Although it happens every year, annual planning can still feel like an uphill battle — especially if you don’t set yourself up for success with the right strategy. Jumping in without proper preparation can leave you spinning your wheels and getting nowhere, wasting precious time before the new year sneaks up on you. 

But if you take the time to review your team’s performance over the last year, it’s much easier to identify what worked (and what didn’t). By arming yourself with these critical insights, annual planning can actually become something you look forward to instead of putting off. 

What is annual planning?

Annual planning involves assessing your learnings from the current year and using them to develop a clear strategy for the year ahead. Doing so gives your team an opportunity to reflect on what they accomplished, what went wrong, and incorporate the insights into future plans. 

What should my annual plan include? 

Fundamentally, your plan should include: 

  • Goals for your team 
  • Strategies behind those goals
  • Tangible deliverables your team will work on 
  • Milestones that mark progress towards your initiatives 

Going further, your plan should lay out the essential components of how the work will be completed, as well as context for why you believe in the plan you built. Some of those components can include: 

  • Previous year reports: A strong annual plan is based on data from last year — it provides context for what your team has proven to be capable of in the past. 
  • Estimated budgets: This gives your team context for the amount of resources that will be available to support their initiatives. 
  • Clear goals: You should use a goal framework (options listed below) so your team can measure and report on progress. 
  • Milestones: In order for your team to successfully accomplish their goals, they need to know how they’re doing. Your milestones should work as checkpoints that give your team clarity on how they’re pacing against the annual plan. 
  • Contingency plans: Things don’t always go as expected, so it’s best to have a plan in place so you’re not caught off guard. Build a plan for getting back on track when roadblocks occur.

When should you start annual planning?

If you have the bandwidth, you should begin your annual planning process before the year ends so you can jump right in as soon as the next year starts. It’s best to start planning during Q4 so you and your team can make the most of Q1. 

Starting as early as possible gives you a chance to get it done before entering the year-end rush and the stress that often comes with it. 

5 steps for mastering annual planning

As you gear up to start planning for next year, use these six steps to optimize your process.

1. Analyze last year’s performance 

Before any planning starts, take a moment to review how your team performed against last year’s plan. Use the annual goals you created previously as a benchmark to set realistic goals for next year. 

Is your team consistently crushing the goals you set? Maybe it’s time to set them a little higher. Are you seeing frequent misses? Consider evaluating whether or not you were too ambitious or if you need to implement new strategies to hit those marks. 

2. Identify your desired goals 

Take a look at your long-term strategies for the next three to five years. What do you need to focus on in the next year to make the right steps toward accomplishing that? Make a list of the initiatives your team should focus on to bring you closer to achieving your strategic plan. 

Once you have those initiatives in place, turn them into an actionable plan using a goal framework. You have a few options in terms of which goal framework is best for your company, but a few popular methods include: 

  • Objectives and Key Results: This method requires you to set goals using the “I will [objective] as measured by [key result].” 
  • SMART goals: This framework helps you ensure your goals are specific, measurable, achievable, realistic, and time-bound. 
  • Key Performance Indicators (KPIS): KPIs use leading and lagging indicators to track performance towards set goals. 

3. Build an actionable plan 

Once your goals are outlined in step 2, it’s time to create an action plan. This plan should clearly lay out the steps you and your team will need to execute on to achieve your goals. It’s almost like a map that will help you get to your desired destination. 

Then, take the work included in the action plan and delegate it to your team. Be sure to connect the work to the bigger picture of the company — doing so will make it easier for your team to see the impact their owned initiatives have on the business as a whole, motivating them to meet the goals laid out in the plan. 

4. Clearly communicate the plan

Now that you have a step-by-step annual plan that lays out how to achieve all your goals, share it with the team. However, it’s important to remember that you can’t just tell your team the plan — you need to explain the journey of how you got there and spark excitement about the initiatives at hand. 

Even if they weren’t included in the actual planning process, give a presentation that shows why the plan matters and how everyone will contribute to achieving the goals. 

5. Execute, monitor, adjust

You may have completed your annual plan, but that doesn’t mean it’s set in stone. As you start working towards progress in the new year, keep a close eye on your KPIs and other success metrics you’ve put in place. 

If your strategy isn’t producing the results you’d hoped for, adjust your plan accordingly to ensure your team can hit the annual goals. 

By setting annual plans and goals, you give your team the tools they need to prioritize work and set themselves up for success in the year ahead. And Harvest provides the tools you need to look back on previous projects, plan with confidence, and track progress on future initiatives. Get started with a free trial today