The first quarter operations review is one of the highest leverage meetings of the year, as the actions taken as a result of this one meeting have a huge effect on the trajectory of your team – informing the next planning cycle and beyond. The problem is that these meetings can easily fall into the ditch of information regurgitation and smartphone glancing, instead of the crisp, engaged strategy sessions they need to be. Keep in mind:
This may be your last chance to meet your goals and have a year that results in bonuses – not bruises.
You are either the bug or the windshield – you choose.
If you have a typical medium to large organization, you carefully crafted your three-year strategic plan before the end of last year. Sales commitments were in by the end of November and internal budgets tweaked and finalized in December. If you are at a conservative organization, this may have happened by Labor Day. For companies in volatile markets, you’re lucky to have it done by year end.
Remember that no battle plan survives the first shot. When preparing for this first big review meeting, the key word is variance.
Great organizations take the time to map the strategy into measurements and frequently examine the gaps between the plan and the actual results. It is in these gaps, both positive and negative, that the real intelligence lies. This intelligence allows for the real calibration of your strategy — think of it like adjusting your golf swing for the cross wind.
Here’s how to prepare yourself and your team for a Q1 review so that everyone enters prepared and leaves the table with a clear directive.
Before the meeting
Pre-read the data. I am a big fan of pre-reads for these meetings, if only the context data deck. It lets everyone come to the session prepared and with their own opinions formed.
Gather intelligence. After you do the pre-read, take a walk: go to the loading dock and have coffee with the guys to see what they think is going on. Also, talk to the front desk guard, the building maintenance person and call an editor friend at an industry publication. Listen carefully.
The First 20 Minutes
Market metrics. First and foremost, what happened in the market? Demand to see, with externally developed metrics. Start from this unfiltered, external view and work your way inside your operations.
- Which pressures are exerting themselves and what were the outcomes on your market position?
- Are inventory positions within the market growing or shrinking?
- What are your competitors’ financials and positions? What about their key personnel changes?
- What’s included in the market data? Is there a substitute product that your customer is using that is not tracked here? I have seen teams grow sales by 50% and then fall behind the market growth.
Customer metrics. Secondly, ask: what do our customer metrics look like? What are the people that write you checks saying about your service levels, the ease of doing business with you, and the value that you provide? In this day and age, if you are not improving every quarter, you are falling behind.
- Did you ship on time, delight them with the quality, provide the expected experience?
- How is pricing holding up? How do you know?
Commitments. Go over your plan commitments, reminding everyone what was promised and to whom. No reinterpretation allowed here, you need to be straight as an arrow.
For a sales team, this is clearly sales and deal flow from your tracking system. For a product development team, this is product launches and post-launch success. For manufacturing, this is meeting agility and delivery commitments at constantly improving cost and quality levels. For marketing, it is accurately segmenting and forecasting the market and hitting the constantly moving target of customer delight. Ultimately, it comes down to two questions (for you math whizzes, first and second derivatives):
- Are we ahead or behind our plan?
- What is the trajectory?
Interpretation
Preparation and review is just 20% of the activity of a good ops review – the remaining 80% of the effort should be dedicated to developing and executing the action points. Now is the time to go through and tie the cause and the effect together. The senior leader in the room needs to make sure that these discussions are cross functional and inclusive — no one gets to stay silent. The dialogue should examine end-to-end cause and effect — both for what’s working and what isn’t.
What underlies the variances both positive and negative? What shifted? Use as much objective math as you can find.
The two most important questions to answer are:
- Which initiatives are the surprise winners? Why, and how do we get more effect from this positive change?
- What’s just not performing? Why, and how can we mitigate the downside, and perhaps recover the resources for something that can add to our contribution?
There is no middle ground. It’s either a yes, it is working and on plan or it’s not. Make a four box model: one axis is it working – yes/no, and second axis is it driving results – yes/no. Not working and driving results is clearly the hot spot for action.
Define the action items clearly. Write them down and make sure everyone gets a copy. It sounds obvious, but you would be amazed how many times I see multiple sets of cryptic notes being penciled in during these meetings — leaving a trail of confusion in their wake. Make sure that actions are captured publicly with clear scope, a single owner and expected completion dates.
After the meeting
Act fast. The advantage of speed in taking action cannot be overemphasized. Even actions taken quickly will have just a little more than half a year to take hold, and depending on how long-cycle they are, positive impact to the financials could be longer than that. For negative variances, the time is now — you must be decisive.
Ensure accountability. There must be singular ownership and regular reporting until an action item is off the list. Actions owned by more than one person do not get done, period. These mid-course corrections are important to all your stakeholders — your customers will notice, your shareholders will notice, and your management will notice. (Your significant other will also notice and appreciate the bonus that you and the team will receive for a job well done.)
Set a date to update the snapshot. This should happen before the end of Q2 — once Memorial day happens in the US, the cadence of progress begins to move to autopilot. You don’t need to rerun the entire review, just the variances and actions. If you’re on track great, if not, get it done before the end of May!
Get out of the way. If you run your team well, they will get the job done, no need to micromanage. Go out and help land the next big customer instead.
So now it’s your turn.
What do you need to get out of this year’s Q1 review? What variances are you seeing and how will you figure out how to leverage that information?
If you have questions and ideas about conducting a review, I’d love to hear about them. Please drop me an email or put a call on our calendars using this link.
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