How To Land An Annual Plan With Your Team - Part One

  • Annual Plan Checklist
James Adams

What Is An Annual Plan

Quarter four is a great time to reflect and celebrate our successes in the past year. I am sure, no matter what the climate has been, there will be something you and your business should be proud of over the previous three quarters. Of course, in business, nothing ever stays the same and now we must look to the future. What is the next success, the next improvement project, the next big win. Ultimately, what is the plan. We can outline this with, you guessed it, an annual plan.

An annual plan takes into consideration all of these questions and pulls it together into next years strategy document. It will generally include:

  • This years financials, outlooks to year end and bridging financials to the end of next year.
  • Details around these bridging financials and the action plan to get there, with a sales focus.
  • Marketing, Product and People strategy for the next year.
  • Major projects expected within the business.

This is all great information, but in my opinion, the real key to a truly successful annual plan document is how many people read it,  add to it, discuss it and believe in it. Here’s why.

Setting The Vision

The job of any great leader is, at its core, very simple. It is to ensure the team around them have the tools and focus to deliver the next business success. A great leader facilitates progress. Correct? That focus comes from defining where we are today (financials for the end of the year, structure etc.) where we want to get to tomorrow (next year end financials, major project results etc.) and how we are going to get there – this is the where an annual plan comes into its own.

An annual plan shouldn’t be a document produced solely for the management team to refer to. It should be a living document that employees can use to understand and see how they are needed to deliver these next steps.

If we make our teams feel part of the future and that their involvement is needed, we create a sense of belonging and obligation to delivering these results.

The Annual Plan is created to set the vision, the targets and outline the vehicles for delivering the next phase of business iteration. It is a living, breathing document that should be understood, embraced and discussed by all members of the business.

Areas We Will Focus On

If you are looking for a post that outlines, “what to include in a strategy planning document” – this mini series isn’t for you. You can check out a list of items to include in a strategy document from Forbes. Whilst undoubtedly interesting and certainly useful, I personally don’t agree that every element needs to be in every strategy document. After all, we need to articulate this vision across all levels within our business. As always, keeping complex ideas as simple and concise as possible is a winner here. We can save the trudging strategy speak and executables for each individual project, if we really must have them.

In this series, the focus is on how to make this document accessible and relatable. It will cover:

  • Finances – keeping the numbers simple and the bridges crossable. 
  • Creating Buy-In – opening up the planning process for all to take part (Part 2)
  • Organisational Alignment – delivering an annual plan and reviewing it in an agile manner. (Part 2)

If You Only Takeaway One Thing

If your annual plan has been a secret of the boardroom, compiled in darkened rooms alongside closed door conversations, then it probably hasn’t landed well. Creating a disconnect between certain levels of the business that can manifest in micromanagement of projects and individuals.

Of course, some conversations may need to be had and certain elements omitted, but by and large, an annual plan should be something celebrated and delivered to your wider teams. Preferably, including them in the preparation.


Annual Plan Finances

Keeping The Numbers Simple

If you want to lose a room, really quickly. I have a way to do it. Without bringing your team on the journey of understanding conversion costs, material margins, return on sales, start talking about these numbers. It will work like a charm. Why you would want to do that though?

In our last post, we talked about how making the annual plan a living and interactive document yields tangible results. In this post, we will talk about making the financial element of the annual plan accessible and informative. Keeping team members on board, but also delivering value.

Work Behind The Scenes

Of course there will be a huge amount of financial work behind the scenes. After all, bridging financials should be the very basis of target setting – we don’t necessarily have to send the entire bridging pack through to every member of the team, nor explicitly detail individual account movements through phasing changes and increases. Each action within the annual plan should have a financial ramification, be it negative due to it being a medium term investment, or positive as the revenue lands this year. Whilst financial diligence is a foundational key to excellent annual planning, the key to a good annual plan is delivering it in a worthwhile manner.

Keeping Delivery Simple

In order to keep entire teams, many of whom are not financial experts, engaged with finances is no easy task. So now your bridging financials are done. All areas of the business is rolled up and you have signed off on the annual plan. It is time to deconstruct the component elements and make them directional and understandable for the rest of your teams.

Here are some guiding principles for delivering that detail.

Keep it to the headline

It’s really easy to get bogged down into the numbers and phasing and profitability, but keep it to a headline. If an account has a new product line, spell out what the revenue growth is over the year. It really can be as simple as, “We are bringing in product X to support customer Y. This is really important to us as a team because over the year we are expecting £XYZ revenue growth from this product into this customer, allowing us to ABC. You can support in ensuring we deliver this by ABC”

In this example, what we have done is kept the numbers simple, relayed what the target is, moved to explain why it is important and then dissolved it down to how an individual is part of this success. The financials are there, and it is accessible on a granular level.

Don’t shy away from more complex theory, just explain it.

If you are on an efficiency drive, or a major project will increase profitability, don’t shy away from the theory. You can include it, but keep it relevant. If for example you are changing supplier of packaging, explain the theory of it.

“Our current supplier costs mean that our variable costs, a cost associated with each additional sale, for packaging, are at 8% of the total sale. If we can reduce this down to 6%, which we think the new supplier can do, that means we have 2% extra profit from each additional sale. That 2% means we can reinvest in XYZ. We need your support to deliver this cost saving, as we know switching suppliers will, in the short term be a change of process and relationships”

Roll it up.

At the end, roll it all up and explain the direction and reiterate how every team member can support. “Over the next year, we are looking to increase our revenue through the plans outlined by £XYZ, that means we will deliver £ABC more profit. We need your support in the following areas… so we can all deliver….”

Rolling everything up is a great way of bringing the entire team together, but also creating empathy between departments of their goals too. Creating a focus every team member can be a part of.

Until Part 2

We hope you enjoyed part one of this blog - stay tuned for part two where we discuss creating buy-in and organisational alignment, where we turn the annual plan from a strategic document, into the reference document for teams that truly understand and can articulate their future.

This blog post was originally published on the Akcela - Management Consultants Norfolk and Cambridgeshire website.


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