One of the key activities of leaders is to define reality and give hope to those who rely on you. That means coldly and calmly confronting where you stand relative to commitments made and your competitive standing in a rapidly changing world. The business calendar provides a number of checkpoints for just this kind of self-assessment.
We’ve now reached one of those checkpoints—the crossover from June to July which marks the mid-point of the calendar year and, for most companies, the end of the second quarter. Publicly-traded companies are preparing to report their latest financial results, and many privately held firms will be compiling the same figures for their internal use.
It’s an ideal time to take stock of your organization’s performance against annual forecasts and targets—deep enough into the year so that the numbers are undeniably meaningful, but early enough so there’s still time to make any adjustments needed to rescue 2014’s results. It is also time to confront the reality of 2015 and the implications of your year-to-date performance on your long term strategic plan.
The challenge is to treat the mid-year results for what they are—a wake-up call, just like the latest blood pressure and cholesterol readings your physician gives you. You need to analyze the information, figure out precisely what it is telling you about the health of your business, and then act on your conclusions.
Scrutinizing the numbers may reveal that one or more divisions of your company are lagging their commitments. It might be forecast revenue; planned profit; innovations or new product introductions. It’s not enough to ask why—or to elicit a promise from your line of business managers that, come the fall, some fancy footwork or renewed sales initiatives will miraculously produce the kind of hockey-stick growth needed to honor the commitments made by year’s end. Now is the time to take action: to identify the pieces of the machine that have fallen off the track (a delayed product launch, a marketing team in disarray, an expansion initiative that has fallen flat) and figure out what it will take to fix things—now.
Ask yourself and your team members the tough questions that are easy to ignore. Do we have the right people in every leadership position to elicit profitable growth during the next two quarters? Are there bottlenecks in our processes for production, distribution, marketing, or sales that are slowing the path of goods and services to market? Have we allowed the quality of our market-facing services to erode, so that customers who once formed a reliable part of our revenue base have begun to find other options? Are our competitors introducing innovative new solutions and winning our customers? Are there macro trends in technology, customer behavior, or business design that we are missing?
And once you have the answers and understand what needs to be done, make your move. Don’t succumb to the temptation to “Give it a little more time” or “Wait until the fall to see if things turn around on their own.” Experience shows that problems rarely fix themselves. And even if there are underlying trends that might lead to an improvement in the second half, why not give them a little extra power by accelerating the pace right now?
There’s a good reason why businesses have developed the custom of reviewing their results on a quarterly basis. Smart leaders recognize the urgency of acting quickly, before problems snowball—and in today’s fast-paced business arena, a quarter can seem like a lifetime. As the leader, it is your job to make sure your organizational machinery is humming the way it should—or brace yourself for some unpleasant surprises when the cool breezes of autumn begin to blow.