Mastering Your Annual Planning Meetings

In our last blog, we discussed finding the “why” when it comes to annual planning. If you haven’t read it yet, do check the actionable insights for coaches and business leaders alike.

Keeping our attention on annual planning, let’s take a look at meeting efficiency – a critical topic considering that fruitless meetings are a wasteful and frustrating reality for many businesses today. An Inc.com study reported more than $37 billion is­ wasted on unproductive meetings and that executives across the board consider more than 67% of meetings to be failures.

Those are tough numbers to grapple with – especially when it comes to annual planning. So what can leaders do to ensure their meetings are a success? Better yet, how can coaches assist leaders with this goal?

We reached out to Gravitas Impact premium coach Michael Langhout, an accomplished business leader and executive coach with more than 30 years of experience helping mid-market companies grow in a diverse range of industries. He’s the founder of Langhout International – a business growth advisory firm that specializes in people, strategic thinking, planning and execution, and cash management. Langhout gave us a look at his in-depth process for facilitating productive annual planning meetings.

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What kind of prep work goes into an annual planning meeting?

Langhout: I first like to work with the second-level managers in a pre-annual planning session without the senior team present. We take a half day and focus on developing their SWOTs (strengths, weaknesses, opportunities, threats), and gather the priorities they feel are important for the year ahead. The ‘pre-work’ is shared with the leadership team who factors the input in their annual planning ‘thinking.’ In addition, meeting with the CEO ahead of time to collaboratively determine the outcomes for the annual planning session is important.

What does a typical 2-day annual planning like?

Langhout: The 2-day annual planning session is attended by the leadership team with the focus of Day 1 on strategic thinking and Day 2 on execution planning.

On Day 1, we generally begin by reviewing the bright spots for the year; recounting the year’s achievements usually generates a sense of excitement and creates positive energy in the room.  A functional review is next, reiterating the company’s key business functions and their accountable leaders, and this may be followed with i) a talent assessment where each senior leader reviews the continued fit of individuals in his or her area, and their contribution to the progress and direction of the company; and ii) key processes to determine which areas that are functioning well or if they needed attention.

As we continue to refine the company’s strategy, we review and revalidate the company’s assumptions as stated in their business model canvas or attributes maps of the marketplace or whichever key tool used to drive the company’s growth strategy. And we look for gaps, i.e. underserved needs or markets, and find new strategic paths to profitably fill those gaps.

Since strategy is longer term than just one year, we move on to focus on the 3-year time frame and develop broad financial targets, big stretch goals, that we want to hit in the next 36 months.

Day 2 begins with a review of the first day to make sure we are still in agreement and aligned. Now, we are ready to develop our annual priorities for the coming year. First, we set the overarching annual goal with a critical number — one of the key aligning metrics a company can use to tie together all functions in the business, focusing on one leading indicator that, if accomplished, will drive progress towards the main goal.

Nailing down the main priorities the company must focus on in the coming year will ensure progress is made each day, week, month, and quarter by each department towards accomplishing the annual goal.  This is an execution discipline that aligns all your key leaders in your company and provides the roadmap for the coming year.

What are some logistical tips for ensuring success?

Langhout: For annual planning, I like to work with the senior team in a two-day meeting at an off-site location or retreat center. This ensures that we are not distracted by events that inevitably arise at the office. Most annual meetings include anywhere from 4-9 members of the senior leadership team. I like to break them into groups so that each group can develop content that contrasts with the other groups, thereby stimulating debate.  Driving productive debate as taught by Liz Wiseman in her book ‘Multipliers’ improves decision making and help leaders ‘liberate’ their leadership team’s best thinking while challenging their collective achievements.

What are some best practices that leaders/leadership teams can do to establish a good rhythm for their annual planning meetings? What is a coach’s role in these sessions?

Langhout: When working with a CEO and their leadership team, I like to keep the pace lively by moving through topics in 1-1.5 hour segments and taking breaks every 90 minutes. If we have completed a prior assessment, we can review the results during the meeting. We’ll also do a full financial review in the annual session. Since annual planning happens prior to budgeting, each team member is involved in developing budget forecasts for his or her department. A coach’s role is to get everyone engaged, talking, and collaborating to achieve the outcomes that were previously set. Most importantly, a coach holds the team members accountable to their commitments.

What should the team walk specifically away with once the planning session is all said and done?

Langhout: When the annual session is completed, all members of the team will have:

1. A clear picture of the three-year and one-year targets – including the associated critical numbers.
2. The quarterly plan for the next 90 days, and each member’s individual role in accomplishing the plan.
3. They will be accountable to make any personnel adjustments in their functional areas arising from the talent assessment.
4. They will be clear about the core values, purpose, and long-term goals of the company.
5. They will be held accountable to deliver on the brand promise and guarantee which was co-developed with the senior team.
6. A complete understanding of where cash comes from, how to accelerate it, and a plan to create more of it.
7. A deep commitment to supporting the team they have just spent two days with.

What do you think of Langhout’s advice? If you’re a coach, do you have a different perspective? If you’re a leader, have you used a similar process? Don’t forget to share your thoughts in the comments section below!