Why Annual Planning Often Fails

Most companies are in “Planning Season” right now. They are setting up their goals and their roadmap for 2025. Some have it down to a science, crafting SMART goals for the year ahead, a strong execution plan, and successfully measuring against these goals once the year begins. Many other companies, however, don’t have as successful of an outcome for annual planning. Why is that? Here are some common reasons why annual planning fails: 

It’s delayed or rushed 

As the year comes to a close, the looming items left on the to-do list can feel daunting. During this “crunch time,” many senior leaders commit the mistake of pushing off future planning thinking that this year’s sales, internal deadlines, or other pressing items are the only ones that should be prioritized. You need to make room for both. Today and tomorrow. 

Leaders who continue to push planning meetings until the last weeks of the year or try to hop into a meeting without proper preparation will undoubtedly feel rushed. Even if they don’t personally feel the time crunch, the organization will feel the pain from that.  

How to avoid this pitfall:  

• Schedule planning meetings with your executive team to take place over the course of Q4, ideally with a finalized roadmap by early December.* Several days should be devoted to this planning in total; don’t try to fit it into a typical hour or 90-minute meeting. 

• Block time for yourself to brainstorm, consider key goals, metrics, and reflect on what went well and what you want to change in the year ahead.

  *this assumes that fiscal year is a calendar year  

There aren’t measurable metrics 

Revenue targets are common examples of annually planned targets that have a quantifiable measure around them. For many companies, the quantifiable metrics stop after these common sales targets. And yet, goals for companies bleed into all parts of their organization from internal operations to delivery and beyond.  

For every goal you make, make sure you have a way to measure your progress towards that goal. Don’t settle for goals such as “improve our delivery process” or “focus on customer satisfaction” without defining that further. 

How to avoid this pitfall:  

• Consider questions like “how will I determine whether we achieved this goal?” or “what does success look like for this goal?” as you plan your year. 

• Pair each target with a plan to measure it and assign someone on the leadership team as the “owner” of each metric. This creates a clear path and clear accountability.  

  
  

Solving for broken processes 

It is hard to progress your organization into the future when you are handcuffed by a problem today. Many organizations plan around cumbersome and broken processes rather than solving these issues and optimizing their approaches.  

An example of this may look like a leadership team planning budget for a new hire to come in and manually correct errors a team is making in a system that is challenging to use. (May sound extreme, but we’ve seen these decisions happen more often than you think). Rather hiring around a broken system, the process and people should be evaluated. What are the issues? How do we solve them at the root? How to do enable our team to be successful with these new changes? Do we have the right team to be successful to allow us to scale in this way? 

How to avoid this pitfall:  

• Begin planning season by evaluating where you are today - including what's not working well.

• Do a root cause process analysis and try to solve at the core of a broken process or system rather than trying to grow and scale despite it. Broken processes hold you back from realizing the highest returns. 

Summary

Planning for the upcoming year deserves time and attention. Be sure to evaluate how your organization is doing today before jumping into the roadmap ahead. For every goal, assign an "owner" and an action plan for both how you'll achieve it and how you'll measure success. You will not regret the time you invest into the future.