Are you where you want to be?

The benefits of a mid-year performance review

Hands up if – earlier this year – you thought an autumn election was on the cards.

I’ll admit, I wasn’t anticipating a mid-year opportunity to give my opinion on the government’s performance. But in business, we can – and I’m convinced we should – always set aside time for a mid-year review of our business performance.

Now, I know you’re likely to have set a budget just a few months ago and that the budgeting process will start again soon. But, as the election date issue shows us, circumstances change, and curve balls arrive. The sooner you respond to events that need your attention the better. If there’s something adrift in your operation, you can react. If you wait six months, you could have a far bigger problem on your hands. Similarly, if an opportunity has arisen, you can grab it now and start to accrue the benefits.

What to include in your review

It would be flippant of me to say anything and everything but, to be worthwhile, a review should be comprehensive. There’s little point focusing entirely on your record-breaking output and ignoring your perilous cash-flow situation.

Consider your key metrics. Where are you in relation to them? Don’t simply look at the numbers – think about whether that metric is still relevant to your organisation. If the global market for Widget A has dried up, why continue to focus on achieving zero reworks on your Widget A production line?

In short, assess your progress against the key metrics that are currently relevant or that you expect to be relevant shortly. Be prepared to adjust objectives that no longer serve – even if they were deemed priorities in your most recent budget. We know that markets change. We know that innovative technology arrives and revolutionises the way we work. It follows that goals must change too.

External factors – political and social events – also lead to change. A review gives you the chance to think about economic factors or policy changes you might need to prepare for. For example, what impact could a change in how apprenticeships work have on your operation?

Naturally, you’ll need to review your business finances. What’s happening with your cash flow? Is your selling price still appropriate? Are your costs under control? Are you getting the best possible deals from your supplier? If you budgeted to spend £1,000 per tonne on Input X it’s too easy to congratulate yourself if you’re purchasing it for £900, but you shouldn’t if the market price has dropped to £800.

Consider new opportunities. Remember the old saying about the early bird catching the worm? What could you start now that could be paying dividends by the end of the year? Will an investment allow you to gain an important and valuable contract?

And while you’re reviewing all these things, remember to recognise the progress you’ve made and the targets you’ve hit. A mid-year review isn’t just about discovering where you need to redouble your efforts or about changing direction. It can be a wonderful time to celebrate your successes and reward those who have gone the extra mile.

How to conduct your review

Do you have your best ideas when you’re in the office, under pressure, juggling countless priorities? Or do they arrive when you’re away from the desk, perhaps in a different environment, with a bit of space and calm? For me, it’s the latter. That’s why I recommend you set aside the time for a thorough review. If possible, head offsite to avoid disturbance.

Make sure you have the information and the people you need with you. Listen to the messages others feel are important. What insights can you glean from your employees? Are they engaged and motivated? What ideas can they bring to the table? Keep an open mind.

And listen to your gut. You can have every KPI on target and be on track to bring your budget plans home, but that doesn’t mean you’re on the right track. Are your actions still in line with your business’s purpose and vision? Are you comfortable with your ESG position and direction?

Ready for the next six months

A mid-year review shows you what’s working and what isn’t. It gives you time before the critical budget period to implement changes. What’s more, as both an evaluation of your performance to date and a timely review of your strengths, weaknesses, opportunities and threats, it’s crucial groundwork for the budgeting process itself.