Annual planning is six steps run over about eight weeks: review the year ending, agree what changed, choose the few things next year is for, set measures that can move both ways, give each one an owner, and book the reviews. The last two steps are where the value is, and where most processes run out of time.
It is November, which means most businesses are either in this now or about to be.
The six steps
1. Review the year honestly, before anyone talks about next year. Not a highlights reel. What did we commit to, what actually happened, and where did the two diverge. Teams that skip this step repeat the same mistake with a new number on it, because nobody has named the mistake out loud.
The useful prompt is not "did we hit it" but "when did we first know we would not". That date is almost always months before the end, which tells you the problem is visibility rather than effort.
2. Agree what has changed. The market, the competitors, your own capability, your costs. Short and specific. The purpose is to establish what the plan is responding to, so that in six months somebody can ask whether the assumption still holds.
3. Choose the few things next year is for. Three to five at the company level. This is the hard step, because choosing means refusing, and a list of twelve priorities is a way of avoiding the refusal. If everything on the list is important, nothing on it will be protected when the quarter gets busy.
4. Set measures that can go down. For each commitment, a number that would get worse if the work was not happening. This is the step that separates a plan from a wish list. "Launch the new service" is binary and tells you nothing until it is too late. "Twelve clients onboarded to the new service by the end of Q2" can be behind in March.
5. Give every commitment one named owner. A person, not a department. The test is whether that person would recognise the commitment as theirs if you asked them about it on a Tuesday without warning. Most plans fail this test, and it is the single most reliable predictor of whether a commitment lands.
6. Book the reviews before anyone leaves the room. Dates in calendars, with the measures attached. Decided afterwards, reviews get scheduled when it feels comfortable to look, which is not the same as when it would be useful to look.
The timeline
| When | What happens |
|---|---|
| Week 1 to 2 | Review the year ending. Gather the numbers before the opinions |
| Week 3 | What has changed, written down in a page |
| Week 4 to 5 | Choose the few. This is the session that needs a full half day |
| Week 6 | Measures and owners, worked through commitment by commitment |
| Week 7 | Budget against the plan, now that the plan exists |
| Week 8 | Reviews booked, plan published, first quarter started |
Eight weeks of elapsed time, not eight weeks of meetings. The work between sessions is mostly one person drafting and others reacting, which is faster than drafting by committee.
Why most annual plans are dead by March
Not because the plan was wrong. Because the plan stopped being read.
A document that lives in a slide deck is consulted when somebody remembers it exists. By the third month, the quarter has its own momentum, the weekly meeting is about this week, and the commitments made in November are being tracked by the person who happens to care about them. That is the execution gap, and it is a visibility problem rather than a motivation one. Sull, Homkes and Sull in Harvard Business Review, 2015 found the common failure to be coordination across teams rather than alignment up and down them, which is exactly what goes missing when the plan stops being a shared object.
The fix is mechanical. The plan has to be somewhere people already are, the measures have to update without anyone being chased for them, and being behind has to be visible in the month it happens rather than at the half year.
Empiraa GPS is a strategy and accountability platform that helps businesses deliver their priorities without chasing updates across spreadsheets and meetings. The plan carries its own owners, measures and dates, so the November version and the March version are the same document.
Related reading: short term business goals that survive contact with a quarter, and what operational strategy is.
Strategic planning has a definition on this site, and strategic planning tools compared covers what to run the process in.
