Working on Our Annual Plan
A goal without a plan is just a wish
Antoine de Saint-Exupéry
The Third Quarter of the Year is just starting. It's time to recap the achievements of this year, the unmet goals, the new needs, and what we want to achieve in the near future. We need to work on our annual work plan for successful next Year.
An annual work plan is a simple document that summarizes, in a few sentences, the objectives we wish to achieve with our venture over the next 12 months and specifies the proposed plan for those objectives to become a reality. This annual work plan is different from the Business Plan, which is the general plan for our venture and establishes the vision and overall guidelines. In contrast, the Annual Plan is a short-term plan and is specific.
Of course, the annual work plan must be developed based on the concepts defined in your Business Plan. The annual work plan allows you to see how close or far you are today from the vision you defined and what you can do in the next 12 months to get closer to it.
Find Your "Happy Place"
When preparing your annual plan for the coming year, it is important to set aside specific time for this task. At least one morning or a full day. I suggest that when you sit down to think about your plans for next year, you try to allocate dedicated time entirely for this task, without interruptions.
Whether you work alone or with a team, it's advisable to change your routine space and avoid interruptions. The idea is to concentrate on the task and make it inspiring. For example, it could be somewhere in your office or home, a park, a café, the beach, or the mountains. There are no restrictions or limits. Just find a place that makes you feel good, without tension, and that is different from your daily workspace. Look for a place that makes you happy and comfortable. Any place, open or closed, that allows you to relax, concentrate, and be free of discomforts.
Visualization
Before you begin writing a plan, take time to visualize where you are and where you want to be. Whether you are doing the exercise alone or with several people, it is equally important not to skip this phase.
The idea is to answer two questions with this exercise:
What have been your achievements this year that is coming to a close?
Where do you want to be by this time next year?
There are many resources you can use to inspire this reflection:
To gather your achievements:
Make a list of the things you are grateful for in your business and personal life that have occurred or been achieved in the past 12 months.
Prepare a brief fictitious speech of recognition that you would give to your venture if it were winning the award for business of the year.
To visualize the company in a year:
Pretend you are in a time machine. You get into the machine and are exactly one year ahead. Write a letter to your current company telling it what has changed in this year.
Create a Vision Board. This is an exercise where you visually identify elements that show you the dream you want to head toward. If you are good at drawing, you can do it that way. Alternatively, you can use various visual resources like magazines, photos, or even do it digitally if you prefer. The artistic quality of the result really doesn’t matter.
Personally, I like to develop a Vision Board, and it’s very useful to me. I make one that includes my different personal and professional projects to visualize how they intertwine and interact with each other. Usually, I have this image as the Start Image for my iPad, so I get to see it almost every day.
The goal of this type of exercise is to help you loosen up your mind and, through play and light tasks, list the things on your mind that you might struggle to verbalize.
Analyze Your Business Environment
Your venture is not isolated. It operates in a market. In your Business Plan, you must have defined what your market is.
The thing is market is a dynamic entity. Things happen every day that change your chances of competing successfully. Therefore, it is important to take a look at the current and future situation of your market.
What is happening in your market currently, and what is expected to happen in the next 12 months?
Think about economic changes that affect your market and target audience, current or potential changes in your competition, and trends that affect the category in which your product or service competes. Anything external to your company that is out of your control but could affect you in the next 12 months. Analyze which of these changes are permanent and will be part of your environment's future at least for the next year.
Planning
Now that you know where you want to go, it’s time to establish the plan. Because visualization alone does not work without a plan.
The prettiest Vision Board is meaningless if you don’t establish a work plan to get there.
So the most important part of this exercise comes now. It’s time to get to work.
For this phase, you should define:
Three or four basic objectives to achieve in the next 12 months.
Changes or adjustments you need to make in the company or in yourself to reach those objectives.
Resources (financial, human, or technological) you require, in addition to your venture, to achieve the objectives. Don’t forget to indicate how you will obtain those resources.
Critical success factors. These are the things you need to consider or ensure happen for the objectives to be achieved. In summary, it’s about defining the events or circumstances that must be met for the objectives to be achieved. Those that, if they fail, will prevent success.
SMART Objectives
I’d like to take a moment to talk about objectives to ensure you set annual objectives that you can realistically achieve.
First of all, keep in mind that this is not about making a wish list of everything you want to do. It’s a rational plan of objectives that constitute priorities at this moment and bring you closer to your vision.
Try to define between two and four main objectives for the next year. If you have more than that, make an effort to group or prioritize them so that you select no more than four.
There is an approach to working with objectives that I find extremely useful and attractive, and I think it can give you insight into how to complete this section. It’s about SMART Objectives. This term was first used in 1981 in an article in Management Review published by George T. Doran. SMART is an acronym and refers to objectives that have the following attributes:
Specific
Measurable
Achievable
Realistic
Time-bound
If you set about 3 or 4 priority objectives that are very specific and meet the SMART criteria, the chances of achieving them within the set timeframe increase.
Turning Dreams and Wishes into Achievements
As the phrase by Antoine de Saint-Exupéry in the sub-title of this article indicates, it is not enough to set objectives. For them to truly become reality and transcend being a simple "wish," we need a plan that shows us the path we must follow to achieve them.
Hence the importance of the other elements of the annual plan: Changes or adjustments you need to make in the company or in yourself, the resources you require, and the critical success factors.
It is important that the objectives within your plan relate to your Business Plan, your vision, and the essence of your venture. They must be coherent with one another. It’s not about listing a set of isolated goals, but developing an integrated plan that, working together, will lead to the achievement of the vision.
Work plans are not only annual. You can, if you prefer and if your market is very dynamic, work with shorter-term objectives, like quarterly, four-month, or semi-annual plans. It depends on your business, your market, and how quickly the environment evolves.
Monitoring and Updating
Once you get used to continuously making these plans, you can (and should) use this year’s plan as a tool for evaluating achievements and as a basis for the next period’s plan.
It is also important to develop some tool that allows you to continuously monitor the fulfillment of objectives, so that if you are not meeting them within a reasonable timeframe, you can always make adjustments along the way. For example, if the objective is to increase sales in a specific timeframe, you should continuously monitor sales and check the trend and growth rate.
If your objective is a 10% increase in the first quarter and at the end of the first two months you have only grown by 2%, it’s unrealistic to think that this objective will be achieved. In that case, you must either adjust the objective or implement stronger and more drastic actions to force the achievement in the short term.