Annual Planning is a key component in any successful company's Plan Rhythm. It's the linchpin that connects strategy to execution. It's the guideline you will use for the next 365 days to determine what to say yes to and what to say no to. Every company needs alignment around the Main Thing they will be focused on this year and the top 3-5 Key Initiatives they are committed to accomplishing. This alignment, focus, and prioritization should always happen at the highest level in the company first so that all other departments and groups can rally around the same inspiring future you are creating.
The next step is to then create your first quarter execution plan and cascade it into the rest of the organization. To cascade properly, you should share your vision for the year with everyone in the company, share the company's Q1 Priorities, and then hold a series of departmental group planning sessions where each team determines their group's execution plan and individual priorities for the first quarter. Then bam!, you're off to run your 13-week race.
But, what about Annual Planning at the departmental group level? For most companies, it is sufficient for teams to build their execution plans from each of the company's quarterly plans as the year goes on. But, there are a few cases where a team may need to take a longer view of their execution plan and create their own Annual Plan.
Here are 2 examples:
1. Distinct Business Units
Companies that are organized into unique business units that provide different products/services and serve completely different customer/clients probably need to think through the Key Initiatives that will move them forward over the course of the year, allowing them to hit their revenue numbers and support the company's overall goals.
2. Functional Departments with Long-Range Projects
An example might be an IT department managing multiple projects that could cross over several years. It's important for these departments to regroup at the beginning of each year, re-prioritize their projects based on the company's priorities, develop a four-quarter flyover plan, and consider resources needed to complete these projects.
The purpose of Annual Planning at the group level is to create a well thought out plan of execution that will prioritize the right energy on the right projects at the right time so the company can achieve its long-term and short-term goals. It is always important to remember that the Annual and Quarterly plans created by any group below the company level must be aligned and supportive of the company's plan and goals first.
Once this is done, it's important for the teams to circle back around and share their plans with each other and the entire executive team to ensure alignment and support for the important work each will focus on this year. In doing this, you can identify areas of synergy that could help accelerate the entire company or resource constraints that could hold it back. This is an important step in achieving breakthrough execution.
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