The annual planning process at some companies can become a mere formality, with little divergence in goals or methods from year to year. Needless to say, taking this approach can lead to suboptimal outcomes, especially given the rapidity with which business conditions can change in the internet era.
To maximize results from the yearly planning process, a comprehensive review of your goals and approach to meeting those goals should be performed. Following are six tips for performing productive, proactive annual planning.
Establish Achievable Goals
Be careful about being excessively optimistic when making plans for the coming year. While aiming high is an admirable trait, if carried to extremes when making annual plans it can be counterproductive. This is because setting unrealistic goals can prove damaging to company morale when the goals aren’t met. Especially in a firm which is growing rapidly, enthusiasm can lead to setting overly ambitious objectives.
To gauge how realistic your goals are, model them against your company’s past performance and the performance of industry competitors. For instance, if a plan calls for annual revenue growth of 25 percent, but the company’s best previous year’s growth rate was 18 percent, and the industry average is 10 percent, there would need to be a very persuasive reason to believe such an objective was realistic.
Make Determining Goals a Team Effort
Your company will only succeed if your staff as a whole works together to achieve the company’s objectives. Involve your team members in setting objectives to boost buy-in and increase employee engagement. Even if the overall goals have been selected by company management, solicit suggestions from your team as to how best achieve the chosen goals, team collaboration on projects could be the key to success. You can assign various parts of this task to the employees whose skillset makes them most knowledgeable about a particular process.
The greater the level of transparency associated with the process, the greater the level of buy-in you are likely to create within your team. Involving your team in the process from the start also helps save time by giving you relevant feedback early-on in the process. This can help you overcome any issues more rapidly than if they were to be encountered at a later point in the process.
Align Yearly Objectives to Key Company Goals
When specifying objectives for the coming year, it helps to focus first on the company’s overall goals. Once these are identified, they can serve as a starting point for determining the company’s yearly goals. For instance, if one of the company’s main goals is to gain market share, you can set various yearly goals aimed at helping it achieve this objective, including:
- Design new and improved products
- Launch a marketing campaign
- Investigate forming a strategic marketing partnership
The same process can be applied to the company’s other strategic goals, such as improving gross margin, diversifying revenue mix, and boosting revenues, among others.
While the company’s long-term objectives should help drive selection of yearly goals, these overriding goals should be subject to analysis as well. One area to analyze as you strategize over yearly objectives is whether adjustments need to be made to the company’s overall approach. The importance of this can be illustrated by the examples of numerous firms throughout the years that have not adapted well to changing market conditions. In many of these cases, firms whose primary product or market changed substantially resisted altering their products or approach in response to these changes, leading to declining market share and, in some cases, eventual bankruptcy.
Include Employee Training in Your Plan
Achieving company goals can be made significantly easier if your staff is well trained in the skills necessary to do their jobs. To ensure that this is the case, include time for any necessary employee training or development in your annual plans. If your plan incorporates new ventures or endeavors, new training programs may be necessary to enable your employees to effectively perform the duties required to successfully launch these efforts. Turn employee training into a pylon of your company’s business culture.
Make sure to position employee training strategically in the yearly schedule. Training should occur long enough before a new initiative starts to enable employees to adequately perform their duties when the project launches. Ongoing endeavors may require the scheduling of training sessions as well in order to maintain or improve employee skillsets.
Think Outside the Box
While it may sound like a cliché, it is nevertheless valuable to consider a number of alternative or innovative approaches to achieving and setting goals. With the advent of the internet era, modern business practices can change rapidly as new technology or methods come to the fore. As you consider your yearly plans, take into account new ways of doing things and how they should play into your strategy when it comes to making annual plans.
Include a Technology Review
Given that technology has become crucial to business success even for companies that don’t primarily provide technology related products or services, performing an annual IT analysis can pay dividends. Having either your company IT experts or outside consultants evaluating the performance of your IT system in the context of your current and expected technology needs allows you to make any changes necessary to stay competitive.
Even if your system seems adequate currently, developments in technology can occur rapidly, negatively affecting your company’s competitiveness if you don’t keep up with the latest products and practices. A yearly review helps to make sure your firm stays on top of the situation and keeps its IT system competitive and up-to-date.
Provide Step-by-Step Goal Breakdowns
Major goals often require that several steps occur before they are achieved. It can be misleading to list a single goal when in fact that goal requires the accomplishment of a variety of different sub-tasks beforehand. Thus, you should list the various major steps which make up a major task rather than just the major goal alone.
For instance, a company looking to expand into a new market might outline the following steps to achieve this goal:
- Research market size
- Identify major competitors
- Perform a cost/benefit analysis to determine if the expansion is worthwhile
- This analysis may include a cost/benefit analysis of hiring sales staff versus partnering with another firm for sales purposes
- If a decision is made to expand:
- Establish marketing, production, and product support budgets for the expansion
- Establish a launch date
Nuvro is a robust online project management tool that helps streamline any planning process. With Nuvro you can gain control and peace of mind over all of your projects, tasks, team members, workload and everything else important to your company. In addition to the project, task and collaboration features found in most PM tools, Nuvro also provides a company dashboard, a team dashboard, team member performance reviews, secure document management, an internal alternative to email and more. Nuvro is perfect for busy teams looking to accomplish more. Learn More…