It’s that time of year again when executives are thinking about their annual plan and asking themselves, “where do I start?” A lot of companies out there start their process with budgeting. Then once they have their budgets set, they move to developing their annual plan. This may sound like a smart idea to ensure you don’t blow your budget, but it may be keeping you from executing strategic growth moves.
When you budget before planning it leads to discussions about how to spend the money you’ve been allocated, instead of focusing on what you will do in the next year to move you closer to your long-term goals. Also, great ideas often get shut down due to budgetary restraints or because the money was already allocated elsewhere. To help get you started on the right foot, here are some tips to ensure you develop a strong annual plan.
Tip 1: Do your planning session, then, do your budget.
The typical process of deciding what to spend then figuring out what you want to do is really backwards. It should be the other way around! You really should figure out what you want to do before you decide how to spend your money. Don’t fall into this typical mistake and let your budget dictate your plan. Schedule your planning session now. Decide what the year should be about. Figure out what you need to do to get there. Then, you are ready to talk money!
Action: If you haven't done so already, schedule yourannual planning session now. It would be even better to schedule it earlier, for September or October. Then you will still have two or three months to figure out your budget based on what you have decided to do from your annual planning session.
Tip 2: Focus on growth moves.
Growth doesn’t happen by itself. You need to spend time thinking and discussing what strategic moves you are going to make over the next 3 to 5 years to help get you to your BHAG (Big Hairy Audacious Goal) or long-term goal. Less is more. Come up with your top 3-5 moves. Any more and you risk being spread too thin. The more energy you have surrounding each growth move, the better the chance of success.
Tip 3: Discuss, debate and agree.
Discuss, debate and agree to narrow down your key initiatives for the next year. Everyone on the executive team has different objectives and things they’d like to see get done. If you have too many key initiatives, you’ll most likely end the year with some half finished or abandoned. I like to say, don’t overeat from the buffet of opportunity. Instead – get focused. Make a list of your top initiatives. Then have team members who are passionate about those initiatives present them to the team. Discuss, debate, and when everyone has been heard, vote. Give everyone 3 votes, and then allow the intelligence of the group to triangulate the best initiatives. Now, the hard part, remember throughout the year, say YES to these and nothing else.
Tip 4: Inspire the team.
What’s going to motivate your employees to get the work done? Jump into a time machine and zip to the end of next year. Ask yourselves, what made the year successful and memorable? Have each team member write this down. Then have everyone share what he or she wrote with the group. Next, as a group, come up with one destination postcard for the year together. Make sure it is memorable, compelling and improves the company in some way. Lastly, go out and share it with the entire company. This could be done in many different ways, through department meetings, a letter from the CEO or even a party. One of my client’s has a big celebration, with music, food and drinks, to get everyone excited for the coming year.
Hopefully these tips will help with your annual planning and make it feel less daunting. Let’s get going, schedule your annual planning session and a strong annual plan. What breakthroughs do you need to have a great year? Let’s make it remarkable!
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