Annual Planning – Simplified

Annual Planning – Simplified.

Albert Einstein was quoted as saying, “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” How often have you been asked to join a planning meeting and found yourself wondering if it was in fact a “planning meeting” but instead turns out to be an argument between department heads for directional control? Let’s face it, we have all grown a little tired of meetings after meetings that seem to have been better presented with a well written memo. Now let’s factor into the equation the need for an Annual Meeting. This is recommended to ALL companies to focus the entire staff on common goals and objectives. So, let’s talk about a simplified means to accomplish this important event.

Step 1… Identify Your Top “Addressable Challenge”.  To clarify, addressable refers to something the staff can actually impact. Trying to change things you have no control over is pointless. An example: the high interest rate charged by a lender. If based upon the economy, it’s not something you have control over. Focus on the challenges (aka – problems) that are within your control to change. The change begets the opportunities that can be pursued that may develop into a more efficient cost control workflow or generate additional revenue streams. Keep in mind as you identify your biggest challenges that you are in essence looking for your most worthy pursuits.

Addressable challenges start with phrases like, “we don’t”, “we haven’t” and “it’s been difficult to”. If you can’t put these phrases before your statement, you probably have a solution, not a challenge in front of you. Now place the challenges in order of their critical importance. If they cannot be accomplished within the next year, put them in order of ability to achieve this year. The focus of the meeting is direction and achievability for improvement. Here’s an example of a well-formed Addressable Challenge: We cannot reliably deliver on our sales and growth commitments. NOW the focus is on solution and implementation initiatives.

Step 2… Identify the Contributing Factors.  Now that the addressable challenges have been identified and organized in the form of a sentence, the next step is to determine the contributing factors that have led you to the challenge. If you’ve been honest about your challenge, the contributing factors may be quite uncomfortable to name and contemplate. Root cause contributing factors may have leadership involvement in the form of tolerating under performance OR not providing appropriate authority to those directly responsible for specific outcomes.

It is important to be thoughtful about listing the contributing factors and then identifying the top 3 or 4 that will most effectively contribute change to the addressable challenge.  Here’s an example of how an addressable challenge statement with well-formed contributing factors sentence may look: We cannot reliably deliver on our sales and growth commitments. Contributing factors include a culture of “doer ship” not leadership, a lack of sales leadership, and a failing to address available inventory with logistical constraints.

Step 3… Articulate the Effect on the Business.  Every addressable challenge has implications affecting your company which exact a true cost (or an opportunity cost) today and in future months. There is always a symbiotic relationship between costs and sales. Driving sales while not considering cost implications thereof is a sure-fire way to fail. At this stage it becomes more impactful if you can dig deeper and name the effect of the challenge such as “demotivated employee” as a true impact. The emotional resonance of digging deeper to uncover the cause and effect of contributing factors will allow, perhaps inspire, more of the staff to participate in the addressable challenge.

It is important to thoughtfully identify as many effects as possible with the team, then narrow the list to the most significant 3 or 4 items. As in the last two steps, assemble them into a complete sentence. A well-formed effects sentence when combined with the addressable Challenge and the contributing factors may look something like this: We cannot reliably deliver on our sales and growth commitments. Contributing factors include a culture of “doership” not leadership, a lack of sales leadership, and a failing to address available inventory with logistical constraints. The effects on the business include a damaged reputation, rushed work leading to poor decision-making, and frustrated employees.”

Now that you’ve created a 3-sentence Addressable Challenge Statement, notice how this level of thinking is a far cry from “we need to replace XYZ software next year!”  It becomes meaningful, specific and actionable. The first 3 steps amount to about 75% to clarify the problem. Let’s advance to the 4^th step to identify the solution.

Step 4… Identify the Initiatives Required Solve the Challenge. It is useful to think of the solution in terms of workflows or processes, that taken together, resolve the Addressable Challenge. As you take each Challenge, identify the 3 or 4 high level initiatives that must be executed during the year to get you to an acceptable situation. The initiatives should sound more like normal annual priorities that are the drivers you and your team believe must be executed collectively to address the challenge.

An example of initiatives required to solve the Addressable Challenge statement, based upon the tenets of this article look like this:

• Improve Sales Leadership
• Create a More Inclusive Fulfillment Process
• Ensure Excellent Process Execution
• Increase Leadership Discipline

In the final step it becomes necessary to assign single-point accountability for each initiative. From there, if teams have not already been put in place, teams and their leadership persons can be assembled for the coming year. With a “collaborative” identification and implementation structure designed as identified in this article, the inclusion factor from your staff rises dramatically.

In previous blogs and podcasts we’ve spoken about collaboration, communication and articulation along with accountability as critical factors in effective leadership, planning and implementation of every directive. Placing the essence of each of these principals in the hands of your most capable people (the employees) you have assigned within the walls of your company can be nothing short of successful. The specificity, clarity, and intellectual honesty this process evokes illuminates a direction forward and adds both structure and meaning to the otherwise unfulfilling annual planning session. Resist the over-used path and your instinct to jump to solutions before you carefully and clearly identify the challenge at hand using your trusted staff in the process. The motivation that your guidance can promote would be well worth the time and commitment.