Do You Have An Annual Operating Plan?

I can’t believe its’ Septemebr already. Next year is just around the corner. Do you have an annual operating plan? Put another way, do you have a plan that goes beyond setting departmental budgets? In my experience, organizations that don’t have a true annual operating plan in place by December 10th of each year perform at a lower level than organizations that do.

I have worked with many organizations and, as unbelievable as it sounds, many simply do not put time an energy into establishing an annual operating plan beyond some form of budgeting process.

The best companies build annual operating plans containing 4 components:

Reinforcement of mission and values.
Why we exist and who we are.
Confirmation of the short-term vision.
Where we are going – usually a 3-year look.
Clear articulation of 3 – 5 core goals for the current year.
What we want to achieve “now.”
Establishment of 10 – 15 key objectives.
How we will achieve the core goals.

That’s not complicated and, if done properly, it builds alignment throughout the organization. Now, it can also be over-done which leads to confusion and complexity – but that happens much less often. The typical situation is that the organization is so busy with the “here and now” that they cannot or will not intentionally make the time to actually plan.

How much time does it take? Typically 3 full days over a 45 day period. Here’s the calendar I use and recommend to clients and colleagues:

– October 15th: Kickoff – creation of 1st draft (Full day)

– November 1st: Review – discuss 2nd draft (half day)

– November 15th: Ratification – agreement on goals and budgets. (2 hours)

– December 1st: Roll-out – presentation to entire company by the Senior Team (2 hours)

The rest of December is finishing the current year on a high note as holidays and seasonal distractions pick up speed amidst the business of closing the year strong.

In the coming weeks I will take you through the simple steps to gather your staff and build a compelling annual plan that will align your team and prepare you to ave a great year.