Annual Strategic Planning: How to make it count and not waste time

TL;DR: Annual strategic planning can often be a time-wasting exercise full of whims, wishes, and well-intentioned goals that are rarely or barely achieved. However, with the correct approach, it can create clarity for your vision, engagement from your people, and confidence in your execution that ensures you will reach your goals every quarter and every year.

Table of Contents

1. Introduction
2. How to create a facilitated process that creates clear, actionable decisions and plans
3. Give your team time to reflect
4. Use the strategic planning process to gain clarity
5. Why you must engage your team if you want to deliver results
6. Conclusion
7. Offer: Download the Simplest Template for a Killer Strategy

We all have a tendency to drift year after year, creating more of the same with different colors and flavors with little thought as to why we're doing what we're doing. Annual strategic planning allows you to pause your humdrum approach and see a future that you may or may not be able to see today. It gives you a chance to reassess where you want to go and how you want to get there, including what “the there” looks like for your organization.

Section: How to engage your team in annual strategic planning when it’s never the top priority.

While you probably acknowledge the benefits above, you and your leadership team also probably view it as a waste of time. According to Bill Green, founder and principal of Affect Advisors, the number one myth about annual planning is that the senior leadership team “don’t feel they have the time to devote to it”.

I don’t believe that the leaders who say that even really think or believe that, but use it as an excuse to argue against it. Most likely, they have an aversion to those types of meetings because of the sheer number of bad strategic meetings they’ve been a part of and would rather skip them than allow themselves to believe it’ll actually change anything.

This type of experience is captured well by Benj Miller of The Benj Miller Collective, “Most organizations either spend too much time in the clouds or too much time in the dirt. It is important to go up to 40,000ft, but then make sure we come down, chop it up, build a plan, and make sure it is in the realm of realistic.”

It’s that coming down piece that’s often missed and the meeting ends up feeling like a lot of talk without the corresponding action to back it up. The flip side of that is a lot of activity without a clear direction.

Activity does NOT equal progress.

I’m going to show you how to make sure your next annual strategic planning meeting counts and leaves everyone feeling like it was time well spent and not a waste of time.

Step 1: How to create a facilitated process that creates clear, actionable decisions and plans

First, we need to establish where strategy fits in the overall guidance of an organization.

You definitely need to start with a big vision and most organizations have one. However, they’re often unclear and unattractive.

That might be because it’s driven solely by the founder or CEO, it’s focused on what Mark Hapeman of RevenueOps.co says is, “too much focus on revenue without enough attention to its impact on people, process, and profit”, or lacks a compelling “why” (more on that later), or there isn’t an easy way for all team members to find their role in the story of the vision.

When that is the case, there tends to be a lot of mindless execution either by a directive from the senior leadership team so that they look like they’re “making big things happen” to their peers and the CEO or by front-line workers because they want to make sure they don’t risk their paycheck by questioning leadership or appearing incompetent.

But, there’s no denying that execution is critical to moving any kind of organization forward.

We need a bridge!

That’s where strategy comes in. It helps translate all of that big vision into confident execution.

Let’s talk about how to build that bridge. (I’ll even share the simplest template for a killer strategy)

Step 2: Give your team time to reflect

Reflection has been cited as a vital part of growth for individuals and takes many forms. Some journal, some meditate, and others go out into nature without electronics. Whatever the method, the benefits are clear.

Your organization and your leaders aren’t any different.

In fact, long-time business coach and founder of Lean Leaders, Jonathan King, says that annual planning starts with reflection and connection. When I asked him about this, he said, “[Start with] Revisiting your long-range vision and purpose, ensure the leadership team is still aligned, then...Connecting your long range vision to your annual goals, and having solid 90-day objectives that create execution to get those annual goals accomplished.”

One of the things to reflect on is your Scoreboard from the last quarter and the last year.

Did you hit your targets?

What went well?

What didn’t go well?

What do you wish you had done differently?

Were your targets even realistic?

This is a simple truth that Andy Christiansen, founder of Capacity7, teaches his teams, “Realistic metrics. Numbers don’t lie. What’s measured matters!”

So, did what you measure actually matter, and did you shoot for the right targets?

Let’s talk about how you can create a better strategy, faster with a little thing called clarity.

Step 3: Use the strategic planning process to gain clarity

As you look forward to the new year, you’ll want to make sure you are looking through clear lenses and not rose-colored ones or a welders’ mask (you know, because it’s dark-tinted and narrow)!

There is a tool I use with clients from The System & Soul Framework to create their one-page business plan called the Road Map. (click here to download your free kit with a blank template, an example template, and a video guide.)

On the Road Map, there are 5 key elements that create incredible clarity. The first 4 help inform the 5th one.

Let’s look at those first 4, which are:

• Onliness Statement
• Destination
• Hedgehog
• Culture Equation

Your onliness statement is a single sentence that boldly answers the question, “what’s so special about us?!”

If you’re interested in diving deeper into its origins, then I recommend reading Marty Neumeier’s book “Zag”.

