Go for the Goal
New Year's resolutions about losing weight or organizing the garage may not last more than a few weeks, but it's possible to start the year with plans for your business that will persist for a full 12 months--or even longer.
But like the often-repeated resolution of an out-of-shape person that this year will be different, resolutions for a business go nowhere if they entail recreating reality. Resolutions that push for incremental progress or for simple clarity of thought are the ones that stick, say successful entrepreneurs and business advisors.
"Making resolutions means taking a risk, but the thing we all need to do to stay in business these days is constantly put our companies at risk," says Tom Mears, CEO of Holland Inc., parent company of the Pacific Northwest's Burgerville USA chain. "The only way to grow in 1999 is to keep yourself from becoming complacent and find things you can change about the way you operate."
Five years ago, Mears, who is at the helm of the Vancouver, Washington, family-run company, detected that the old-line burger house was quickly losing ground to the big chains and resolved to turn it around. "Without taking some risks and deciding to make changes, we'd have kept sliding," says Mears, 57. Now the company is on firm footing with sales of $47 million this year.
Of course, there's nothing magical about laying plans in January: Sharp-minded entrepreneurs are always charting the route ahead, no matter what time of year it is. But January, when frosty weather and the post-holiday slowdown leave many businesses quiet, is a fine time to take stock and think deeply about your overall strategy and approach to your business.
So forget about that messy garage or the extra inches in your waistline--for now, at least--and instead consider making some of these 15 resolutions that have worked for your fellow entrepreneurs:
1. Give Your Goals a Reality Check
When Portland, Oregon, chef Paul Wenner, 51, set out in 1985 to infiltrate the world of burgers with his meatless Gardenburger, his goal was broad: Change the world's eating habits. By the beginning of 1986, he had deals with 70 restaurants to carry his creation, which has a base of mushrooms and brown rice instead of soybeans, the more common alternative burger base.
As 1986 dawned, Wenner recalls, "I decided I really wanted to kick all year and get to 200 restaurants--which meant more than doubling our business. And I did it." In fact, he overshot the mark, ending the year with 220 restaurants on his client list. For 1987, he resolved to aim for 400 restaurants--and he beat his goal by 50 restaurants. Today, Gardenburgers are on the menus of more than 40,000 U.S. restaurants.
"One of the keys to success is having an objective you want to reach, but to get there, you need to set a series of [smaller] goals along the way," says Joe Giglierano, a marketing professor at California's San Jose State University. "Each [smaller] goal should stretch you a little more but be reasonable, and as you figure out ways to reach each of them, you move yourself toward your long-term goal."
This strategy works for Wenner in a carrot-and-stick kind of way. "I always have a number out there as my goal, and all year I'm checking my progress to see if I'm on track to hit the goal," Wenner says. "One year, it was 'I'll get into 25 percent of the health-food stores [in the United States],' and I did it. So the next year, the number was 60 percent, and I did that, too. Every year, I've been within 5 percent of what I said I'd do."
It's a simple, timeless technique--but one many entrepreneurs don't find time for. Make the time, and soon you may wind up in the same class as Gardenburger, which is now a $500 million company.
2. Make Your Move
That may be in a literal, geographic sense or in a more abstract way. Is your product right for this particular market or for some other one?
Judi Shepard Missett, 54, was a professional dancer and dance instructor in the Chicago suburbs when she worked up the idea that would become Jazzercise, a dance-based fitness program that is now taught in 19,000 classes every week nationwide. In 1972, three years into the idea's development, she and her husband felt drawn to Southern California. In December of that year, they quit their jobs and headed for San Diego.
Leaving Chicago meant turning her back on the city's theater business, which had kept her busy performing, but Missett quickly realized that in doing so, she'd opened herself up to a major new opportunity. "San Diego was and still is very open to anything that has to do with health and fitness," she says. "So people were very ready for these classes I wanted to teach. They wanted me everywhere in town; it was nothing like Chicago. [Jazzercise] spread like wildfire."
3. Tune in to Your Employees
Is yours the kind of workplace where when one person is swamped, another naturally helps carry the load? Or do your employees keep their heads down and do only the tasks that are theirs? Do your employees expect that for the company to win, they have to lose, or do they think a win-win scenario is possible?
Houda Samaha is a Framingham, Massachusetts, management consultant who specializes in prepping corporate staffs for innovation and change. In her work, she's noticed that too many entrepreneurs and managers assume everybody below them knows what's expected of them, but they never bother to find out if that's really true. By discovering what your workers believe is standard practice, you may find openings for profitable changes, she says.
