Table of Contents:
Appoint a Skilled Annual Planning Facilitator
Prep Work: Getting Ready for Your Annual Planning Session
Step 1: Review Prep Work and Learnings from the year
Step 2: Work on Long Term Strategy and 3-5 Year Strategic PlanStep
Step 3: Determine Common Vision of What a Great Year Looks Like [Destination Postcard]
Step 4: Create Annual and Quarterly Action Plans
Step 5: Do Departmental Planning; Then Communicate to Entire Firm
Step 6: Customise Your Annual Planning Agenda
Before the Session: Appoint a Skilled Annual Planning Facilitator
If you are the CEO, it is almost impossible to participate and facilitate your own planning session at the same time. Your team is already used to deferring to your opinions. Couple the power of being the CEO with the power of being the facilitator, and your opportunity to listen, learn and get the best ideas from your team falls dramatically. Instead, pass the annual planning facilitation duties to someone else and immerse yourself in the meeting. Your ideas and contribution to the discussions will provide a much greater return compared to your facilitating the meeting.
When designating an annual planning facilitator, consider this: when executive team members facilitate your strategic annual planning meetings, it can cause participants to withhold agendas or thoughts, to resist challenging others, to not be challenged in their thinking, and to not be fully engaged. Using an outside facilitator allows all of the best ideas to be heard and allows executive team members, especially the CEO, to fully participate in designing the best plan.
This article that outlines the difficult and complicated annual planning process, don’t worry though we are here to help if you need it.
Getting Ready for Your Annual Strategic Planning Session
Here’s what the CEO should do to prepare well for the Annual Strategic Planning session:
Here’s what the effective Annual Planning Facilitator should do to prepare for the planning session:
Here’s what each participant should do to prepare for the strategy review:
Before you can really start planning for the future, you need to have a good understanding of where you currently are. It is an integral step in the annual business planning process as you need a clear understanding of where you are currently and where you want to be at the end of annual plan. Everyone on the team will come into the planning session with their unique perception of how things are going and some ideas for improving and growing the business. It’s great to start the meeting by getting everyone talking and sharing the thoughts that are already top of mind. Allowing time for a little introspection at the beginning of the planning session will immediately engage everyone on the team and will establish some context for the strategic and future-directed conversations you will soon be having. Here are a few ideas to get you started.
Annual Planning should include a good balance of strategic thinking and execution planning. This is your opportunity to prepare your team for a successful year and connect strategy to execution with your strategic initiatives. In order to plan for a successful year, you must have a good idea of the strategic direction you are moving in. Where do you want to be in the next 3-5 years and beyond? What are your strategic goals? What are the strategic priorities to help you achieve them? Because strategic thinking is a process, not an event, you will need to think ahead about how to use this time most effectively. If you have a fully developed long-term strategy, you could use this time to review your strategy with the team. If you have some pieces developed and some that need more work, you could spend this time focusing on just one strategic topic. Here are a few strategic decisions you should be working on. Consider where you are with each of these and customise this portion of the annual planning agenda to work on the areas most important to you at this time.
These are the handful of rules that will remain constant over time that you believe are key to the long-term success of your business. They already exist and are evident in the behaviour of individuals that represent the very heart of the organisation. Discovering, understanding and encouraging these core values will strengthen your company’s culture and will provide a good foundation for every individual in the company to make decisions on a daily basis.
Understanding and reinforcing your Core Purpose will provide inspiration for people on a daily basis. People need to be inspired. They need to understand how their daily work connects to a greater good that is being served through the success of the company. Your Core Purpose will answer the question “why?”
Your Big Hairy Audacious Goal (BHAG) creates a vision of future success for your company. It should paint a picture of what things might look like 10-20 years in the future when you have achieved this wildly ambitious, measurable goal. Your BHAG will also provide inspiration for your people and will create a framework for strategic decision-making.
Working on your Brand Promise will require you to identify and understand your core customer, your company’s core capabilities, and your unique position in the market. Having clarity around what is meaningful to your customers and what you will promise to deliver will provide direction on internal improvement initiatives, marketing messages and sales and delivery processes.
3-5 Year Strategic Plan
These are specific, revenue-generating growth strategies you will execute over the next 3-5 years that have the potential to 2X your business. You could use this time in your Annual Planning session to brainstorm and select new Winning Moves or evaluate progress and next steps on existing Winning Moves.
Before you can start working on the specific details of your Annual Plan, you need to get the team aligned around a common vision of what a great year looks like. To do this, we recommend a team exercise called the Destination Postcard – developed by our partner Rhythm Systems. This idea comes from Chip Heath and Dan Heath’s book: Switch (ch. 4, Point to the Destination). A Destination Postcard is a vivid picture of the near-term future that shows what could be possible. It asks the team to consider how the company will be different a year from now, how life at work may change, and how you will celebrate your success.
Don’t let your annual plan fail, this will help you create your 4 quarter flyover so you can envision your path to success.
DESTINATION POSTCARD EXERCISE –
Now that you have created the proper context, confirmed your strategy and envisioned a successful year together, you are ready to discuss the details of your execution plan for the next twelve months. There are four components to the Annual Plan that you will need to consider and agree upon.
Having a great Annual Plan created by the executive team at the company level is important, but the truth is that most of the actual work will not be done at the executive level. Most of the work will be done at the departmental level, and even then, only when it’s broken down into bite-size quarterly pieces for your cross-functional teams to execute. Once the company plan is finished, each department leader should meet with their team to share the vision for the year, explain how the plan supports the long-term strategy, and discuss the department’s role in supporting it.
The leader should also share the 3-5 Priorities the executive team has identified for the first quarter of the new year. Based on that, the department should consider what their year should look like and determine the 3-5 Priorities they will pursue in the first 90 days. Each of the department’s Quarterly Priorities will also need an owner and Red-Yellow-Green success criteria. And taking it one step further, each member of the team should also identify the 3-5 Individual Priorities they are personally committing to that will support the business unit’s plan.
Once the departmental plans are finished, many companies will schedule a kick-off meeting (or series of meetings) for the whole company. This is a great way to bring people together, create positive energy and make sure the company plan has been communicated in an inspiring way to everyone. Remember, your plan is only as good as your ability to effectively communicate it to the people who will carry it out. The best time to break down departmental silos is in the planning process, have your discussions surrounding shared resources in the planning stages.
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