Rhythm · Organising to Scaling
Closing the year and planning the next
You close the year with two days in which the leadership team puts four quarters side by side, tests the strategy and chooses what stops, and goes home with the priorities for the first quarter.
Worth reading first: The quarterly session, Your strategy on one page
Does this sound familiar?
- It's mid-January. The new year is already under way, and the annual plan still hasn't been made.
- Your plan for next year looks a lot like last year's. Two items are on it for the third time.
- When you look back, the talk is mostly about the last quarter. Nobody quite remembers what happened in March.
- Every year something gets added to the plan. Nothing ever comes off.
Who it's for, and when
For founders and leadership teams who let one year run into the next, or make a plan in January that looks a lot like last year's. It starts to matter when not everyone can remember what happened this year. In Proving, one day with your business partner or your first people is enough; two days and a three-year goal are still too early at that stage.
The model
A year is long enough to see patterns you miss in a quarter. A client who complained about delivery times every quarter, a priority that came back four times, a team that was already overloaded in the spring. Quarter by quarter, each of those is a separate problem. Over twelve months you can see it was the same thing every time.
The year is also the moment to test the strategy, box by box on the canvas from the lesson Your strategy on one page. Usually the direction holds. Only change what the year has clearly proved wrong. And a plan that only adds things grinds to a halt: alongside the day-to-day work there's room for three to five annual priorities, and you put the rest aside on purpose.
The annual session isn't over until the first quarter is ready to go. How you choose those priorities is in the lesson The quarterly session; this lesson is about what only the year can do. Every annual priority gets an owner from the leadership team.
Verne Harnish, Scaling Up (2014). Annual planning is the longest meeting in his rhythm: the leadership team looks back on the year, tests the strategy, chooses three to five annual priorities for the year ahead and works out the first quarter from them. Beforehand, he asks the team what the company should start, stop and keep doing (Start/Stop/Keep).
Pitfalls
Only the last quarter
What happened in October feels bigger than what happened in March. Actually put the quarters side by side, or you'll plan the new year on the mood of the last few weeks.
A new strategy every year
Your core values, your core customer and your three-year goal last longer than a single year. If you rewrite them every year, nobody steers by them any more.
Watch and read
One minute on a whiteboard: ask your team what you should start, stop and continue. It's the same question as the Start/Stop/Keep Harnish uses for annual planning.
Watch on YouTubeWhy most days away from the office fail, too loose or too rigid, and what their best offsite in years did differently. It's long; the first ten minutes give you the core.
Watch on YouTubeTo go further
The man behind the meeting rhythm explains his method for growth on a Dutch programme, during a masterclass in Amsterdam, with founders at the table.
Watch on YouTubeRead
Scaling Up: How a Few Companies Make It...and Why the Rest Don't
Verne Harnish · 2014 · ISBN 9780986019524
The source of annual planning in the rhythm: looking back on the year, the annual priorities for the year ahead on one page, and working out the first quarter from them. Published in Dutch as Scaling up: de groeiformule (Business Contact, 2016), ISBN 9789047008682.
View the bookApply it
- 1
Book the two days now
In December, or the first week of January at the latest, with the leadership team, ideally away from the office. Decide who leads it: a member of the leadership team or someone from outside. Diaries fill up at the end of the year, so do it now.
- 2
Ask for the annual reflection three weeks ahead
Give a date it has to be in by. Use Manage questions to add one question: what do you think the company should start next year, what should it stop, and what should it keep?
- 3
Put the canvas on the table
Print the strategy canvas as it stands. On day 1 you go through it box by box with one question: does this still fit what the year showed us?
Your strategy on one page - 4
Write down the objectives for the year
On day 2 the annual priorities become objectives with a number and an owner.
Objectives for this year
Examples
Ready to use: the annual session (two days)
Who: the leadership team. One person leads and keeps time, one takes notes. Ready beforehand: everyone's annual reflection, with what the company should start, stop and keep. The priorities from all four quarters and how they turned out. The scoreboard and the numbers for the whole year. The canvas, printed. Day 1: looking back and testing 9:00 to 9:30: the round. Everyone sums up the year in one sentence. 9:30 to 11:00: four quarters side by side. Which priorities were completed, and which kept getting pushed back? Which numbers moved, and which didn't? 11:15 to 12:30: the annual reflections. Which themes keep coming up? Count what the team wants to start, stop and keep. 13:30 to 15:30: testing the strategy, box by box on the canvas. Anything that clearly no longer holds goes on a list of changes. The rest stays. 15:45 to 17:00: what are we stopping? Write down what you're putting aside on purpose, even if it's a good idea. Breaks: coffee at 11:00 and 15:30, lunch from 12:30 to 13:30. Day 2: choosing and setting up 9:00 to 9:15: what's stuck with you after a night's sleep? 9:15 to 11:00: the objectives for the year and three to five annual priorities, each with an owner from the leadership team. 11:15 to 12:30: the first quarter. The priorities for January to March, and the KPI targets for that quarter. 13:30 to 14:30: what do we tell the company, and who does it? Every member of the leadership team tells their own team in the first week. 14:30 to 15:00: the dates of the four quarterly sessions and the next annual session, and a score out of ten for these two days. By the end you've settled: the changes to the canvas, the objectives and annual priorities with their owners, the list of what's been put aside on purpose, the priorities for the first quarter, and the dates.
What the year showed
Looking back, it turns out this year's three biggest clients all came through partners. Nobody had seen it that way, because every deal was discussed on its own. The annual priority for next year becomes more partners, and the cold outreach stops.
A list of what you put aside on purpose
Last year's annual plan had eight items, and three more were added. In the annual session the leadership team picks four. The other seven go on a list that comes back on the table at the first quarterly session.
Do this in your own business
Everything up to here is free. What you fill in for your own business, you keep in Boldcaster.
- Go to the annual reflection. That's where you write your review of the year and what you think the organisation should do next year. Use Manage questions to add the question about starting, stopping and keeping. In the Team overview you can see who has submitted their reflection and what each person wrote.
- You look back on a situation from your own work. Only you can read what you write.
- You set a date with yourself, and on that day the app asks how it went.
- You assign the lesson to your team and see who has done it.
- The quiz counts towards your progress, and you see which lesson comes next.
Four weeks free. You'll land straight in this lesson.
Quiz
6 situations. You need 5 of 6 right. You can try again at any time.
1.It's 10 January. You want to make the annual plan this month, and then the priorities for the first quarter. What's the problem?
2.'Measure customer satisfaction' is in the annual plan for the third time. What do you do first?
3.Your business partner wants the two of you to make the annual plan on a Saturday. The team hears about it in January. What do you say?
4.On day 1 someone suggests redefining the core customer and the core values, because it's a new year. What do you say?
5.Nine themes come out of the annual reflections. The leadership team thinks they're all important. What do you do?
6.It's two o'clock on the second day. You have a direction and four annual priorities. What do you do before you stop?
Nothing is saved here. In the app, the quiz counts towards your progress.
Read next
- A role with a purpose · Everyone in your team knows why their role exists, and how you'll both be able to tell they're doing it well.
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