August is the preamble to the annual planning season. With September right around the corner, it will soon be time for 2023 planning. Despite pressing matters that might be filling your calendar, the most critical task for any CEO is setting the company vision. So it's vital that you seize this opportunity to pause before embarking on the most important project of the year.
August is your time to take a deep breath.
From its Latin origins, the word “inspire” (inspirare) means to breathe. And just as a swimmer takes a deep breath to increase underwater endurance and strength, I encourage you to breathe deep and find profound inspiration for the planning season and year ahead.
Here are five disciplines to help guide your period of reflection and ignite inspiration.
1. Dream a little (or a Lot)
Even if your business is treading water, now is the time to get out of the deep end. Dreaming is challenging if you can’t picture escaping a difficult situation. But it’s critical that you muster the discipline to see beyond and envision a better future. There can be no progress without your resolve and unwavering faith in what you can accomplish, even in the most challenging times.
If your business is enjoying a great moment, dream bigger. Companies that perform exceptionally well didn’t necessarily create 20-year plans that charted a perfect path to success. Leaders of successful companies need to periodically revise their long-term visions, incorporating the outstanding accomplishments with continuous refinement and new plans that capitalize on the momentum they've built.
Regardless of how much you allow yourself to dream, it's essential that you look inward and ask what you want to accomplish. Let your imagination run free. Remind your inner child not to let anyone else tell you what you can and can't achieve. Find a physical space that will enable you to connect with yourself. Grab a pen and a piece of paper and write, sketch, or graph what you hope to accomplish.
2. Review your three-year vivid vision
After you’ve taken the time to dream, you need to get grounded. Look at (or create!) your company's three-year vivid vision. Whether you are just starting out or are about to start year two or three, it's crucial to contemplate what you're setting out to accomplish in a three-year plan.
If your dreams align with your three-year vivid vision, you'll have an easier time taking the next few steps. If, on the other hand, your dream for the year ahead falls entirely outside the parameters of your vivid vision, you'll need to stop and reflect. Ask yourself, "What has changed to make my dream diverge from the long-term plan I created?" Your dream may be unrealistic if you can't find a good answer. It may be time to root your feet more firmly on the ground.
If things have significantly changed since you created your vivid vision, for better or worse, accept that your three-plan is no longer guiding your company. You still benefit from reviewing the plan, as it previously served as a compass for your company and stakeholders. Your next step is redesigning a strategy for 2023, using the three-year vivid vision as a valuable reference for comparison of where you started and where you have ended up. You’ll need to communicate, "This is what we thought we'd achieve, this is what we missed (or excelled beyond), here’s our course correction (or new path), and this is the reason we diverged (or pivoted)."
3. Evaluate your company's performance
Your goals for 2023 will have to be realistic and achievable to elicit the most extraordinary commitment from you and your team. The basis for determining what is and isn't possible to accomplish is an evaluation of your company's performance. If your company's net profit margin (net profit divided by revenue) went from a positive 5% to a negative 20%, your goal for the coming year might be to raise the net profit margin above 0%. On the contrary, if your company's net profit margin went from 35% to 38% this year, your goal for the year ahead may be to raise your net profit margin from 38% to 40%.
Similarly, if your business is in a delicate cash-flow position, pursuing a growth strategy based on acquisitions or large-scale investments may be your downfall. That same strategy could benefit a company with ample access to capital and a track record of solid growth facing a tight window to secure a leadership position in a new market.
Your company's evaluation should attentively consider your team's feedback. Are your people feeling exhausted or invigorated to give just as much, or more, in the year ahead? Never forget that every future achievement must come from your team's energy and commitment.
4. Assess how the business environment may change
The past is a valuable reference, but it's never a good predictor of the future. As you look to 2023, consider what new risks your company faces that weren't as critical a year ago — AND think about how those might play out. As I look back at 2019, I wonder what percentage of business leaders considered a pandemic a possible risk for 2020. Yet, many studies and documentaries from that year indicated that a crippling pandemic would impact the world before 2025.
The rapidly changing business environment may greatly favor specific industries over others. For instance, consider the boom of the cryptocurrency industry in 2020 and 2021 and the bust this year. Even in a troubled sector, surviving excruciating times opens the door for low-cost acquisitions if you have ample access to capital. And companies developing or employing new technologies have significant room for fast growth, as is the case with the metaverse and blockchain transactions. All this is to say: Take the month of August to recharge, reflect, dream, and look beyond as you identify your most significant opportunities for the year ahead.
Governmental programs often precipitate the growth and downfall of industries. The recent passing of the August 7 bill by the US Senate to approve a $750 billion package, if backed by the House of Representatives and the US president, would significantly accelerate the growth of eco-friendly investments and the downfall of the fossil-fuel industry and its ecosystem. Similarly, the deepening of tensions between the US and its greatest geopolitical rivals during 2022 is unlikely to be reversed soon, accelerating the growth of the cybersecurity industry and the myriad providers of modern hardware, software, and technical services to bring about greater cyber-resilience to businesses.
When CEOs become so engulfed by the day-to-day operation of their businesses that they fail to think outside the box, or beyond the boardroom, their companies become susceptible to doomsday scenarios. To know where to point the sail, you need to study which way the wind is blowing and how the wind patterns are shifting. Identifying trusted sources with different perspectives on how the world is changing for business will better prepare you to identify growth opportunities and mitigate rising risks.
5. Gain perspectives from your trusted advisors
Almost every story about the decline of a once-great country or company emphasizes the leader's responsibility for falling victim to hubris. When CEOs stop listening to trusted advisors — who provide an invaluable perspective on the company's performance and changes in the business environment — they're bound to see only a fraction of what's happened or is likely to happen. Therefore, blind spots often rooted in ego may limit their big and bold plan.
Trusted advisors with diverse perspectives are essential as you navigate the preamble to your planning season. At a minimum, listen closely to members of your Board of Directors and Advisory Board, members of your C-suite, and trusted CEO peers from other industries. If possible, read about what leading economists and political analysts, international relations experts, public-health thought leaders, and tech and innovation gurus are saying about the business environment for the years ahead.
Conclusion
Use these five disciplines as you take a deep breath and seize the month of August to reflect and look ahead to annual planning:
1. Dream a little (or a lot)
2. Review your three-year vivid vision
3. Evaluate your company's performance
4. Assess how the business environment may change
5. Gain perspectives from your trusted advisors