Is your annual planning process teetering on just 1 leg?

by Lilia Shirman on October 21, 2010

in Strategy and Planning

fallen 3 legged stoolLots of companies are diving into their annual planning process.  Many will find that time and resources are wasted on seemingly useless high-level discussions that don’t lead to specific actions, that some stakeholders participate but later don’t follow through on key portions of the plan, and that there is little consistency or coordination around how groups make decisions and set priorities.

That’s because they’re  focusing on the content of the plan, while ignoring the other pieces that are absolutely fundamental to its success.   Whether you’re creating a 5 year strategic plan for an entire company, or an annual operating plan for a department, consider all 3 parts of the planning process:

1.       Structure :  HOW you will arrive at your plan

  • Outcomes – What is the scope of the plan, and what are the key decisions to be made? What should happen once the plan is completed?
  • Process – How much time do you have? Which parts of the company need to be involved? How often will you meet, and what work must happen between meetings?
  • Decision frameworks – What will be the criteria for the key decisions?  What inputs are needed ans what will be your sources of information?  What analysis will be required, will it be bottoms-up or top-down?
  • Action – How will you structure and communicate the final plan to the various stakeholders? How will you make sure that everyone understands the decisions and aligns their actions towards the goals in the plan?

2.       People – WHO will create, approve, own, and execute the plan?

  • Stakeholders – Who are the key stakeholders for this plan, and what form of participation and communication is appropriate for each?
  • Ownership – How will you ensure that key process participants take ownership for the quality of the entire plan and look beyond their own functional areas?
  • Collaboration – What will you do elicit relevant expertise in your organization, enable open-minded idea creation, and reach decisions in a timely manner?
  • Communication – How, when, and what will you communicate to whom in order to keep the organization informed about the progress  and outcomes of the planning process?
  • Commitment – How will you gain the commitment of the management team to align resources to plan objectives? Will there need to be any changes in responsibility, authority, or incentives in order to ensure commitment and ability to execute?
  • Change management – How will you need to prepare and guide the organization though any changes that the plan requires?

3.       Content – WHAT will the contents of the plan be?

  • Financial or market objectives
  • Operational execution goals
  • Market, competitive, or supply chain analysis
  • Strategies and tactics for reaching objectives
  • Prioritization of key initiatives
  • Action plans and time lines
  • Budgets

I’m always looking for examples of organization who do all three components of planning well.  If your company does, please comment or email me to share your experience.

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