I have a client, Kate, who about a year ago as we were doing our year end review piped up with “I really need to focus more on understanding my financials better this year”. She laughed self consciously and continued “maybe that’ll be my New Years Resolution”.
Here’s the thing, Kate is a powerful CEO, runs a thriving business, and is stunningly brilliant at leading her company and her people. She simply had a blind spot around how she approached “the financials” and was about to tackle this vital skill set by turning it into a half-assed New Years Resolution.
What are resolutions and why do we make them? … We have a result in our life that we’re not happy about so we think if we make some kind of self admonishing proclamation and squarely set our jaws then we’ll be able to make it different. The problem is our resolutions are almost always a reaction to the past.
So if you didn’t exercise much last year, or in the case of Kate, you weren’t very diligent at reading your financials, chances are you’ll be doing more the same this year. Sure, you’ll dress it up in a fancy resolution, which you’ll abandon in early February, then berate yourself for the rest of the year, until it comes time to do the same sad, repetitive exercise next January. Not enjoyable and not powerful.
Squarely confronting what’s not working in your life or your business and transforming that into a commitment is the only thing that will move you forward.
Resolutions are doomed to fail simply because they are a reaction to the past.
Commitments have you taking action from a compelling future you intentionally created.
Commitments are not motivational “pump up your tires” phrases. Nor do they involve you yelling at yourself like a drill sergeant. Commitments are the quiet promises you make to produce a result out of a background of what you say is really important to you.
“Why do you want to understand your financials better?” I asked Kate. She got really quiet. “Because I know I’m not being as effective a leader and a businesswoman as I need to be… how can I really take my company to the next level if I’m not clear on what my numbers are telling me?” … After some more looking, she uncovered what she really wanted. “To take my company to the next level, which includes opening a new branch office in Los Angeles within 18 months.” “Mastering my financials” then became a commitment she took on in service of that goal.
Commitments are powerful, they get us into action for the right reasons. and the quality of the actions we take is crisper, more alive and leads to producing more effective results.
How do you get out of the Resolution trap and into the commitment game?
Make a “should” list. What are your “shoulds” for this year? “I really should … read my financials/eat more kale/be a better brother in law .” That’s all resolutions are, a big bag of “shoulds”, in reaction to a past you didn’t like. You know in your heart of hearts you’ve never made meaningful progress in your world by focusing on your “shoulds”. Chuck ‘em. Then watch the freedom that comes up when you announce to yourself you’re not really going to “learn Italian” by the summer.
Get clear on what you want. What result do you want to produce, or what experience do you want to have? Create a new future, distinct from the past. In Kate’s example, she wanted to have a new branch in LA more than she wanted to complain about “not being great at understanding the numbers”
Make a commitment. What specific projects or actions could you take on that would be in service of that compelling new future you just created. In Kate’s case taking on “Mastering my Financials” as a commitment involved setting up a structure of creating a regular monthly meeting with herself to review the numbers. Then meeting with her CFO for his take, then with her entire management team.
Fast forward a year later. Her margins have increased substantially, she better understands her business and her team is more actively involved in using the numbers to drive the company forward.
So, as you look ahead to the New Year, what’s one resolution you could take out of the past and replace it with a commitment … and if you did that, what would it mean for your level of effectiveness as a leader?