An annual plan has one job: to make this year’s choices obvious. When a new opportunity shows up in July, the plan should make it easy to say whether it fits. When the team is stretched, it should say what to protect.
Most annual plans fail that job because they’re either a revenue number with nothing underneath, or a list of thirty initiatives that nobody could prioritise. The fix is a small set of numbers and a short list of goals, and a habit of breaking them into quarters.
Start from where you’re going
Annual priorities only make sense against a longer view. Before you set them, make sure the 3 Year column of your vision board says what the business looks like in three years. If it doesn’t, start with writing your vision.
Then ask: what has to be true by the end of this year to be a third of the way there?
Set the numbers
The 1 Year column on the vision board has a target date and space for:
- Revenue: the top-line figure for the year.
- Profit: the bottom-line figure. Don’t skip it. Growth that costs more than it earns isn’t progress.
- KPIs: two to five other numbers that define a good year. Customer count, retention, team size, average deal size, whatever matters most for your model.
Be specific. “$2.4M revenue, 15% net profit, 120 active customers” is a plan. “Strong growth” is a mood.
Choose three to seven goals
Underneath the numbers sits the checklist of goals for the year: the handful of things that have to happen to hit those numbers. Launching a product line, hiring a head of sales, moving to a new system, opening a second location.
Three to seven is the right range. Fewer, and you’re probably missing something. More, and you’ve written a to-do list.
To cut the list, ask of each goal:
- Does it move one of the numbers? If not, why is it here?
- Could we do it in a quarter? If so, it’s a milestone, not an annual goal.
- Would we notice if it didn’t happen? If not, drop it.
Each goal can be ticked off on the board when it’s done, and the column shows how many are complete.
Break the year into quarters
An annual goal is too big to own week to week. The work happens in quarters.
At each quarterly planning session, look at the annual goals and ask what has to happen this quarter to keep each one on pace. Those become this quarter’s milestones, each with one owner, a due date and a definition of done. Update the 90 Days column on the vision board at the same time, so the board shows the full chain from three years to this quarter.
A simple check at each quarter’s end: of the annual goals, which ones moved this quarter? A goal that hasn’t moved in two quarters needs either a milestone or an honest conversation about dropping it.
The clicks for this are in create a milestone.
Put the numbers on the scorecard
Annual numbers are lagging: you only find out at year end. So for each annual number, pick one or two weekly numbers that lead to it, and put them on your scorecard as metrics. If the year depends on 120 active customers, track new customers won and customers lost every week. If it depends on profit, track gross margin monthly.
That way, the weekly meeting is quietly checking progress on the annual plan every week, not just in December. See create a metric.
An annual and quarterly rhythm
- Six weeks before the year starts: draft the numbers and goals; share with the leadership team.
- Before day one: agree the final 1 Year column and set the first quarter’s milestones.
- Every quarter: tick off completed goals, check pace on the numbers, set the next quarter’s milestones and update 90 Days.
- Every week: review the leading metrics in your sync.
- Mid-year: an honest check. Are the numbers still realistic? It’s better to reset a target in June than to pretend in November.
Common mistakes
A revenue number with nothing underneath. If nobody can say which goals produce the revenue, it’s a hope.
Too many goals. Every goal you add takes attention from the others.
Goals that are really ongoing work. “Improve customer service” never finishes. Make it a metric with a target instead.
Setting it and forgetting it. An annual plan that isn’t broken into quarterly milestones will be rediscovered in November. Check where you stand weekly with checking company health.
No profit target. The easiest way to hit a revenue goal is to stop caring about margin. Write both down.