*Annual Planning: Strategic Steps That Could Save Your Business

Annual Planning: Strategic Steps That Could Save Your Business

By Gary Lockwood

Entrepreneurs too often procrastinate the task of annual planning. It seems like such a daunting task because we imagine annual planning as a huge, time-consuming, difficult chore. Yet planning can be quick and easy. And it’s an exercise in strategic thinking that helps you remove uncertainty, avoid surprises, pull your team together, and save time and money.
Here’s a simple five-step planning process that can be done in a day or less. You’ll need a few hours of uninterrupted time (best if done in only one or two sittings), so block off one day or two half-days. If you work with a partner, spouse or key management team, participate in the planning process together.

STEP 1: Evaluate your business
First look at what’s important to you and decide where you’re going. Define your prime purpose. This is what strategic thinking is all about. For this step, identify five or six key areas that are important and essential for your business—cash flow, customers, employees, image, growth, productivity and so on. Write them down. These are your organizational values.

In each of these areas, develop a crystal clear vision of where you’re going. What’s possible? What does it look like when you live up to your best expectations in each of these areas? Describe, in writing, what it looks like and feels like when you reach your expectations in each key area. This represents a picture of your future as you prefer it to be.

If you articulate a clear vision of your preferred future, focusing on those areas that are important to you and to your business, that vision becomes your destination. That clear vision allows you to set goals that will move you toward your preferred future. That vision provides motivation, energy, purpose and direction.

Starting with a clear vision of what’s possible helps you answer the question you must ask yourself each day—why am I doing this piece of work and is it taking me where I need to go?

Step 2: Make choices
This process includes telling the truth about your current reality. First, identify your greatest area of need. Where can you make the most definitive progress this year? To do this, rate each of the organizational value areas on a scale of one to 10, where 10 is wonderful and one is lousy. Rate each as to how well you’re currently living up to that value when compared to your vision of your preferred future. If you’re doing this as a group, have each person describe his or her rating.

Step 3: Establish priorities
Use the completed ratings to select one or two areas where you have the greatest opportunity for improvement. Where is your greatest dissonance? In which value area would improvement translate into significant results? Which value area shows the largest gap between your preferred future and your current reality? Select one or two value areas as your priorities.

Step 4: Develop the action plan
You must get clear about who will do what and when. Start with brainstorming. Imagine all the possible actions which could move you toward your preferred future in the one or two value areas you’ve selected as priorities. Be creative here. Don’t limit yourself to what you’ve always done or you’ll see the same results you’ve always seen.

After you create a list of possible action steps, group them into categories such as marketing, communications, facilities, employees, etc. Usually, three to five categories will suffice. Now, go back through each action item in each category. Assign a person to be accountable for that action and determine when that action item will be complete.

Step 5: Implement the plan
Your plan has little value until you act on it. Each person must have a clear understanding of his or her individual accountability. If you’re a one-person company, you must get clear on how you will accomplish your assigned tasks. This may include blocking off some time each week to concentrate on your action items.

Once or twice a month, review your progress. What’s getting done? What’s not getting done? Examine action items that are being pushed back. Either break them into smaller, easier tasks or decide explicitly that you are not going to complete a specific action item.

The payback for strategic thinking and planning comes in your ability to withstand the whipsaw of change. An enterprise grounded with a clear direction and a plan to get there will have a focus on what’s important and the flexibility to respond to new opportunities.

Gary Lockwood is a business coach for entrepreneurs and professionals. He can be reached at 800-272-1575 or by e-mail at gary@bizsuccess.com.