Leadership Lesson: If you had only one business New Year’s resolution, what is it and why?

Published in the Phoenix Business Journal on January 18, 2021

Fact: Most business New Year’s resolutions fail. Why? Because there are too many of them. What to do? Discover the most important one and execute it with energy, focus, and your best resources. 

Where are the opportunities? In all areas of your business – large or small. Every function in the business is a candidate. Product and service development, manufacturing/production, human resources, accounting and finance, marketing and sales, and more. Your compass is, “Where is the biggest payoff for the effort expended, short term or long term?”

“New Year's resolutions have always been something to beat me up with by the second week of January. It seems perverse to set yourself up for failure right at the start of the year.” -  Romesh Ranganathan, British comedian 

Common mistakes about resolutions

Beyond having too many goals and not doing any of them well, here are some key errors to watch for:

  1. Error number one – that the only resolution is to increase revenue, especially by too much – even at the cost of profitable revenue. Jim Collins bestselling book, “Great by Choice” notes good examples of highly successful companies that limited growth to 20% per year in favor of outstanding, profitable execution over many years: Southwest Airlines, Microsoft, 
  2. Instead of resolving to cut personnel costs, decide instead to raise profitability – sometimes by hiring better people and increasing training. Fannie Mac, KKR, and Freddie Mae are three companies that top $1M of profits per employee.
  3. Making resolutions from the top-down, invite ideas for new resolutions from the entire staff. Kronos, Inc. (human capital management) is a repeated best company to work for, including the fact that company leaders listen to employees for ideas to propel the company. 93% of Kronos employees love working there – vs. 34% of overall U.S. companies like their employers.
  4. Rather than a free-for-all innovation program for new products and services, mount a concerted effort to develop a killer product for a “gotta have it” customer application. Apple’s iPod and iTunes product execution was memorable.
  5. Outdated accounting and finance applications (and IT structures) are more costly than apparent. What if some well-executed new systems improved cash flow and profitability by 10%. Google/Alphabet, Berkshire-Hathaway, and Microsoft focus on cash generation and have hundreds of billions in cash.
  6. Consider developing, documenting, and training new production processes instead of investing in more production technology. Toyota has done this for years with great success.
  7. Increasing sales without successful, supporting marketing programs is too often a waste of resources. Ask Coca-Cola about the marketing failure of New Coke – and a resulting enormous financial failure.

Choose your New Year’s (and other) resolutions carefully. Pick one and execute it perfectly. Avoid the idea that increasing revenue by as much as possible is the only resolution that matters.

The bottom line

The simple answer to having too many New Year's (or other) resolutions?  Have one that matters most and put all your energy into achieving it. Pick the one that has the greatest payoff – short and long term. And, it can be from any area of your business.

Click here to read this article on the Phoenix Business Journal site.