As the beginning of a new year dawns, many of us are filled with a sense of mystery, excitement and hope at what the new year may bring us. This is a great time to reflect on your business’s progress over the past year and think about how you want your business to develop in the future. In fact, your company should have new year’s resolutions. Constantly setting goals and objectives is symbolic of good businesses everywhere, and here’s why:
- They focus your attention towards where you want your company to go, how you want it to develop and what you want to accomplish as a team
- Concrete goals provide focus and stability amidst a busy, fast-paced year
If your company is anything like other small and medium-sized businesses, your employees are both your greatest line-item expense and your most valuable asset. What this means is that your company’s productivity and profitability largely depend on the optimal performance of your employees. Since most small and medium-sized businesses struggle to compete against large companies when it comes to technology, financial resources and physical infrastructure, the ability to effectively leverage the skills of your employees is even more critical. In order to survive in the marketplace, businesses have to find better ways to boost productivity and cohesion than their larger counterparts.
In a recent study, it was discovered that a strong correlation existed between a company’s financial performance and an effective goal-setting process. The study revealed that the companies who experienced this the most were those whose employees felt fairly compensated for their efforts and clearly understood how their work connects to and serves both the short- and long-term goals of the company. As a result, these findings also highlight the importance of effectively setting and closely aligning employee and business goals (like new year’s resolutions) to drive your company’s success.
This happens in three ways:
1. Increased operating margins
When employees clearly understand how their work connects to and serves the company goals, they become more engaged in their work. Once your employees make a connection between how their work can directly impact the success of the company, they are more driven to find ways to work smarter and more efficiently. The increase in employee productivity leads to a boost in your operating margins and hence the profitability of your company.
2. Faster implementation of company strategy
Tighter goal alignment and visibility means your management team is better able to allocate resources across various projects, thus implementing company strategy more efficiently. By highlighting areas of redundancy, your company’s overall efficiency increases by ensuring that employees are not duplicating the efforts of others. Goal alignment also accounts for stronger leadership by allowing managers to clearly understand their responsibilities, eliminate redundancies and focus their staff on the company’s more important goals.
3. Reduced turnover
Studies have shown that when a company has a large number of dissatisfied employees, it experiences greater absenteeism, lower productivity rates and an employee turnover that is 51% higher than other companies who don’t. However, there is a remedy for this. Firstly, clear goal alignment helps boost employee ownership in your company’s ultimate success. Lastly, goal alignment enables you to establish a pay-for-performance culture that provides the foundation for closely linking reward systems to individual and team performances.
So, you see, it is not only individuals that need to have new year’s resolutions, but companies should also be setting new year’s resolutions that align with the overall company vision, mission and values. Check out some of these examples of company new year’s resolutions and think about what your’s will be.