Samaha notes that early on, FedEx's well-known hub system was full of bugs. Although the company promised overnight delivery, entire shipments were sometimes stalled at the company's Memphis, Tennessee, hub, causing bottlenecks throughout the system. The reason, says Samaha, was that the crucial work of unloading, sorting and reloading packages was being done by wage workers who were paid to put in eight hours, no matter how quickly or slowly the work got done.
"They put in eight hours, and if the planes hadn't all been unloaded, so what? They went home," she says. When executives who wanted to make good on the company's service vows figured out this was the norm, they adopted a new pay policy that changed everything. Now workers are paid for a set number of hours per week even if the work is finished in half the time.
"You can't change people's behavior unless you know what's making them act the way they do," Samaha says. Once you've determined the reason employees perform the way they do, give them a better reason to do something different.
4. Get Caught in the Web
Should you set up a website or not? Marketing professor Giglierano says there's no point in waffling anymore: You must have a presence on the web.
For consumer-oriented firms, it may not yet be an urgent situation, he says, "but for business-to-business operations, it's almost mandatory." So many potential clients are using the World Wide Web to search for vendors now that not having a site of your own is akin to opening a restaurant and not putting a sign out front. "It's the way people do business now," Giglierano says. "If you want to do business, you have to be there."
5. Give It Up
At the end of 1977, Jazzercise's Missett was stuck in the same spot countless entrepreneurs wind up in: By doing it all herself, she was doing herself in. In her case, the physical toll was obvious. She was teaching 25 fitness classes each week (and driving 1,000 miles a week to their various locations), and, as she says, "My body was wasting away from working out that much."
Resolving not to carry the whole load herself, Missett shifted her focus to training fellow dancers to teach Jazzercise classes, effectively launching the franchise program that now numbers nearly 5,000 units.
Although your business may not be sucking the life out of you physically, if you continue to be a control freak as your business grows, you'll probably lose the mental sharpness and energy needed to keep your company successful. If your business is growing, don't be a martyr: Delegate.
6. Know What You Do
Burgerville USA's decline stemmed in large part from trying to run along behind McDonald's and the other big chains and do what they did on a smaller scale. Some aggressive soul-searching at the headquarters in Vancouver, Washington, made Mears realize that the company "couldn't compete directly with those kinds of players and last much longer," he says.
The solution: Do something else. While he didn't jettison the holy hamburger, Mears de-emphasized it somewhat, offering turkey burgers, fish and chips, sliced turkey sandwiches and other items, as well as adding character to the restaurants. They're now dressed in a distinctly '50s look, with black-and-white tile and big dollops of red and chrome in the décor. In keeping with the retro feel, burgers are cooked to order and served hot off the grill instead of from warming racks.
The changes pointed the company forward by looking backward at the things that made the family's first restaurant a local landmark. Dick Barnett, a Beaverton, Oregon, management consultant and author of Reignite Your Business! (Confident Leader Press), worked with Holland Inc. on hatching a strategy to reverse its slump. "What they've done is look at why their doors are open," he says. "Do they want to make a lot of money? Cook a lot of burgers? Sell health food? Or do they really enjoy making food that people like to eat?"
7. Admit That You Don't Know Everything
Your business was founded on a good idea. Don't let the flood of other good ideas that rushed in afterward drown your efforts.
Missett ruefully recalls the period in the mid-1980s when the fitness industry had gone volcanic and a group of consultants urged her to fan out her company's program. Don't just have franchisees with small Jazzercise operations in strip malls, the consultants said; build your own health clubs, and fill them with Jazzercise and other classes, such as children's gymnastics.
"Well, I only have a degree in theater, not an MBA," Missett says, "so I went along with it." After just one fitness club had been built, she realized she should have stuck to her original concept. "Our strength was the dance program, not all these other things that were popping up, so we stopped doing all those other things."
Similarly, at one point, Gardenburger's Wenner realized his product's energy was spread too thin. In the late 1980s, he brought cheese, milk and chicken substitutes under the Gardenburger umbrella. Then, when sales fell short of his expectations, he had a revelation: "If we didn't focus on the familiar round shape of a Gardenburger, this fabulous product of ours was going to get lost in the hustle." So he got rid of everything but the burger line in the early 1990s.
8. Make It Work
In 1993, Burgerville USA was developing a location that Mears says "looked like it would have been wonderful for us." The trouble was, he had resolved at the start of that fiscal year not to open restaurants that wouldn't pull in at least $1 million a year, and the analysis suggested this site would pull in about $900,000. That's not bad, and not far off the mark, "But I had taken a stand and said we just couldn't live that way," he says. "So we added breakfast items and espresso, tweaked the look of the restaurant, and we [generated] twice the volume we'd anticipated-$1.8 million the first year."
The lesson that emerged from that experience, he says, was if you know what you want, don't back off.
