A Step-by-Step Guide to Successful Annual Planning
In this guide:
A Blueprint for Success
The Ultimate Guide to Annual Planning
Successful companies plan for success. That’s why a proven annual planning framework is so important. By reflecting on the previous quarter and year and updating plans for the near and medium terms, you’ll turn what are often vague hopes for success into a plan that is explicit, coherent, and resonant for all to follow.
We have the blueprint to help you get started.
Annual Planning
What Is Annual Planning?
So, what is annual planning anyway? Simply put, it’s a comprehensive annual process that ensures your entire organization remains aligned around who you are, where you are, where you’re going, and the specific goals the organization wants to achieve in the near term (90 days to 1 year) and medium term (3 years). It’s a critical process for ensuring your organization is focused, aligned, and thriving.
While a compelling vision is extremely important when you and your colleagues are genuinely committed to building a damn good or, better yet, great company, a vision without action doesn’t move your company any closer to success. That’s why the elements of your vision should be reviewed at least quarterly and updated annually.
And that’s why we’re sharing the best practices we’ve adopted for the annual planning process, centered on having super productive Annual Planning Meetings (APMs). Our Senior Leadership Team (SLT) has a two-day meeting, and each of our Departmental Leadership Teams (DLTs) has two half-day meetings (first right before SLT’s to establish recommendations, second right after SLTs to finalize). Our SLT meeting is purposefully structured to revisit and, as needed, reset our 3-year and 1-year goals as well as establish 90-day goals (or Rocks) for the first quarter of the new year. Each item on our two agendas — one for the SLT, the other for the DLTs — is designed to help our entire company focus, align, and thrive.
Our annual planning process — coupled with our quarterly meetings process — ensures our vision continues to inspire and our goals move us forward. Perhaps the biggest win? Crafting an annual plan provides a framework for activities throughout our entire company; team members now have a much better sense for exactly how their day-to-day work directly supports our company’s future.
Numbers Don't Lie
The Importance of Annual Planning
Too often, business leaders are so focused on hitting end-of-year deadlines and goals that they fail to proactively engage in annual planning. You’ll find plenty of statistics to illuminate why that’s… not good.
Here are some statistics that are decidedly more positive:
71% of fast-growing companies have strategic plans, business plans, or similar long-range planning tools in place. (Journal of Small Business Management and Bplans)
Entrepreneurs with a business plan are 129% more likely to push forward with their business beyond the initial startup phase and grow it. (Small Business Economics and Bplans)
Follow a Proven Annual Planning Process
The size and maturity of your company will help you determine how to approach annual planning. Ninety makes it easy with a customizable agenda for your meetings, but you might decide some agenda items aren’t necessary. For example, if you’re in the “Survive” Stage of Development, you might modify things a bit to suit your needs until your organization is on a bit stronger footing. But make no mistake: Annual planning is not an optional activity… unless growth and success are seen as optional for your company.
The following annual planning activities are what we consider a must for any company.
Review Your SWOT
At the risk of stating the obvious, on any decently long journey — like that associated with starting, building, running, and scaling your company — it’s important to occasionally stand back and ...
At the risk of stating the obvious, on any decently long journey — like that associated with starting, building, running, and scaling your company — it’s important to occasionally stand back and not only assess where you are but think about the implications. One of the most time-tested frameworks for helping teams do this is the SWOT (strengths, weaknesses, opportunities, threats) analysis exercise.
This exercise spurs Senior Leadership Teams to not only think about the moment their company is in but sheds light on the kinds of issues and opportunities that should be addressed during an Annual Planning Meeting. A good SWOT analysis is always most effective when the company’s vision is clear, and this, of course, includes taking into consideration the company’s Compelling and Audacious Goals (or CAGs). Everything about the SWOT analysis is centered on knowing where we are and what we need to do to make steady progress toward turning our vision into reality and ensuring everyone is motivated and galvanized by it, day after day.
Helpful Hint:
You’ll find it helpful to have everyone on the SLT actually “grade” the year so you know where you stand before beginning the work for next year.
Master the Math of Your Business
As we're fond of saying: Average leaders want to be left alone. Good leaders want a coach. Great leaders want to know the truth. At the core of any damn good or great company is an operating ...
As we're fond of saying:
Average leaders want to be left alone. Good leaders want a coach. Great leaders want to know the truth.