The Destination statement will likely look like your typical vision statement, but with one distinct difference - it answers the question of “why” you want to go to that big, beautiful future. Knowing your “why” is what’s going to keep you going when you’re in the grind, stuff isn’t going right, and you’re ready to quit.

It also creates space for every member of your organization to find their role in the story of the company.

The Hedgehog is a concept from Jim Collin’s classic business book, “Good to Great.”  In the intersection of answers to 3 questions lies your company’s unique power in the marketplace.

Those 3 questions are:

• What can we be the best in the world at? (aka where you are naturally gifted)
• What are we deeply passionate about? (aka what gets you out of bed in the morning)
• What drives our economic engine? (aka given the first two answers, it’s what you can make money doing)

The Culture Equation brings your core values off the wall and into reality. Most of you probably have core values but they aren’t “felt” or observable in your organization. Core values are your covenant in the chaos and they should cause you some painful sacrifices. Otherwise, they aren’t truly at your core - they’re only at your convenience.

Dr. Timothy R. Clark, author of “The 4 Stages of Psychological Safety”, says that you can either have culture by default or by design.

Once you have your core values identified, then you’ll write down what you want your culture to be. You’re going to reverse-engineer the experience everyone at your organization will have working there. A good prompting question is, “what would we want to repeatedly read in Glassdoor reviews?”

Now, you’ll add in the habits that the entire organization will commit to. These aren’t once-in-a-while activities. By definition, a habit is something that you do repeatedly.

At this point, you have the filters that will help you make the right decisions that will help you fill in the 5th and final portion of the Road Map - Bets.

Step 4: Why you must engage your team if you want to deliver results

It’d probably be fair to guess that you’ve heard of the 80/20 rule. If you haven’t, it’s a principle that states that 20% of anything [insert people, products/services, etc…) generates 80% of the results.

This often shows when the senior leadership team goes away for a retreat or planning session and comes back declaring the new plan and telling everyone what will be done and by when. However, those non-senior leaders, the other 80% of the company, have now been turned into helpers instead of contributors.

Something most of us, as leaders, know but often forget is this truth shared by Andy Christiansen, “if people weigh in they will buy in. Ask for feedback and see if they are clear where they fit in.”

And, if you’re convinced of that, but wonder, “how do I get my team to weigh in or tell if they are actually weighing in?” The answer might lie in this nugget from Jonathan King, “have vigorous and healthy debate/conflict during the goal-setting session. Quiet and unengaged participants are a sign of a lack of buy-in.”

It’s with that understanding that we can now talk about the Bets tool I mentioned just a few short paragraphs ago.

Bets are the key to confidently executing on your shiny new annual strategic plan.

They are a few essential pieces of information at the quarterly, one-year, and three-year intervals.

Each time period serves as a milestone along the way to the next time period with the three-year serving as a big milestone on your way to the Destination statement.

I want to clarify a few things about Bets before we talk about how to build them.

Bets acknowledge the UNCERTAINTY about the future. Admitting you don’t know everything isn’t weakness.

Bets show CONFIDENCE in accomplishing the plan. You’re willing to put your money where your mouth is.

Bets are NOT pie in the sky. Get your head out of the clouds and into reality.

Bets are NOT playing it safe. If your Bets don’t scare you a little, then they aren’t big enough.

If you’re clear on the qualities of a Bet, we can move on to what they look like.

The essential pieces of a Bet are:

• Revenue (in dollars)
• Profit (in dollars or percentage)
• Economic Engine in absolute numbers (connected to your Hedgehog)
• Objectives (3-7 depending on the time period and team size)

Objectives become a key part of Bets in that they clearly define success and progress. The components of a great Objective are:

• Key Results (when these are complete, the Objective is done)
• Pro Tip: turn each Key Result into another Objective for another team member further down in the Org Chart.
• 30-day Milestone (what progress will you SHOW to the other leadership team members 30 days from now?)
• 60-day Milestone (what progress will you SHOW to the other leadership team members 60 days from now?)
• What decisions can you make today that will accelerate your progress towards “done”?

This level of specificity will help you avoid the biggest mistake that Bill Green sees in strategic plans, being “too pie-in-the-sky.”

Now, you may want to check on progress more frequently than every 30 days. That’s why Mark Hapeman coaches his clients to, “maintain visibility into progress via a Weekly Sync or one-on-one with team members being held accountable.”

Once you have those filled in, you’ll have finally completed your Road Map!

You have a one-page document through which you can filter and align all decisions anyone in the organization needs to make no matter how big or small and trust that it’ll help you move towards your destination together.

However, you now need to socialize or share this strategy with your whole company. When doing this, Benj Miller recommends, “explaining why you are making the Bets that you are and how it ties back to your Destination and ethos as a company.”

Conclusion

Don’t let the fact that your Road Map is one page fool you into thinking that your annual strategy planning meeting will be an easy two-day retreat. In the words of Mark Hapeman, “It should be hard, even for a strong team. Strategy is your stretch which will require bold decisions, bold pivots, and bold leadership to execute successfully.”

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