The tendency to think of pursuit of perfection in all aspects of our work is a recurring theme in our company that’s likely familiar at yours, too. Striving for perfection is difficult for any organisation placing an emphasis on high-quality deliverables, but even more so if one of your corporate values is “excellence,” or some derivative thereof.
Sure, aiming for perfection is admirable. Hours, if not days and weeks, expended on fine-tuning the design of a web page, a cut of a video, or final draft of an article will certainly increase the quality — but, at what cost? Were earlier versions sufficient with just 90% of the polish? Was the extra time invested worth the extra 10%? Possibly, but probably not.
Before I am accused of endorsing mediocrity, let me give you some scenarios that will make the case of progress or perfection. After reading these examples, I’m sure you’ll agree that more often than not, it’s in the organisation’s best interest to make many small improvements and realise the gains that can be quickly achieved when not striving for absolute perfection.
Before each year begins, with most of the results in from the previous year, you’ve probably found yourself in a series of budgeting meetings, or at minimum, developing some type of financial forecast. You do this either for your own planning purposes or because your bankers and investors are demanding it from you.
Financial models are more than just financial statements that are projected out three to five years. The key difference is that they include a number of inputs for both the revenue and expenses, driving profit projections for years to come. These inputs act like dials on the dashboard of a spaceship, with some being highly-sensitive and others having minimal impact.
Where endless hours get wasted is the guessing of whether or not growth rates for an established revenue stream will suddenly increase to 25% when they’ve been at 10% for years. Or worse, anticipating a wildly successful product launch that will add millions to your bottom line. Such estimations, which are done when there’s just too much emphasis on the goal of perfection, will only result in disappointment. Rather, conservative estimates done at-a-glance will provide you the wiggle room to be off slightly, and still have a high likelihood that you’ll hit those annual targets, all while avoiding disappoint and a loss of valuable time.
Why Progress Is Better Than Pursuit Of Perfection
Whatever you put in your financial model, there’s one thing I can guarantee you right now, even without knowing anything about your business: your model will be wrong. Period. It’s just impossible to perfectly forecast the results of your business with absolute certainty for the next 12 months, let alone for three or five years in the future.
Our VP of Finance reminds me at the end of the first iteration, which he’s very comfortable with, that we could spend another three weeks on the financial model but only achieve 10% more accuracy. Given that some inputs in the model, such as currency exchange rates, are completely out of our control anyway, we’ve come to the realization that our time and energy is best directed elsewhere in the company where we can definitively add value.
How To Save Time
In an effort to save time, I suggest working from a template. For this, you can either download a Spreadsheet or build one on your own that best reflects the nuances of your business. The key, though, is to constantly review it and update the model quarterly to see how you’re tracking.
Small incremental changes will allow you to make slight course corrections, which will ultimately result in an accurate forecast. With each iteration, especially the annual planning session, you’ll be able to apply your human intelligence to your inputs.
With budgets in hand and a mandate to grow revenue from your flagship product lines, as well as launch a new product, organisations move into the mode of strategic planning. Strategic planning exercises could include performing a strengths, weaknesses, opportunities and threats analysis (also known as SWOT), brainstorming sessions, and employee engagement surveys. This data can then be used by the leadership team or strategic planning committee to most effectively use your organization’s resources to achieve key objectives.
Many strategic planning meetings are used to surface every good idea from the recent past in hopes of getting it approved for implementation in the upcoming quarter or at some point this year. Before you know it, the list is far too long given the financial and human resources the organisation has. Clearly, there’s a disconnect, but who will be brave enough to state the obvious?
Why Priorities Are Better Than Pursuit Of Perfection
It’s in these moments that someone must speak up and turn the conversation to establishing priorities. Given that time is finite and — for many companies, money is too — only so much can be accomplished in a given year. Does this mean you’re being pessimistic, or worse, defeatist? Not at all. In accepting this, you’re ultimately empowered to be realistic because you know that by making the choice of progress over perfectly accomplishing every item on the list, you’ll avoid huge budget overruns and a burnt out staff.
How To Save Time
Boundaries are one of the best ways to qualify which ideas are formalised into project teams and which initiatives get funding. Consider setting a limit of three big projects per quarter; that’s one per month. More than that will likely get cut anyway, or pushed into the future. By creating healthy boundaries, such as caps on time to be allocated or funds to be used, you’ll set yourself up for success.
Accepting the Tradeoffs
Maturity in an organisation is when those in senior leadership know the limitations, be they financial, legal, technological or otherwise. Making the decision to pursue progress and take incremental steps forward in the right direction will lower the risk of big bets that could go bad. In doing so, you’ll also avoid projects that never seem to get off the ground because they’re indefinitely stuck in pursuit of perfection. Progress is what has defined humankind’s advancement and, it should be no different in your company.
[This post first appeared on the Business Collective – an initiative of Young Entrepreneur Council, which is a free virtual mentorship programme that helps millions of entrepreneurs start and grow businesses.]
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