How to free the dreaded annual planning process

October 29, 2020

By Martha Sullivan, CPA, CVA/ABV, CM&AA, CEPA
Partner, Succession Planning Practice Leader

Martha leads HK’s succession and exit planning services division and is a regular contributor to Wisconsin’s InBusiness digital magazine.

It’s the time of year when many companies head into their planning and budgeting season. There is always a tension that accompanies this process. There is the tension between the known and unknown, scarcity and abundance, short-term and long-term, and finally, the tension of “who has time for this?”

In this regard, 2020 will be no different. The planning exercise is guaranteed to be fraught with tension. However, there are ways to combat the stress and tension that comes with the season.

There are five ways I have found to make the process easier, including:

  • Commit to doing it with an open heart and mind;
  • Free the elephants;
  • Strike a balance in your commitments;
  • Align your team; and
  • Honor your systems.

Commit, with an open heart and mind

It’s too easy in times like now to throw up one’s hands and shrug “Heck if I know!” Far too many business leaders and owners use this mental state as an excuse for not committing to a planning process or a plan itself. This is, frankly, a chicken’s way out. And yes, if you’re one of these leaders, I did just call you a chicken.

Of course, you don’t know. Nobody has the crystal ball. If you did, you would be an all-knowing superhero. The real superhero leader facing the annual planning adventure has the wisdom and tenacity to counter their hesitation with “But what if I did know?” She opens her heart and mind with courage and makes key assumptions. He recognizes that the assumptions will need to be watched so he can stay agile. They, with their team, persevere and develop the plan. To quote Nike, they “Just do it!”

Free the elephants

Think about the annual planning discussions you’ve had in the past. In addition to your colleagues, how many elephants were trapped there, sitting with duct tape over their mouths in the room? Everyone knew the stoic beasts were there but, other than some well-timed sighs and eye-rolls, they remained silent.

I’m all for maintaining an acceptable peace in the kingdom as long as that peace allows the elephants to be free to roam into and around the conversations. In fact, I believe that this year, in particular, the elephants need to be recognized, called out, and have their moment to be discussed. Especially the sacred ones.

There isn’t a company on the planet that is elephant-free. Nor is there a business on earth that can afford to be complacent in 2020. Create your safe space with your team. Give permission to identify the issues and talk through them. You may discover that the elephants can lead you to new ideas, solutions, and paths.

Strike a balance

There’s so much to accomplish in one day and nothing highlights this more than when we pause to work on the health of our business and plan for the next year or two. While you, your team, and the elephants may compile a hefty list of initiatives, narrow it down to the top three to five priorities. If you’re doing longer term planning, scale back the definition of long-term. The most I would recommend for “long-term” planning these days would be two to three years.

In adopting a more abbreviated approach, you will accomplish three very important things. One, you will have a more manageable way to think about the issues, forecast potential outcomes, and develop a doable plan. Secondly, you’re acknowledging the fact that we need to remain agile right now. You’re not taxing the process by artificially extending the time horizon to come up with assumptions and plans beyond the scope of realism. Lastly, by committing to no more than three to five big, achievable goals, the work itself becomes more manageable. Translate these initiatives into your budget and then convert it into a 13-week rolling cash flow.

Align your team

The strength and cohesion of your team has rarely been more important than it has been in 2020. As you develop plans for 2021 and beyond, your team alignment should stand out as an asset rather than a landmine in the plan. Is everyone on the same page? If no, explore why not? It’s better to work this out in the planning stage than in implementation.

What is the root of the different opinions? Anyone hearing the trumpet of an elephant? How should the team gather information to bridge gaps and foster a common direction? How much of it is substance versus style? Craft your path for coming together to move forward.

Honor your systems

Recently, I had a conversation with a business executive about her planning process. She shared that her company had done strategic planning in the past, including the discovery process of identifying their strengths, weaknesses, opportunities, and threats (SWOT). The SWOT analysis is a vital part of any planning process because it sets out where you are today relative to what you want to accomplish in your plan. When asked about this year’s efforts, she sighed and said, “We’ve been ‘SWOTed’ to death.”

That points to a team that is well-meaning and simultaneously not honoring their systems. The most effective teams leverage the planning process to its fullest by building in the systems and disciplines to honor their investment in their efforts and collective work. If the SWOT work is done but it doesn’t lead to the creation and implementation of a plan, it is a waste of time and everyone know it. If the plan is adopted yet people aren’t held accountable to doing their part, frustration builds and more elephants are born, trapped, and taped.

Systems determine performance. Period. It’s important that you honor your people by honoring your systems.

The annual planning and budgeting process can be challenging. It demands time and focus with a big heap of organizational effort to make it worthwhile. I’ve been through and led the process many times and am here to help if you would like to chat. Don’t let all the uncertainty facing us in the rest of the year and into 2021 stop you. Take back your power and do it. Like the elephants, it may set you free.

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