This time each year I do a memorandum of accountability to put my small business through the kind of scrutiny that large businesses do through financial statements and annual reports.
I’ve always been my own toughest critic so a board of directors, even if I had one, would never probe too far beyond a good or bad financial assessment. I call this my memo of accountability because all organizations, no matter their size, should have a vision, goals, metrics and periodic evaluation.
After seven years in business I now think I overshot the quantitative aspect of my founding vision. While I was audacious in how many clients I would serve well in time—who really understands capacity and scale until you start living it?—I got everything about the character of this small consulting business exactly right. A vision should be your North Star helping you navigate all the decisions ahead in your journey. I have never lost my way.
Even an executive in a large international association or a mega corporation could benefit from creating a memo of accountability to conduct the kind of scrutiny of past performance it would be uncomfortable to make public. We have to be our own tough critics. Here are the key features of my memo; you might think of others that would add to your accountability:
Executive summary—just a few paragraphs to characterize the year and its highlights. It’s also a summary judgment that puts the essential truth about your performance upfront and inescapable.
Project recap & evaluation—this overview of the year’s work focuses on two things: outcomes and lessons learned. Each project can be summed up in a succinct paragraph.
Metrics—my favorite is classifying my projects either GG (Good to Great) or PB (Pays the Bills). I try not to take PB projects; life’s too short and money is only so much motivation and justification. Sometimes I will take on a PB project knowing I can turn it into an opportunity to learn something new or experiment in some way. I probably need to add a hybrid classification to my system: PBL(Learning) to recognize what can be gained in even unpromising projects. I have other more traditional metrics at the goal level, like financial targets and number of new and repeat clients. GG and PB helps me stay true to my vision.
Next Year Project Outlook—here I name projects under contract or in the proposal stage, their expected revenue, timetable, if GG or PB, and what the future prospects for that client might be. Before the year begins, I develop a clear sense of what I need to find to have a good year and where peak periods might create capacity problems.
Recap and Review of the Previous Year’s Goals and Business Plan—I analyze my vision outcomes, business model and marketing efforts to determine what adjustments I will need to make to be successful in the upcoming year. Then I tick through the previous year’s goals and assess what I got done and where I fell short and why.
New Year Goals—based on my analysis of past performance and what I will need to have a good year, I set a limited number of goals for the next year.
Ouch, I just did a quick assessment against my 2014 goals. Do businesses experience seven year slumps and get too comfortable with past success? Some questions ahead as I do this year's memo.
See, a memorandum of accountability can deliver that swift kick in the butt you might need for the New Year. Who else can you trust to hold you accountable to your own vision and standards of performance?