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Don't let a bad quarter derail your fiscal year--or your motivation.
In an ideal world, all of you have had an amazing Q2 despite COVID-19, and this post is completely irrelevant.
In an actual world, I know some of you are struggling with a decline in sales and/or profitability. One bad quarter is exactly that: one bad quarter. If you're smart about your planning and recovery, the past 90 days can be a blip on the radar and not the start of a downward trend.
At the end of last year, I had an annual meeting with an EOS (Entrepreneurial Operating System) client who had a terrible fourth quarter. Every important metric in the business had gone down the tubes in just 90 days. When the team saw how bad things had gotten, they were despondent.
As their EOS Implementer, it was my job to help them. First, we had to figure out what the hell was going on and make a plan to fix it! Second, the team had to mentally reset, adjust their expectations, and be ready to start the year fresh.
EOS has several tools built into its meeting structure to help tackle this kind of problem—you just have to know how to use them.
Identify the root of the problem
The team knew their numbers were not great long before the annual meeting. The data was there, week after week. So why wait until the meeting to figure out what went wrong? If you’re in this situation, connect with your Implementer and any partners before your next session. Use the EOS Model to examine the 6 key components of your business and identify the weak links. Then, IDS (Identify/Discuss/Solve) the issues that come up.
Get inside the numbers
A bad quarter will impact the next one or two quarters, especially if your business does significant revenue in presales . Use your data to set expectations for what’s possible in the next 3-6 months. You may have to adjust your annual goals accordingly.
Make a ritual out of moving on
You can only beat yourself up for a bad performance for so long. If you wallow in your shortcomings, it prevents you from moving forward. In EOS, we use grading the quarter as a ritual for moving on. It provides closure and is a way to say, “We own that this situation wasn’t great, but we’re ready to get over it and do better.”
Commit to fixing the problem
Too many companies go quarter to quarter with the same unresolved issues. They’re afraid to tackle them because they will require a massive shift in the organization. But if you use EOS, it becomes impossible for your team to bury their heads in the sand about the company’s problems. Resolving issues now instead of later can only benefit your organization.
So how did this team fare? They left the meeting fired up and excited about the next quarter! Despite the setback, they saw that this year could be their biggest, most profitable year ever. Of course, this was pre-pandemic, a bad quarter nobody saw coming. Even so, the decisions made in this meeting helped this company get on track, and they still anticipate a strong end-of-year performance.
Looking backward at the past is beneficial to see how you got where you are and what you can learn. But today is a new day. And your opportunities are unlimited.