Ally.io
November 1, 2021

Annual planning best practices: how to get it right in 2022

Lucy Hitz
Director of Content, Ally.io
Planning

In 2022 annual planning meetings across the globe, executives are mapping out the future of their organizations.

Months will be spent collecting data, obsessing over budgets, and identifying strategies to drive business results. And yet, after countless meetings and what feels like a thousand iterations of the plan, many leaders are left feeling like the whole process was a waste of time. They’re probably right.

According to David Norton and Robert Kaplan in their book, The Balanced Scorecard, 90 percent of organizations fail to successfully execute their strategies.

The reason? Too often, leaders focus their annual planning on setting budgets and goals, without considering the actual implementation process—connecting output to outcomes.  

When organizations don’t know how they’ll execute their goals, and when they fail to effectively communicate that plan to their organization, then they’re unlikely to achieve success. 

However, when annual planning is done well, leaders carefully articulate their goals for the next year, identify the metrics that will inform their progress against those goals, and translate them into actionable steps for their company. 

What to Do

Only when this happens can organizations truly find value in the planning process.

You’ll walk away from this post with best practices for running the annual planning process at your organization and avoiding common OKR pitfalls. 

Annual planning is more than budgeting

Too many organizations see annual planning as a glorified budgeting exercise with some initiatives mixed in. While setting budget and resource allocation plans are, indeed, an essential part of this process, it’s so much more than that. 

Other elements that must be included in your annual planning in order to achieve results are:

The objectives and key results (OKR) methodology is designed to incorporate all of the above elements that are so often missing from annual planning. They help your company not just to identify your strategic initiatives, but to develop an actionable plan to be executed upon by all members of your organization. 

Here’s how OKRs flow from your strategic planning process at the leadership level. 

Annual Planning Process

How to run an annual planning process

Now that you can visualize how OKRs fit into your existing processes, how do you actually go about taking your planning beyond budgeting? Below, we’ll walk through the steps your organization should take to run an effective annual planning process. 

First, an overview of your timeline. You’ll notice that annual planning should start 1-3 months before the year ends, so don’t wait until the last moment to begin. 

Timeline

1-3 months before year end: Visioning

The first step in your annual planning process should engage your executive team and senior leaders in both reflection and forecasting. 

Gut check. Set the stage by reviewing your organization’s mission, vision, and values. Then ask yourself if the strategies you intend to implement are in line with those core elements of your organization. Will the strategic initiatives you outlined drive you toward the future state that you envision? 

Slingshot. Next, facilitate an information sharing session between leaders of key teams at your organization. Ask them to run a “slingshot” to candidly review the past, assess the present, and envision the future. Like a true slingshot, transitioning from the past to the future should be one fluid motion. If not, take some time to discuss where there are gaps or rough edges in your plan, and what it would take to smooth them out. This may require adjustments to your strategy.

Write OKRs. Executives and senior leaders should now write company-level annual OKRs, as well as company OKRs for Q1. Keep in mind that objectives should outline what you want to accomplish, and key results should identify the measurable outcomes that will help you achieve those objectives. 

1 month before year end: Alignment

Once your OKRs have been written, take intentional steps to build alignment between executives and senior leaders and the teams that roll up under them. 

Explain priorities. Executives and senior leaders must not only communicate the priorities (your objectives) for the upcoming year and quarter, but why those priorities were chosen over others. Be transparent about strategy shifts, budgets and resourcing, and limitations to your vision. 

Write Q1 OKRs. Team leaders should now write OKRs for Q1 that roll up into company objectives. Remember, results are stronger when everyone is aligned, so this is a critical step of the OKR process. If it appears that some leaders or teams are struggling, hold workshops to engage and educate teams that need guidance. 

Need help writing OKRs? Take a look at these free templates to help you get started. 

First few weeks of the new year: Enablement

During the first few weeks of the near year, leaders should roll out Q1 OKRs to their teams. That means at this point, every employee in your organization should be involved in the process. 

Communicate expectations. In 2020, one-third of employees surveyed for Asana’s Anatomy of Work said a lack of clarity on tasks and roles was a top factor fueling their burnout. The solution? 34% said the main thing that will motivate them to do their best in 2021 is knowing how their work contributes to the company’s overall mission. Be sure to communicate how your team OKRs came about, and draw the connection between mission and objectives.

Write individual OKRs. Individual contributors should now be writing their own OKRs that cascade down from team OKRs. Here are a few more tips to help them write effective OKRs

Establish a rhythm. Team leaders should work with admins to schedule weekly check-ins, monthly reviews, and an end of quarter review with their team. Integrate Ally.io with the business tools you already use to make checking in on progress easy for your team. 

Connect your goals with daily work with integrations in Ally.io.

What’s next? Get growing!

As you build your annual plans, keep an eye on growth goals. In 2021, 88% of US CEOs said they planned to pursue organic growth, according to PwC’s 24th Annual Global CEO Survey.

But only 47% felt confident about their revenue prospects looking ahead three years.

It doesn’t have to be that way this year.

Growth is made possible when you build OKRs into your annual planning process. 80% of Ally.io customers say their OKR program has helped them create a higher performing team, and 62% say it has led to faster growth for the business. 

Growth is made possible when you build OKRs into your annual planning process. 80% of Ally.io customers say their OKR program has helped them create a higher performing team, and 62% say it has led to faster growth for the business. 

Get organized. Get started on your 2022 annual planning with Ally.io. Sign up for a demo now.

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