At the core of any damn good or great company is an operating system that helps it connect and see its key data. Data helps leaders make fact-based decisions, and data-informed decisions make it so much easier to move teams closer to accomplishing their goals. Why? Because otherwise, decisions are predominately opinion-based. As we know all too well, every human inside our companies has lots of these, and oftentimes, they’re subject to a whole host of biases, not the least of which are recency and self-interest.
This is why we encourage leaders to establish and review numerical goals that include the obvious financial goals (revenues, margins, and profits) as well as set goals for the company’s 1–3 most important KPIs (such as number of customers, customer concentration, and our customer net promoter score). Your numerical goals help ensure all is on track for what is commonly called the math of the business.
Focus on Inspiring Goals
The key to a solid annual planning framework is homing in on the goals that will help you turn the vision of your company into reality. You’ll look for agreement on numerical goals for the ...
The key to a solid annual planning framework is homing in on the goals that will help you turn the vision of your company into reality. You’ll look for agreement on numerical goals for the coming one and three years as well as for the next 90 days.
As mentioned earlier, a damn good or great vision includes what we refer to as Compelling and Audacious Goals (or CAGs). These are big-picture, long-term, hugely inspiring goals (hats off to the 10x is easier than 2x mindset) that are typically set about ten years out during an SLT’s first formal Vision Setting Meeting. Once established, they have a date (for example, our two CAGs were established in 2020 and have an “accomplished by” date of 12/31/30) and typically last at least five years before they are updated.
We find teams are most effective at setting goals when they work from their CAGs backward. The consequence of this is that we recommend leaders agree on their 3-year goals before they set their 1-year goals and set the 90-day goals last. Since the 3-year goals are fairly far out — but closer than most people appreciate — we love it when leaders have a list of 10–15 3-year goals that help everyone in the company see what needs to be done to achieve the CAGs. Regarding 1-year and 90-day goals, we encourage leaders to agree on a list of 3–7 company goals. Why so narrow? The more goals we aim for simultaneously, the less focused we’ll be and the less likely we are to actually complete them.
Once the team agrees on 1-year goals, use them as the foundation for setting your Rocks. Since these Rocks will be the focus for the new quarter, this segment will often be one of the most energizing parts of your annual planning. It’s exciting to think aspirationally and set new targets, right?
Helpful Hint:
When setting your Rocks, be sure to make them SMART — Specific, Measurable, Achievable, Relevant, and Time-bound.
Get Prepped: Annual Planning Resources
Planning the year ahead is no small undertaking, and we understand the effort that goes into it. There’s plenty to think about, and preparation is key. We want to give you a leg up with a few resources that are sure to help.
Download this checklist to help your Senior Leadership Team prepare for the Annual Planning Meeting.
No doubt about it, annual planning is essential both from a strategic perspective and for morale. Taking the time to meet and ensure there is alignment within your leadership teams — and eventually, with everyone in your company — is essential for team health. Simply put, your senior and departmental team leaders will understand each other more deeply as people after spending one or two whole days together formulating an explicit, coherent, and resonant set of plans. These meetings are especially important for remote or hybrid teams.
At Ninety, our SLT is always energized coming out of our planning meetings, but especially after a great two-day annual planning session. Motivation levels are high. Everyone knows what they’re doing for the next year, and everyone is focused on what’s most important. You want that same energy, so review these key meeting disciplines to make the most of your team’s time together:
At Ninety, we have every one of our Departmental Leadership Teams (DLTs) meet for a half-day before our SLT meets to create a draft of their updated plans for the next year (some even have one- and two-year goals) and the next 90 days, and our department heads come prepared to share these with the SLT during its Annual Planning Meeting. This gives us a collective sense of what the departments are thinking, and it helps ensure that our SLT has what it needs to have a great two-day session.
We can’t stress this enough. Sitting in the same old conference room for hours on end won’t inspire or energize anyone. Create a different frame of reference for the important work ahead. And leave some time for fun at the end of the first day. That’s an important element of team health, and you’ve worked hard for it.
Ideally, you’ll have a draft budget ready to be discussed, if not approved. Assuming that, add candidates for your 3-year and 1-year goals and Rocks to the Long-Term Issues list. Clean house by removing any Issues that are no longer applicable, and decide on a team health activity to create deeper connections and get people working together as one.
