Annual reports aren't just for the Fortune 500

Many people are familiar with annual reports issued by large companies like General Electric. They tend to be a combination of bland fiscal reporting (mandated by the SEC) and cheerleading by management at the company issuing the report. But annual reports have a significant role to play in helping to preserve institutional memory.

One might think that an annual report is too much work for a small organization. But there's no reason why an institution as small as a single person couldn't find value in producing an annual report. Nobody seems to teach a course in "How to write an annual report," but a  simple set of questions provides the outline an organization needs to write its own annual report:

  • Who worked here over the course of the year? Who was hired? Who left?
  • Who received special training or education?
  • What equipment or service contracts did you add? Why?
  • What equipment or service contracts did you remove or cancel? Why?
  • What equipment or systems were repaired, changed, or overhauled?
  • How much work did you do?
  • What circumstances affected the volume of work that you did?
  • What customers did you serve? Which were new? Which were repeat? Which customers were lost?
Every institution needs to assess its own circumstances to determine which metrics are appropriate -- but every organization has metrics from which it could draw. In the case of a municipal water system, for instance, the organization ought to record how much water it pumped and treated, what weather conditions affected its pumping requirements, and the size of its geographic service territory.

A charitable organization might not have "customers" in the business sense, but it has members, donors, and charitable recipients. Knowing the ebbs and flows in those interactions -- and why they occurred -- can tell future leaders what worked in the organization and what did not. Expertise isn't driven by innate genius but rather by deliberate practice and analysis of past successes and failures. The world's most-renowned investor writes legendary annual reports reporting as often on his failures as on his successes. But had these lessons gone unwritten, their long-term value would be anything but obvious.

An organization's annual report doesn't have to be long or complex -- even a single page will do. But unless year-to-year changes are documented and kept somewhere everyone can find them and refer to them, an organization easily risks losing the basic understanding of its own historical performance that it needs to remain viable.

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This page contains a single entry by Brian Gongol published on August 5, 2009 4:36 PM.

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