Why and how you should do an annual analysis
My wife is a crises counselor. You would think that, by the very nature of the word crises, she would see a continually changing group of clients who were dealing with the occasional crises. Not so. She frequently engages with the same group of folks who lurch from one crises to another. They never learn from their mistakes, continue the same behavior that brought on the original crises, and find themselves in another one. The pattern repeats.
That pattern of behavior – not learning from the past and continuing the same pattern of behavior that brought on the crises – is far more prevalent than one might expect.
As a veteran sales consultant and trainer, I have worked, personally and contractually, with over 500 companies. Many of them were market leaders, continually adapting and growing. They have been, and will probably continue to be, successful companies. On the other hand, there has been a group of, for want of a softer word, mediocre companies who never attain the potential they have.
One of the primary differences between the successful companies (and individuals) and the mediocre, is the ability to learn, change and grow.
One of the primary differences between the successful companies (and individuals) and the mediocre, is the ability to learn, change and grow. Successful companies build that into their cultures and disciplines, while mediocre companies (and individuals) do not. One essential component of that core competency of the discipline of learning from the past. Successful companies and individuals often institutionalize that process in the form of an annual analysis.
Let’s clarify that this is NOT the annual performance review that a supervisor does with the people he/she supervises. The focus is not on some one else. The focus is on us. In a business, that means that the key executives get together in a formal setting and intentionally draw lessons from the past so as to make changes for the future. An individual can do the same thing. Here are some tips to do it well:
- Set aside a formal period of time. Typically, four to eight hours will suffice.
- Immerse yourself, or the team, in the topic. That means that you dedicate time, energy and space to this process. No cell phones allowed, no interruptions accepted. Consider holding it off-site to provide a secure, private environment.
- If you are a group, consider having an outside facilitator run the meeting. This will insure that you stick to the process, as the outsider has no vested interest in the results. Further, it will prevent the defensiveness and pettiness that could manifest in the meeting.
- Stick to the agenda. This is not a strategic planning meeting. It’s a pre-curser to one. The subject is last year, not next year. While it just naturally follows that an analysis of something we could have done better last year leads to a plan for next year, try to keep those conversations to a minimum. Thoroughly exhaust the analysis of last year. Leave the planning for next year to the next meeting.
- Use these questions, in this order, to form the agenda of the meeting:
✅ What were the most important positive results from last year?
✅ What did we do to produce those?
✅ What were the most important negative results from last year?
✅ What did we do to produce those?
- Ultimately, the lessons must come in the form of ‘what did we do well or poorly?’
The microscope has to examine our behavior. If, for example, the conversation uncovers “A major new competitor disrupted our industry,” the follow up question should be, “What could we have done to more effectively deal with that?”
- Look for omissions as well as commissions. In the example above, one comment might have revealed that “we should have anticipated the new technology, and we didn’t.” That’s an omission – something that we should have done but didn’t, as opposed to something that we did that didn’t bring the results we wanted.
- The end result of the annual analysis should take the form of a series of bullets, filling no more than one side of one piece of paper. The bullets should fall under the headings of:
✅ What we did well.
✅ What we should have done and didn’t.
✅ What we did poorly.
Since we think deeply and formally about last year, we institutionalize the process of “Understanding backward.” This process of holding a formal annual analysis clears the air of the past. This frees us to focus on the future, which comes next. There is no need to continually look backward. All our energy, time and money can be directed toward the future.
It is something like our Christian concept of having our sins forgiven. The past has been dealt with, now, we can rise up as a new company, born again to a brighter future.