9. Play the Margins
It's common practice to check in periodically with major clients and verify that your firm is still on their minds, treating them right and deserving of their business. But Giglierano says an entrepreneur who wants to see sales rise will resolve to do the same with smaller and even marginal customers.
"Some of these small customers have probably remained small because you aren't calling on them enough," says Giglierano. They want to be treated like important clients, not like also-rans. "If they saw somebody from your company more often, they would have increased their orders."
These small customers may be on the verge of major growth and could take you up with them. But how will you know that if you only pay attention to the heavy-hitters?
10. Relive Your Failures
The beginning of the year offers a clean slate, a chance to put problems behind you and move forward. Samaha suggests a wiser way of looking at things might be to put any failings of the past year in the middle of the table and let everybody take a long, painful look at them.
"I'm not talking about a day of finger-pointing and cutting off heads," Samaha says. "I'm talking about doing a post-mortem in a learning environment, where mistakes are valuable learning tools, just as successes are."
11. Pay the People Who Carry the Load
Mears says the smartest part of his company's attempt to reinvent itself and curb its losses was eliminating a level of bureaucracy: district managers. "We want each restaurant manager to be the general manager of their restaurant and the most important person in the company," he says. Toward that end, the company established a lucrative performance-based bonus program for the managers of its 37 restaurants.
The transition from being closely supervised to having a lot of leeway has been tough for some of the managers, but Mears says within a few years, he expects to see it pay off in the form of higher-performing restaurants throughout the chain. "If this transformation we're putting ourselves through is going to work, the restaurant managers are the ones who are going to make it happen," he says, "and they'll get part of the [monetary] results."
12. Start a New Company Every Year
Barnett and his partner, Bill Kutz, dismantle their Beaverton, Oregon, management consulting company, Barnett & Kutz Inc., every December and start fresh in January. They don't draw up new articles of incorporation or go through other formalities wastefully, but they act as if the company has shut down and they're starting from scratch. "We question everything, down to whether we still want to be partners," Barnett says.
Their aim is to underscore the idea that change can happen and that nothing about a company is set in stone. "The real outcome is that you find you've been dragging along baggage you really don't need," Barnett says. "So you just set that stuff aside and move on."
Three years ago, the pair set their sights on the speaking circuit, believing their future lay in Barnett making the rounds of association meetings and other speaking engagements, spreading the word about their style of corporate management. By mid-1998, both partners realized the speeches weren't getting them where they wanted to be. So their resolution for 1999 is to find a new way to disseminate their ideas.
"We don't want to stick to something just because neither of us is willing to stop doing it," Barnett says. "We'll never get off the plateau and start climbing again that way."
13. Go Back to School
Continuing education, innovation training and other self-improvement programs are good not only for employees, but also for the boss, says Richard Tyler, a Houston management consultant and author of Smart Business Strategies (Power Publishing).
Continuing your education keeps you stimulated and gives you vital business information, Tyler says, but he sees it as an unacknowledged management skill as well. "When your employees start to think they know more than you do about your business, the first thing they lose is respect for you, and the second thing they lose is productivity," he says.
14. Pick One Long Shot and Ride It Home
Although Wenner's Gardenburger company has grown explosively, it's still tiny in the eyes of the corporate world. That's why Jay Leno, Tom Brokaw, The New York Times and others made hay with the fact that Gardenburger was one of the advertisers on the final episode of "Seinfeld." The spot cost about $1.6 million, but Wenner confidently estimates the payoff was worth more than $2 million in publicity. Says Wenner, "When our marketing vice president [got the idea], everybody wondered, 'What if we spend all that money and it doesn't work?' But I'm an entrepreneur, and to be an entrepreneur, you have to dream big."
15. Ask Your Employees What Your New Year's Resolutions Should Be
It's a more active form of the open-door policy that many employees assume is just a policy, not a real opportunity for them to open up to you. Samaha advises entrepreneurs to ask each of their employees to submit one idea they have for improving any part of the operation, no matter how small.
"The employees see up close where things are bumpy and where they're smooth," she says. "If they're given permission, and even an invitation, to come forward with their opinions, they can point out all kinds of opportunities that you might miss on your own."
Why not make it a New Year's tradition? At the holiday party or on the last workday of the year, make a big production out of getting each person to say what they'd do if they had the power to change one thing about your company. And then publicly resolve to follow through on five of the best ideas. As everyone who's ever tried to lose weight in January knows, there's no better incentive to following through on a resolution than making the vow public.
When making your New Year's resolutions, don't forget about the Y2K bug--and don't think it won't affect you. How do you keep it from wreaking havoc on your business? Check out next month's Entrepreneur, where we'll tell you all you need to know to zap that bug.
Dennis Rodkin is a Highland Park, Illinois, writer whose longest-lived resolution lasted until February 1.