  The meeting Facilitator will lead the group through the review and capture all questions for follow up and/or ideas which are generated during the review.  After the data review, the Facilitator will lead the group through a brainstorming session where all ideas or opportunities for improvement and/or specific problem areas are discussed and documented.  Again, a simple no-frills list is the best way to capture ideas at this time.

Note:  It is often helpful to perform this exercise as a group with a Facilitator who has “no skin in the game,” so to speak.  That is, in order to maintain total objectivity, the Facilitator should not be biased toward any particular problem or pre-conceived notion of what the data indicates or opportunities should be.

At the end of the meeting, you should have two lists and two documents which should be shared with the team:

1. List of further data analysis required based on questions from group
2. List of brainstormed ideas/opportunities for improvement/problems to solve
3. Document with aligned facts that the financial data review means to the company
4. Document any action items captured during the meeting (action, owner, due date, etc.)

Third: Sleep On It / Follow Up and Prepare Prioritization Matrix
While the rest of the Leadership Team sleeps on the Review / Brainstorm meeting, one or two Analysts follow up with the data analysis required from step #1 above, and another and/or the Facilitator will organize the brainstormed ideas/opportunities into a Prioritization Matrix.  At AJC, we use a FMEA-style matrix with three categories.  These can be modified based on your company’s particular need, but typically look something like this (AJC’s template):

AJC Prioritization Matrix Preview

At this point, only the “Idea/Opportunity/Problem Area” column need be filled out; though the preparer may take an initial stab at the Categories and/or numerical assignments.  Note that the example has “5” values inserted to illustrate how the visual prioritization coloring formulas work in this template.  Also, note that the last column for “Risk Priority” is binomial.  This column is useful in regulated industries such as Biotech, Aerospace, Food Industry, Financial, or other regulated industries where there are particular areas which must be in place/effective irrespective of anything else. 

Fourth: Follow Up Meeting / Prioritization Matrix Completion
After the offline analysis and Prioritization Matrix preparation, the Leadership team reconvenes to review the additional data and any action items captured in the first meeting which are relevant to that group (note: these may have been parsed to separate groups/meetings), and to complete the Prioritization Matrix.  The Facilitator will take the group through each item on the list and help ensure each item is described and categorized appropriately, and that the scaled categories are assigned values which the team agrees upon. 

After that, the template itself should do the work!  Reorder the template based on Priority Number and/or Risk Priority, and voila!  Now you have an objectively prioritized list of items on which your company should improve upon in the new year. 

Fifth: Implement, Implement, Implement
Of course, having a lovely prioritized list of items is just the beginning of realizing improvements and increased profitability.  The next steps are to develop strategies and implementation plans to execute the new ideas or resolve the problems identified.  However, it is always advisable to work on the most valuable issues first; the ones that can bring in more revenue or reduce costs the most such that the business remains as viable and attractive as possible to owners, shareholders, employees, and the world at large.

Read this article and more on AJC’s blog, and sign up for our newsletter online at: http://andreajonesconsulting.com/blog.aspx

Added Incentive: If you sign up for our newsletter by February 10, we will send you a free copy of AJC’s Prioritization Matrix Template!