What Are the Best Practices for Preparing an Annual Plan?

A CEO has developed an annual business plan and feels good about it. He wants input on the best way to communicate the plan to staff, secure their buy-in and create accountability for executing the plan. What are the best practices for preparing and launching an annual plan?

Advice from a group of CEOs:

You have a plan, but is it their plan? People buy in when they have had a part in creating the plan. Your best start is to put your plan aside for now and conduct a meeting with your key staff to draft the company plan as a group. Use what you have done so far to create an outline and to ask questions to guide the discussion. By involving your team, you will not only produce what is likely be a stronger plan, but you will have a head start creating accountability for executing the plan.

How do you construct the planning exercise? Here’s an outline of a company plan discussion:

· Start with a discussion to confirm core values, vision and mission for the company. Cap this discussion with a significant company goal or objective to achieve in 3-5 years.

· Next is your marketing plan for the coming period. Who are your customers, what is your value proposition, and what is your brand promise? How will you succinctly communicate the value proposition to your customers?

· As an exercise, look at your Strengths, Weaknesses, Opportunities and the Threats that the company faces over the planning period.

· Set long range – 3 or 5-year – objectives and assign metrics for each objective. From the long range objectives, determine 1-year objectives and metrics. Finally, create quarterly objectives, metrics and assign accountability for execution.

No plan succeeds without follow-through and execution. Functional heads should leave the planning session with a clear set of departmental objectives and metrics. The next job is for them, based on the company plan, to create departmental execution plans.

· Focus on the broad vision and the key contribution that each employee can make to the plan.

· Tailor the message to the person, and work with each individual to create individual objectives that will support the company vision and execution of the overall plan.

· Limit the number of objectives for each person – three key objectives plus one personal development objective. Have each employee develop tasks that will support achievement of their objectives.

Once the plan is in place and has been rolled out through the company, conduct regular meetings to review progress against objectives, identify performance obstacles and solutions, and to reinforce the overall vision.

· Reinforce the overall vision and principle objectives in simple and direct language. Consistently repeat and reinforce the message. Publicly recognize individual employee contributions that support the effort.

· If you believe in open management, create and post large charts to track and communicate progress against key metrics.

· Stay on message with your direct reports, and have them do the same with their teams. Focus on their goals and contributions. Correct focus as necessary.

· Make sure that your words and actions are consistent and that both reinforce your vision and message.

Done correctly, an annual planning exercise is not only a healthy team-building activity for the company. It also provides a clarity that speeds response to environmental changes and competitive challenges as they arise.