How CEOs Can Avoid High-Cost Mistakes in Annual Planning (Sneak Peek)

By Alan Gehringer

    Sun, Sep 24, 2017 @ 12:00 PM Annual & Quarterly Planning, Mergers & Acquisitions

    We are coming into that time of year where a lot of companies are gearing up or doing their annual CEOs can Avoid Costly Mistakes in Annual Planningplanning to prepare for next year. In preparation for that, we are presenting a webinar in conjunction with the Association for Corporate Growth, ACG, to highlight some of the mistakes companies make and three very important lessons that can help you avoid those mistakes and the failure that accompanies them. Did you know that on average, only 50-60% of companies actually hit their annual performance targets?Tweet: Did you know that on average, only 50-60% of companies actually hit their annual performance targets? @RhythmSystems http://bit.ly/2jDSnm5  The stats are not very good, and even worse if you have just participated in a merger or acquisition. Team members involved in a merger or acquisition want to know two primary things: where is the company going, and what do you need me to do today?

    There is a lot at stake and your board and shareholders are expecting you to perform. Because of the pressure, a lot of CEOs stress out getting prepared for the session, trying to run it while participating, and taking care not to dominate the conversations. All the while ensuring they come out with the right actionable plans. It takes a lot of discipline and work to get it right.

    You do not have to fail if you pay attention to 3 key things:

    1. Set clear expectations for an effective annual planning session and focus on the right things
    2. Run an effective session and develop the right plans for the year and first quarter
    3. Execute and make adjustments to get predictable results 

    Let’s look at the first of the three important areas that can cause failure right from the start, setting expectations for an effective planning session and focusing on the right things.

    Determine who is going to be in the session. Make sure you get the dates for the session on everyone’s calendar so they can attend the session and let them know how important the session is and that you expect them to be there and participate 120%.

    Assign responsibilities to each of the team members to make it a successful session. Choose a Sergeant at Arms, time keeper, note keeper, someone to keep the team on track when they go off on a tangent or down a rabbit hole too deep.

    Determine who the right person is to facilitate the session. It’s not always the CEO and has to be someone that has the skills to flush out the salient points of a discussion and keep the team on track and moving forward at the right level conducive to planning.

    Make plans to get your team out of the office and go off-site somewhere. If you have the resources, make it somewhere nice. This can set the right tone and provide a nice perk so that people look forward to the session. It also shows the commitment you are making to planning. 

    Plan on some team building activities or dinners in the evening. It’s a great opportunity to strengthen the team and discuss the days’ work in a relaxed casual environment.

    Customize the agenda for the session and distribute it beforehand. Make sure you time it out and allocate sufficient time for important conversations and key strategic items. 

    Send out homework and prep work to the team members. It may consist of pulling together financial reports, sales figures and projections, Start, Stop, Keep ideas, and a first shot at what some of the initiatives or special projects might be for the year. 

    You need to paint the big picture for the team. Remind them that annual planning is a process, not an event. Just because we spend two or three days together does not mean the work is done and we can stop there.

    Stay out of the operational weeds. Leave that for when you return to the office.

    Spend time reviewing your long-term goal, or Big Hairy Audacious Goal if you have one. Spend time reviewing your Winning Moves and be prepared to speak to them and discuss the assumptions that have been validated and what to work on next. Spend some time looking at your sandbox and core customer to see if anything changed.

    Leaders should do some pre-planning with their teams and gather the necessary data to bring the planning session. The more pre-planning that is done in advance, the more efficient and effective the session will be. 

    Set the expectations that you are going to come out with a strong annual plan with 3-5 key annual initiatives and a 90-day execution plan for Q1 plan to kick off the year with a vengeance.

    Annual Plans done right accomplish 2 things:

    1. Drive your 3-5-year strategy forward to move you to the next base camp on your journey to reaching your BHAG
    2. Provide a clear action plan so everyone on executive team and individual departments know what they need to do for the year and for the first quarter to get the right work done

    Please join us on October 5th to learn more about the three things you need to do to avoid high-cost mistakes in Annual Planning. I look forward to working with you and get ready to plan well, Alan

     Free Annual Planning Guide - Rhythm Systems 

    Looking for more Annual Planning information to help get you started? Check out our additional resources:

    How to Conduct an Annual Planning Meeting

    Annual Planning: 9 Tips to Focus & Align Your Team with a Great Plan

    Annual Planning Playbook: 5 Steps to Create a Winning Annual Plan

    Best Practices for Annual Planning

    Rhythm Systems Annual Planning Resource Center

    Photo Credit: iStock by Getty Images  

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