Annual Planning: Empty Ritual or Executable Plan? Part 2

Make the most of your strategic plan throughout the year
by Carey Bettencourt, Jeanne Urich and Dave Hofferberth, SPI Research


In the first of a three-part series on the annual business planning process, we covered the typical challenges and failure points companies encounter. We also provided a successful approach to planning that is fact-based, encourages robust dialogue, and compels the executive team to create a realistic and measurable plan. The next step? Successfully rolling out the plan to the next levels of leadership and the entire company.

The first article of this series began with a story about a former colleague reluctantly traveling to his company’s annual executive team off-site. This professional services executive complained that the team’s energy and cohesiveness around its annual plans would quickly evaporate and the same organizational behaviors — working in silos and dealing with unnecessary conflict — would re-emerge.

Imagine if this executive team had gone through the facilitated process we described in last month’s article. These executives would have concluded the planning session not only with the energy and cohesiveness experienced in the past, but also with a realistic and executable business plan with clear goals. This team would be in the position to successfully roll out a sound plan to the entire company.

So, armed with a sound plan, how does the executive team effectively communicate and align the organization to successfully execute the plan?

Successful business plan rollout

Based on more than 30 years of facilitating change, we’ve found three strategies to be the critical success factors to organizational alignment:

  1. Gain next-level leadership and management buy-in.
  2. Create organizational action plans and key performance indicators that support the executive team’s business plan.
  3. Communicate the business plan and align organizational actions to the entire company.

These in-depth strategies will help your business rollout succeed.

1. Gain next-level leadership and management buy-in.

As part of the planning discussion, the executive team should outline and agree on the cascading communication and subsequent organizational leadership meetings that each executive will conduct to begin the rollout process. The purpose of these meetings is to have the executives present the business plan to their respective organizations, allow the next level of leaders or managers to openly discuss any concerns and ask questions, and coalesce the organization around a set of key actions that staff must perform to support the company plan.

In addition, each executive must share the basis for the plan, the compelling reason for the list of strategic initiatives and the importance of his or her organization’s performance in contributing to company goals. “Telling the story” will accelerate others’ understanding and acceptance of the plan and continue the development of a common understanding of the business and opportunities.

Each executive must not only actively demonstrate support for the plan but maintain a solution-focused approach when leading the leadership team through the organizational plan. It is important that the next level of leadership actively participates in the development of this plan and that individuals take ownership of assigned actions, agree on financial targets and key performance measures, and understand how the organizational objectives tie back to company goals. A collaborative approach to the organizational plan will yield the best results because the individuals and, collectively, the team will buy into the overarching company business plan.

Further, these leaders must be able to speak fluently about the company goals and how their organizations will contribute to overall company success. As the broader communication about the plan begins, alignment is critical.

2. Create organizational action plans and key performance indicators that support the executive team’s business plan.

In last month’s article, we stated that a common reason for business plan failure is notrapidly engaging the full organization in translating improvement plans into operational tactics and job-level objectives. So, whether yours is an embedded professional services organization in a software company or a stand-alone consultancy, establishing these specific organizational action plans and key performance indicators is critical to executing the overall plan.

So, how does the organization’s leadership create an effective action plan? Here is a recommended set of six steps to incorporate into the planning session.

(1) Confirm company goals and establish specific organizational objectives. Successful leaders and professionals understand a simple core concept: If you don’t know where you’re going, you’re likely to wind up anywhere. Your goal must be specific, and you must create a specific intention as well as very specific tasks or steps that will move you toward goal completion.

(2) Create measurable milestones. Once you have a clear picture of what you want to accomplish, as well as which targets you will need to hit throughout the time span of the project or period, the next step is to create measurable milestones.

(3) Develop detailed plan and tasks. Create the action items, supporting tasks and timelines to meet the milestones. Make the action plan doable by validating that all items support the overarching company goals; remembering that less is more; and breaking down larger tasks into small, manageable chunks. Assign one owner to each task and action — having multiple owners can be as disastrous as having no owner. Once you create the action plan, plot it visually and reconfirm with the group that each task has an owner to ensure someone has ownership and no one forgets it.

(4) Identify job-level changes. Review the organizational structure and each role to identify any potential performance barriers as well as optimization opportunities. Look at the job descriptions, performance criteria and compensation incentives, and identify any misalignment with company goals or organizational objectives. Ensure that the action plan incorporates the required changes.

(5) Identify which key performance indicators will measure progress. With the business targets set, the team must identify which KPIs it will use to measure progress. For most professional services organizations, typical financial KPIs will be revenue, profit and margins. However, if improving customer satisfaction is a goal, then include measuring satisfaction in the list. The satisfaction rating obviously varies based on the firm’s methodology. Also, growth metrics for key targets may be valuable. Translate these KPIs into group and individual levels. Include utilization metrics and billable revenue metrics to support overall PS financial metrics.

(6) Prepare for company and organizational communications. Develop a consolidated plan and presentation for the entire company so that management can broadly communicate it. An overall company presentation at an annual kickoff meeting is highly recommended to effectively launch the plan.

3. Communicate the business plan and aligned organizational actions to the entire company.

Now it is time to bring everyone in the company into the fold and present the annual plan, initiatives and organizational impact. As stated already, we recommend conducting an annual kickoff meeting to communicate the plan. At this kickoff, the company leader should present the overall company plan followed by each organizational leader’s supporting plan. To make the most impact on the organization, make sure that the goals and plans are clear and that an individual contributor can easily link his or her efforts to these goals.

After all, the question that each person will ask is, “What’s in it for me?” The presentation must be easy to follow, and the business plan and goals must be compelling and motivating for everyone.

After the kickoff event, we highly recommend distributing a monthly company communication in some form to maintain consistent communication and report progress against the plan.

Outcome of a successful business plan rollout

Alignment and communication are the cornerstones of a successful business plan rollout. When the executives are aligned and actively support the plan, the next level of leadership and management is engaged in plan development and communication, the entire staff is presented with a clear business target and road map, and the company is well-positioned to achieve its business goals.

In Part 3 of this series, we will discuss monitoring, measuring, managing and adjusting the plan to achieve the targeted company goals and organizational objectives.