How Fractional Executives Can Help You Keep Your New Year’s Resolutions

The question looms: What are our goals for next year?  As a Fractional COO, I love the opportunity to step back, bring people into the vision, and get them excited about the future. 

The annual planning process is a great way to use Fractional expertise. Because they have seen many cycles of setting goals – some that failed and some that were achieved -  they will be a good sounding board for your process. If you are having trouble articulating them, ask your Fractional partner to take the first pass as they have experience– but are not explicitly tied to the business. Below, I share some of what I’ve learned in my years as a COO about making the planning process work.

People Like to Win

Being a part of a team that works together and believes in their  direction is one of the greatest pleasures of work. It’s also an underrated aspect of the annual planning process– getting everyone on the same page. Shared goals help drive the behavior that will set your company up for success. But you also need to make sure that their individual  goals are tangible and personal. 

Here’s one thing I have learned: people like to win, whether or not the win is tied to a financial incentive (though that never hurts). So set them up to do it!  Early on in my career I was managing a team of outrageously talented creative directors. They were focused on making the best work. Yet I needed them to have some skin in the game, so I gave each of them a revenue target as part of their personal goals. I was astounded by how effective that was. My brilliant creative directors began to track their client wins in Excel, because they liked to win. And yes, we made our revenue target that year. 

Learn from the Past

Another key element of annual planning is looking at past performance. Did you meet last year’s goals? If so, why or why not? Stack up the past three-to-five  years and look at trends. What percentage increase or decrease did you see in revenue or margins? Were there big surprises? Are there goals you set that never came to pass? Taking the time to map out and compare metrics from the past makes setting next year’s goals easy. If revenues grew but margins declined, then your answer may be to focus on the margins. If you set big goals and didn’t meet them, take a new approach, and maybe, set more realistic goals (remember, people like to win).

Do the Math

Setting big goals is easy. As one  colleague used to say, I can write fiction in Excel as well as in Word. Companies love to set out a grand vision. But if you can’t do the math to get there, you probably won't. Let’s start with revenue. If you want to double your revenue, figure out how many clients that will take, at what deal size. Then look at last year, and how many deals you did. Next up is the sales pipeline. What does your sales funnel look like? 

Identifying the full funnel from contact to close is one of the most valuable exercises I know. What’s your lead-to-proposal ratio? What’s your proposal to win conversion rate? To double the business, you likely need to more than double leads. Where are your leads coming from? Many growing businesses have relied on referrals to get to where they are. Expanding your leads base from referrals is critical for most. How that works is often an exercise in testing, failing, and testing again until you understand where your audience is and what drives them. The sooner you start learning, the better your year is going to be. 

Audacious, but Not Crazy

Your team needs to believe that their goals are achievable. If you have set out a big vision and your team is rolling their eyes, it’s going to be tough. Make sure people have a chance to weigh in, and ask for what they need to hit the goals. My experience is that sales teams are always going to lowball their goals and deliver teams always want to hire. The key is finding the balance between challenging them, and setting them  - and you  - up to fail. Set ranges, clarify each step of the process, and make sure everyone understands the narrative. This is your chance to  get the team’s buy-in. 

One of my fractional clients had been growing quickly  for a few years. In the fall, I suggested that they plan to double the business in the next year. They looked at me like I was crazy. But I could see from their pipeline that demand was strong, and that there was opportunity to adjust pricing. This was actually a realistic goal, even if it felt audacious to them. We looked at all the factors that would be needed to make it happen - people, clients, tools. Once we had built the narrative, they started to get comfortable. We created a plan and they hit it out of the park.

Clear Goals Make Decisions Easy

If you take the time to set out your goals for next year, a lot of other decisions are clear as well. How many people do you need to hire? When do you need to hire them? How are bonuses structured? What is next year’s budget? 

Keep your goals fairly simple - five to eight goals that address both strategy and metrics. Challenge yourself to get them done before the new year. You can recalibrate, but now you have guideposts. You can explain to your team what changed later. If you have more leads than you expected, then you might need to do more hiring, or maybe you need to double down on qualifying those leads. Whatever the outcome, having the shared and documented outcome from the annual planning process means you have a roadmap. 

Kate Swann is a Fractional COO and part of www.thefractionals.net, a collective of fractional executives.