top of page

7 Essentials for Successful Annual Planning

How are your plans delivering this year?  Are you looking forward to that big bonus payout?  Or is the market tough and you're worried about missing your numbers?  And how close to the annual plan you agreed last year are you going to come in?  Now is likely a good time to think about a different approach this year...

Most companies start annual planning in June / July, however, we are now getting to the business end of the process where plans are set and then discussed with customers.  In fact, much of the earlier work is merely positioning, posturing and collecting data.

So you probably have a vision with goals and some sort of plan and it would be useful to understand what’s best practice.  From working with many of the world’s leading companies, who all do annual plans of some type, there are several common factors to building a plan that will be achieved.

1. Understand the other party’s aims, plans and process.

It’s amazing how many times I hear that “they have a plan for x growth, but we’re going to commit them to y”.  You must understand what they are really going to aim for and commit to.  If they commit one number to you and another internally I’m certain which they’ll be focused on if things get tough.

2. Get Honest, Open, Realistic

Building on the first point, if you are honest with each other early then success is more likely.  If you have different aspirations discuss that.  And the implications.  If you carry on regardless and hope for the best you are likely to be sorry.  It may be tough, but is essential.  And if you can’t get to honest conversation then at least you know where you stand and can plan contingently (see below).


3. Prioritize

How many times have I seen a plan do the rounds with each reviewer adding in things so everything becomes a ‘priority’?  Strategy is about choices: so select a few things that are essential and if done well will ensure (or at least give you a great chance of) success.  Focusing on ‘3-5 keys’ is plenty, is memorable and manageable.


4. Contingency Plan

“No plan survives contact with the enemy” – Field Marshall Moltke.  The other side are not usually the enemy, you are facing them together, however, we all work in a dynamic market and things will change.  Be prepared.  For example, if you have had a supply chain issue each of the last three years, plan for one this year.   And if all runs smoothly you’ll have upside.

5. Ensure Buy in

You may have a beautiful plan that is focused, well written and meets your goals as well as the other party’s stated aims.  But if your team, your internal stakeholders and your customer or supplier fails to buy into it then it’s not worth the paper it’s written on.  Points 1-4 should help, as well as ensuring that you fully involve those who will need to sign off and deliver the plan.  Take the time as this is as important as anything in your success.

6. Manage Expectations – firmly

The advice “under-sell, over-deliver” is well used and can be taken to extreme.  In annual plans it is definitely worth keeping in mind.  With contingency planning your plan can be achieved, and hopefully beaten, rather than knowing that everything must go right and luck be firmly on your side to hit what you’ve promised.  People want certainty, so heed the adage.

7. Review

Moltke was right.  Things will change – sometimes positively too - so you must be ready to react.  Clear measures, which are timely and accurate must be in place.  Honesty must remain for the review so that both parties understand the situation and how you are going to course correct.  And of course the revised plan must utilize points 1-6 too.


If your plans have worked…just.  Or if they aren’t looking good this year, then perhaps one or more of these principles may help.  You may think you have heard it all before, but ask yourself if you really adhere to them.  Have the courage to.  If that’s tough in your organization, then look at alternative angles to influence your plans.  Stakeholders usually want that certainty and appreciate authentic honesty up front rather than surprises later.

bottom of page