Planning For Next Year
For the past few weeks I have been going from Board Meeting to Board Meeting reviewing, discussing, debating, and, ideally, approving the 2017 plans for the companies that I work with.
Here are some thoughts and observations about the year end planning process:
1) Companies should start the annual planning process early. I think September is a good time. It should start with a wide open data gathering process which involves as much of the organization as is possible.
2) The planning process must be grounded in the strategy which should be set in advance of the planning process. If a strategy adjustment is required, that needs to happen before the plan can come together.
3) The senior team needs to do the plan as a group. That can involve offsites, a set of regular (weekly?) meetings, or something else. But planning is a team effort and a plan can’t be handed down from on high like the ten commandments.
4) My number one feedback on annual plans is that they should have less focus areas. I think three big bets is good for most venture backed companies. Five is an absolute max. The more you try to do the less you get done.
5) The numbers should fall out of the strategy and plan, not the other way around. If you don’t have enough money to do everything, change your strategy. Don’t plan by numbers. Plan by developing a set of priorities that come from the long term strategy, and informed by the inputs of the organization.
6) Don’t drop your plan for next year on your Board the day before a year end Board meeting. The good news is that none of the companies I work with did this. I am very happy about that. It is best to give the Board a preview (ideally multiple previews) of the plan as it is coming tother so that you can get feedback and buy-in well in advance of the final approval process.
I am a big fan of the annual planning process. I realize that all plans end up evolving during the year and things change and companies adapt. But a good plan gets everyone (including the Board) on the same page, working on the same things, and driving to get to the same place. And that alignment is incredibly valuable.