I call the last working week in December Board Week because it’s packed with board meetings. These board meetings are often the most important of the year. By virtue of their place on the calendar, everyone in the room is thinking more strategically, less tactically. These meetings set the tone and strategy for the company for the upcoming year.
I’ve assembled a checklist below of top 5 things I’ve seen founders do in and around the end of the year that position their companies for success in the next year.
- An annual post-mortem. What the company accomplished in the last year? What went well? What could the company have done better? This post-mortem is created by the management team with input from the company as a whole. Afterwards, the findings are presented to the board and the company in an all hands.
- Team evaluations. Pick a flavor: peer reviews, 360 degree evaluations or management reviews, annual reviews are essential to honest cultures in startups. Annual reviews are the best time to evaluate compensation, reward the top performers and begin to manage under-performers out of the organization.
- OKR setting. I’m a avid proponent of the OKR (objective and key result) model where the company leadership sets three measurable, quantitative goals for the year. Managers divide those three goals into smaller goals for themselves and so on down the organization. Andy Grove pioneered this at Intel and we used it to great effect at Google. This management technique aligns all the efforts in a company toward the goals.
- The three things we’re worried about. This is a critical part of the checklist. Board members, founders and management team are each worried about issues facing the business. But are they worried about the same issues? Ensuring that each understands the challenges of the other and that the team is prioritizing the same top three concerns grounds communication and focuses the company on the hardest challenges.
- A financial plan for next year including a headcount plan, a sales plan (if applicable) and a forecast for out of cash date and timing of next fundraise. Financial plans are the ambitions of the company codified in numbers. They help with scenario planning, goal setting, company alignment and team measurement. In addition, an options pool plan to ensure the company has enough in its employee stock option pool to continue to hire, retain and reward employees.
For startups, founders and VCs, the end of the year is a good time for introspection, evaluation and communication. Structuring this tasks has helped our companies become more productive. I hope they help your business too. Email me with other suggestions if you have them and I’ll publish them tomorrow.