ANNUAL PLANNING - DEMYSTIFYING THE PROCESS

Benjamin Franklin was credited for saying, “If you fail to plan, you are planning to fail!” ​​

The annual plan is about aspirational thinking and measuring performance. It's a time to celebrate what you have done well, and to reflect on those experiences which fell a little short.  
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​The purpose of the annual plan is to align your team and everyone in the organization around a handful of priorities that keeps the company on track for financial success. Your annual plan will provide inspired focus and provide key performance measures to benchmark progress.

A good planning process forces you to do three things:
1)  ​Review past years' performance. ​

• Include your cross-functional partners to improve perspective.

           -  We'll talk later about using a traditional SWOT analysis to capture key thoughts.
2)  Define success and those metrics that matter.
3)  Align key resources around a shared thinking.

Once an annual plan has been agreed to, it infers entire organizational buy-in and their full support. To learn more about the planning process, read below. 

​An OGSM framework is a business planning tool that helps organizations, teams and individuals define and connect their long-term vision to short- and medium-term goals. The acronym stands for objective, goals, strategies, and measures:

O:  The objective is a clearly written, short statement of what the organization wants to achieve. 
​G:  Goals describe what success looks like. 
S:  Strategies set out how you will achieve the goals.
M:  Measures show how you will monitor the delivery of the strategies.

​The way that you use OGSM will depend on a range of factors, such as your business model, your organization's structure and culture, and the way you make decisions. ​
The development of an annual plan can be overwhelming. To simplify the process, let me redefine the process in familiar terms:
1.  What is it that you want to do?
2.  Why does it make sense?
3.  How are we going to do it?
​4.  How do we measure progress?

PLANNING STEPS EXAMPLES 
1.  What is it that you want to do?
​Here, you create a clear, concise statement of your aspiration. This needs to be more than a vague "I want to be the best." It should be a statement to focus your thinking and be aspirational. THINK BIG!

For example, imagine you're a manager in a large automotive manufacturer. Your statement might read, "To become the nation’s leader in electric van manufacture." You could expand on this by adding, "...through developing cutting-edge battery technology, high-performance motors, and an innovative workforce…"

You might then extend this further by saying, "...and enter new commercial markets that other manufacturers are not addressing."

2.  Why does it make sense?
Here, you set out to define success by quantifying your desired results.

To return to the automotive manufacturer example, your goals might be:
•  Within 6 months, develop a battery pack capable of giving a 10,000 lb. vehicle a range of 650 miles.
•  Within 8 months, develop a motor capable of delivering 400 horsepower and 400 pound-feet of torque.
•  Within 10 months, integrate these technologies into a standard van body and demonstrate a production-ready prototype.
•  Within 12 months, develop a fully costed proposal for manufacturing the vehicle at scale.

Here, it is a general practice to present financial measures, then captured in its entirety in a traditional P&L format.
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3.  How are we going to do it?
This is your road map. It defines those actions which need to be done to deliver against your promise. The more specific, the easier it is to explain and measure progress.

Sticking with our fictional automotive manufacturer, samples might be:
•  Set up a well-resourced, dynamic HR team that is capable of running an accelerated recruitment program for bringing expert engineers on board.
•  Recruit engineers with strong experience of developing and integrating specialist electric vehicle components.
•  Establish a development facility at existing research or manufacturing sites.

4.  How do we measure progress?
Here, you are trying to answer the questions, "Are we on track to deliver against our promise?”
Marketers will generally refer to two documents:

1. A calendar of events to monitor major activities against the original timeframe.  
2. P&L statements to monitor revenue, cost, spending, and profit performance.

With these two documents, the manager will broadly share with management and their cross functional team members how well 'everyone' is performing against plan.

REAP THE BENEFITS
Developing and executing a well thought-out Annual Plan will deliver multiple benefits to your business including:

• Improved organizational understanding as to those highest priorities.
• Broad buy-in and support to make work easier.
• A report card to measure progress, holding all these accountable who have a part in your business.
• Those companies which implement Annual Planning consistently deliver greater profitability.

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Does your business have a formal Annual Planning process in place?

​If you would like to chat about developing your annual plan, let me know. Drop me a note or call for an initial FREE consultation. ​​

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