For example, think about any new Seats the team may need to add to the Org Chart over the next year. Real-time adjustments make it easier for the team to visualize future changes and reduce data entry after the meeting.
If this is your first attempt at annual planning — and you’re running your meeting on Ninety — you’ll want the team familiar with the tools and concepts you’ll use. For example, some team members might be well-versed in performing a SWOT analysis, but it might be entirely new for others. A brief overview ensures everyone is on the same page.
Take advantage of Ninety’s Issues prioritizing system ahead of time. Make sure to revisit the priority ratings from the prior Quarterly Planning Meeting, or QPM, if you’ve had one. (Hint: You should have.)
Since people rarely work alone, the health of your team is paramount. Like an individual’s physical health, team health does not maintain or improve by itself. It requires attention, effort, and commitment. That’s why you should engage in a couple of team exercises to strengthen those bonds. Here are a few team health exercises we like, but of course, find the ones that fit you best:
Personal History
In this exercise, each team member answers 5–7 personal history questions. The questions are relatively mild, but they tend to bring people together as everyone shares about their lives outside of work.
Five Dysfunctions of a Team
This exercise created by Patrick Lencioni is described in his best-selling book by the same name. Though it may seem a bit uncomfortable, it’s designed to increase trust among team members.
Read the Book
You probably guessed it was coming, but yes, we recommend reading Lencioni’s book, Five Dysfunctions of a Team. This will provide the context needed to make the most of exercise #2.
The "1 Thing" Exercise
Here, each team member identifies an admirable trait of every other team member and recommends one thing they would like that person to either start or stop doing for the benefit of the entire team. The result is each team member promises to start or stop doing one thing from that feedback and becomes accountable for that promise.
Departmental Goals
After the SLT has locked in the company’s updated 3-year, 1-year, and 90-day goals, each of the department leaders returns to their respective teams and finalizes their team’s 1-year and 90-day goals. At Ninety, most of the preliminary goals that were brought to the SLT APM tend to be embraced, but there have certainly been times over the years where one or more of our departments had to revise their preliminary goals based upon the overall needs of the organization. This tends to happen most often for either our Creative or Education departments.
Once we have locked in our company and department-level goals, we are now ready to share our updated plans, and we do this at what we call our State of the Company Meeting.
State of the Company
We’re strong believers that high-trust, agreements-based cultures thrive on transparency. Trust is built through openness, and when it comes to our business, we’re committed to being as transparent as possible with our colleagues. Our quarterly State of the Company Meetings (SCMs) are a cornerstone of this commitment, providing a forum where we openly discuss company performance and future goals and align our efforts to keep everyone on the same page. While all SCMs are vital to maintaining transparency and alignment, the annual State of the Company is undoubtedly the most significant of these gatherings, setting the tone for the year ahead.
SCMs are an essential part of our annual planning process, as they keep our organization focused, aligned, and inspired. These meetings create a consistent cadence for reviewing progress, recalibrating goals, and ensuring that every team member understands how their role fits into the bigger picture. By fostering transparency and reinforcing our shared vision, SCMs build the trust necessary to sustain a high-performing, engaged team. They’re not just about reporting numbers — they're about celebrating achievements, learning from challenges, and motivating our entire organization to move forward together toward our long-term goals.
Maintaining Progress
Keep the Momentum After Your Annual Meeting
Once you’ve held all of the meetings associated with your annual planning process (SLT, DLT, and your State of the Company), you’ll feel good knowing you’ve created a strong agreements-based foundation for the year ahead. It’s great to have all of the associated goals, but you’ll need discipline to keep them in focus and achieve them.
Now’s the time to execute on all that hard work. This is why maintaining a quarterly cadence is such a critical discipline. Staying disciplined with a quarterly cadence that includes Quarterly Planning Meetings at the SLT and DLT levels and that concludes with a State of the Company gives you a time-tested discipline that ensures company-wide alignment.
Naturally, data analysis plays a key role in planning or reviewing your goals on a quarterly basis. As we like to say, what gets measured gets done. How are you doing compared to your established KPIs and targets? What adjustments might be needed? Learn how to make data a superpower, and you’ll gain clarity, focus, and accountability throughout the organization.
Helpful Hint:
Not sure where to start with your data? Ninety has pre-populated KPIs directly in the annual and quarterly meetings tool as a starting point.
