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This article has been translated from our Spanish edition using AI technologies. Errors can occur due to this process.
The opinions expressed by the entrepreneur's contributors are their own.
What does success mean for you and your company as an entrepreneur and small business owner? Of course, success could simply mean "staying in business" during the pandemic. However, having a vision of success beyond this event is essential.
At a time when social media is bombarding us with information and misinformation, and the pandemic is negatively affecting all of our businesses, it is important to avoid distractions and navigate clearly to success.
As challenging as it sounds, it is possible to survive and even thrive by simplifying and maintaining a clear focus through a page of meaningful information. The key is knowing what information is most important to your success.
Vision of success
What does success mean for you and your company as an entrepreneur and small business owner? Of course, success could simply mean "staying in business" during the pandemic. However, having a vision of success beyond this event is essential and you need to include in that vision the expectations of your key relationships (i.e. customers, creditors, suppliers and partners) and the specific results that indicate that they were fulfilled. We call these indicators critical success factors.
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For example, to measure your success in customer relationship satisfaction, you can view your sales growth percentage, the percentage of your sales from the same customers, or the customer satisfaction index based on a feedback survey. Creditors would be interested in your debt-to-equity ratio, net worth, and creditworthiness. Your suppliers need clear specifications, loyalty, and on-time payments. A supplier satisfaction index that measures supplier requirements can also be obtained through a survey. Ultimately, your partners will be interested in your financial success, which may include your net margin and Economic Value Added (EVA), which measures your overall financial condition.
These are just a few examples to think about. Once you've compiled a list of the critical success factors that are most valuable to you, you have the top of a page of meaningful information.
A side focus
Next, it is important to know the current baseline status of each of the critical success factors. For example, what is the percentage of sales growth, percentage of repeat business, or your current customer satisfaction rating? What is your current leverage ratio or net margin?
The next step is to set sensible goals for each critical success factor. There are three that we recommend: Minimal, Satisfactory, and Excellent. The minimum goal is the acceptable performance threshold. Excellent is the highest level possible, and satisfactory is your next step towards being excellent. These goals can provide the motivation to act. If the outstanding goal is long-term and challenging, you may need to postpone your satisfactory goal several times as you work toward the outstanding goal.
The factors you identified are important, but not equally. First analyze their relative importance, and then assign a weight to each by distributing 100 points on them. The result of this exercise is a list of factors (with weights), the current status and its three target levels. Basically, you've set up your dashboard for success. Your critical success factor in the first column, the relative weight in the second, the status in the third and all three target levels in the fourth, fifth and sixth columns. We call this your focus report.
Review and reflect to achieve success
To keep moving forward, it's important that you set a weekly review rate of your progress in your focus report. Make a formal appointment with yourself and put it on your calendar. And don't cancel it!
Look at the current status of each factor and compare it to the three target levels. Think about what happened during the week, what helped or hindered your progress. Can you identify an action that produced a good result and therefore repeat it? Was there a negative result that requires attention? Stay up to date and how far you are on the way to your goals.
Choose one of the factors for in-depth analysis. This could be a factor with the highest gap or one with the lowest gap of the satisfactory goal. Your decision will depend on the weight you assigned her. One factor can have a large gap, but it may not be as important as another with a small gap. Of course, I would choose the one with a small but highly significant loophole, a factor that is easier to address and improve, and which could lead to extremely beneficial and motivating results.
For the selected factor, you need to develop an action plan for improvement that requires root cause analysis. Refer to the driving literature for guidelines for action planning. An effective method is usually to identify the real problem behind the poor performance, the root causes, the solution strategy, and the action steps to implement the solution strategy.
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Once you have a creative action plan in place, it will become your main focus for the next week. Each additional week offers a new opportunity to review, reflect, learn, and monitor your progress. This learning will affect your adjustments, and your progress will encourage you to stay on track and keep improving.
If you discipline yourself to follow the simple guide in this article, you will be surprised at the benefits you will get. Of course, you want to pass your learning on to others. We recommend that you cascade the process outlined in this article across your company. If you are an entrepreneur with few or hundreds of employees, you can encourage each person to create a unique page that contains the key results for success in the same way that you have done. These key results or critical success factors can come from measuring job goals or measuring expectations from four key relationships: customer, supplier, boss and employer. Regardless of the methodology used, the outcome can be a number of critical success factors for the person who fits into that single page and determines their focus report.
Transfer your own insights from your experience with the concepts in this article with your employees. Imagine all of your employees striving for success based on performance indicators, each of which can make an impact!
With your one-page focus report in hand, you can avoid voices that will distract you and try to get your attention. Use it as a safety shield against information fire and misinformation. Just keep an eye on each page and use it as a clear guide to making your business a success.