I would challenge you to think very hard about this question as it’s not an easy one to answer based on my experience as a facilitator, strategist and execution coach. Part of my job is to help companies prepare for and have effective annual planning sessions that are strategic to help them reach their long term goals. Too often, time is spent at the operational level, action planning or setting unrealistic targets with no real strategy how to achieve them. It is very important for the team to spend ample time researching, gathering data and preparing for their sessions to get the most out of them. I have said many times through the years that it is not enough for a bunch of smart people to get together in a room for a couple days and expect to come up with great plans. There is a lot that goes into the preparation, and the strategy work needs to continue long after the session concludes.
I think this question is so important, I am developing a workshop for this year's Breakthrough Conference to help companies evaluate how they are doing at strategic annual planning and share ideas on how to get better at planning strategically.
The main points I will cover are:
- How to effectively prepare for your session
- How to make sure your plan strategically supports your growth goals
- How to make sure your plan is balanced, and healthy across the four key areas of your business
So, let’s dig a little deeper into each one of these areas without spoiling all the fun.
Effectively prepare for a productive strategic annual planning session that is based on data and information
Here a few things to consider to get started:
- Have the team do the right pre-work, basics include a SWOT analysis and a Start-Stop-Keep exercise.
- Research trends in your industry.
- Review your 3-5 year strategies for growth to see if they are still the right ones, evaluate if you are making progress and begin to think about next steps and annual initiatives that support them.
- Pull together supporting financial data.
- Gather and evaluate sales data and develop a preliminary sales plan.
- Gather and evaluate marketing data and develop a preliminary marketing plan.
- Evaluate how you are doing with your employees and look at your organizational succession plans for the future.
- Review all of your process improvement activities and capture the progress made, while starting to plan your efforts for the coming year.
Make sure your plan strategically supports your growth goals and targets
- Review your 3-5 year growth strategies as a team and discuss progress made, adjustments, next steps and confirm that they are going to help the company meet its growth targets.
- If the growth strategies do not collectively help you reach your targets, decide which ones to kill or put back on the idea bench and brainstorm new ones. Use the information you gathered from the SWOT, sales data and market data to determine where the growth will come from and how you are going to get there. It’s one thing to set a target, another to develop a strategy to achieve it.
- Evaluate if you have the right mix of growth strategies. We recommend 3-5. More than this and the efforts get diluted and execution and results suffer.
- Look for blue ocean to compete in rather than the crowded red sea. It is easier to succeed in an uncontested market space than it is in a crowded segment.
- Use these strategies as the basis to develop your annual initiatives to determine what you are going to focus on in the coming year.
Make sure your plan is balanced, healthy and realistic
- Set targets for the year that support your 3-5 year targets.
- Develop operating budgets that support the targets and make sure you have the capital available to fund the growth.
- Develop 3-5 annual initiatives that directly support and link to your 3-5 year strategies.
- Make sure your plan is balanced across the four key categories of your business; Employees, Customers, Processes and Revenue.
- Make sure your initiatives are SMART: Specific, Measurable, Achievable, Results oriented and time-bound
- Develop a four quarter flyover plan to help you vision out what will be done in each quarter of the year.
There is a lot of work that goes into preparing for and having a truly strategic annual planning session. Spend the time up front doing your homework, having any pre planning sessions that are necessary at the department level and so that you can bring the right information to the session to really plan effectively. Once the homework is done, challenge each other in the session to work at the right level and really plan strategically for the long term and in a way that helps you reach that BHAG your team set.
Good luck and I wish you the best planning session ever! Alan
Photo Credit: iStock by Getty Images
Rhythm Systems Annual Planning Resource Center