Check out these resources to help you move along successfully each quarter.
Jan 16, 2024
How We Boost Organizational Excellence in 90 Days
If you’re like many business leaders today, one of the biggest challenges you face is not just how to build a good company (that’s challenging enough!) but how to produce an excellent organization — one that leaves a legacy.
On Quarterly Planning Meetings
The On Quarterly Planning Meetings Guide extensively details how to run a quarterly meeting.
Rocks
Discover how having your team members own Rocks that are aligned with your long-term goals keeps the entire organization working toward your Vision.
Tips and Tools for Simplifying Annual Planning
Annual planning is not that difficult when you have the right concepts, tools, and disciplines. Before you even get started, however, you can gain a strong sense of where you stand today. Ninety’s new Assessments tool provides benchmarks for your organization, highlighting your Stage of Development and organizational maturity in the 9 Core Competencies every great business should master.
And when it’s time to roll up your sleeves and get to work on annual planning, Ninety’s cloud-based platform has all the tools you need. Our Meetings tool, in particular, offers a customizable, pre-built meeting agenda you can leverage for not just your SLT’s annual and quarterly meetings but modified for your DLT’s as well.
Here are a few things to keep in mind:
Decide the KPIs that are beneficial for your team to track on the Quarterly and Annual Scorecard.
Add 1–3 years’ worth of previous data to those KPIs. (Our pre-populated list of KPIs comes in handy here.)
Have the SLT review every department’s proposed numerical goals, Rocks, and any Issues that might impact 1-year goals.
Use the forecasting tool in the Scorecard to forecast your goals by quarter for the upcoming year.
During your annual, you should have the data ready for your strategic discussions.
Before each subsequent quarterly meeting, you’ll enter the actual numbers and discuss.
Assess where your team is today:
Org Fitness Review
We recommend all teams take the Org Fitness Review every quarter or at least annually to assess their growth across the 9 Core Competencies.
Baseline Assessment
We created the Baseline Assessment to help leadership team members understand their organization's current proficiencies across the 9 Core Competencies — the nine areas a business must master to become a great company.
Stages of Development Assessment
Measure your company’s stage of development with Ninety’s innovative 10-question assessment.
Frequently Asked Questions
There is no right or wrong answer here. Some companies start the annual planning process and then do the budgeting. Other companies choose the opposite approach. While we think it’s a good idea to at least have a draft of the annual budget before meeting on your annual plan, do what works best for you.
Scrambling to meet your key numbers at the end of every quarter and hoping for success isn’t a sustainable practice for companies that want to grow. Your annual planning process helps your leaders devise — and align upon — a comprehensive strategy that details the specific actions, goals, and milestones your organization wants to achieve not only in the year ahead but also the longer-term goals that support your vision.
Most companies follow a calendar-based timeline, so annual planning usually kicks off in October. However, we have clients that hold their Annual Planning Meetings as late as February. If your company follows a fiscal year (such as a retail organization), the general rule of thumb is to begin annual planning 2–3 months before the new fiscal year starts.
Senior Leadership Teams should give themselves two full days for annual planning, and Departmental Leadership Teams should allocate a day. Both types of teams need to have ample time to align on past accomplishments, future goals, and team health. That said, depending on the size and maturity of your organization, you might not need a full two days.
Annual Planning Meetings not only involve setting the stage for the upcoming year and updating 3-year goals but should also include other exercises that help teams focus, align, and thrive. These exercises usually include a SWOT review as well as some quality work on team health. Quarterly Planning Meetings, on the other hand, are centered on how we are doing in terms of making progress on our 1-year goals and setting 90-day goals. They serve as an effective reminder of the things that still need to be done.
No, departments also have meetings to craft their plan for the year. Unlike the leadership annual meeting, which should take two days, a departmental annual meeting can likely be accomplished in a day. Each of your departments’ plans should align with, and be in support of, the company’s goals, so some of the heavy lifting has already been done for you.
Ninety Helps Simplify Annual Planning
Run your annual meetings in Ninety and gain alignment throughout your company by having the elements of that plan available for all to see, all in one centralized place. Our cloud-based platform lets you memorialize your vision and capture Data, Rocks, Issues, and more. Ninety offers a complete suite of business-building tools, plus the concepts and disciplines needed to help simplify the hard work of building a great company.
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