Annual planning, the way we’ve been taught, is largely fortune telling and a waste of time. Plan more effectively by doing less of it.
What We Were Taught
- Go away for 2-3 days in January to plan the year.
- Plan everything in as much detail as you can; growth strategies, budget, purchases, hires, leases, etc., etc.
- Follow the plan – don’t deviate – people who deviate won’t be successful.
- Wait until next January to do it again.
- Put it on a shelf with your “shelf-help” books – it’s only real value is to help your shelf look good.
If strategic planning was important for the new year, you would do it in December, not in January. And we wouldn’t wait 12 months to do it again. If you let your “strategy” degrade to the point that you only have one day of “strategy” left when you get back to it next January, it’s not a strategy, just an exercise you go through.
And following it faithfully is just a dumb idea. During one of my short stints at trying to be an employee I wrote the CEO an email in October requesting 10 new workstations and 20 employees (double-shifts) to handle growth. The next day he wrote back and said he had checked the annual plan I submitted in January, and that I had not requested those capital expenditures in the “plan”. Request denied.
They went bankrupt three years later, slavishly following their silly annual plans and rearranging the deck chairs in the business all the way down.
Giant Corporation, Inc. taught us that we should try to capture everything in an annual plan – the more detail we go into, the more likely we are to be successful. I did enough of those to know it’s nonsense (and surveyed a few thousand business owners who say the same thing).
Only sweat the big stuff – the 12-3-1 Plan
All you need to capture is the four-to-ten big things that you need to do this coming year. That’s it. Write them down. I guarantee you that if you capture the very few, very important things you need to accomplish this year, you are MUCHmore likely to actually get them done than if you attempt to captureEVERYTHING that needs to be done this year.
Once you have these, develop what we call a 12-3-1 Strategic Plan. 12-months, 3-months and 1-month, a third of a page for each. You don’t need anything more than this.
Put your four-to-ten 12-month Objectives for next year on the top 1/3 of a page (spreadsheet, word doc, doesn’t matter), That’s typewritten in an 11 pt. font, with lots of spacing. Don’t cheat. The more you capture, the less you will do. Simple beats complex every time.
3-Month Action Plan
Take each one of these 4-10 Objectives and decide what you have to do in the next quarter to get them done in a year. Put them on the middle third of the page – keep it short!!
Don’t wait until next November to get started. That’s why both diets and business plans don’t work. Tomorrow never comes. Cut the elephant into smaller bites and get a sense of urgency.
1-Month Action Plan
Take each quarterly action plan/objective and divide it once again into what you need to do in January to accomplish the first quarter’s objectives. These take up the bottom third of your page. Don’t cheat – if you can’t fit it comfortably on one page, you have too much detail.
Don’t wait until March. Annual and quarterly objectives can be daunting, but picking away month-by-month will make them doable.
Don’t put anything in your 12-3-1 Plan that helps you make money this month; just things that will help you build a business that creates more time and money next year.
“Buy a copier”, “Replace retiring employee”, “Sign contract w/ xxx, Inc.” – none of these belong on your plan.
“Move to new location”, “Hire/train someone to replace a piece of me”, “Increase revenues by xx%”, “Go from 60 hrs/wk to 30hrs/wk while increasing profits” – these are great annual planning objectives.
Every Monday morning look at the bottom 1/3 of the page and decide what you need to do that week to accomplish that month’s action plan. Block the time that week to get it done. If you do this every week, you will knock out the monthly action plan. If you knock out each month, you will accomplish the quarterly objective, and if you do that four quarters in a row, you will have had a great year.
Details? We don’t need no stinkin’ details!
If you keep it simple, you will only have to work out real details in a real world each week/month. If you try to capture all the details for the year when you put together the plan, you will be solving ivory tower problems – most of which will never happen. And you will miss half the problems you will actually face. So don’t solve problems/details until they are real. They are never real in January when you did your planning (see above request for 10 workstations).
Quarterly 12-3-1 Plan
This is the big key. Don’t do an annual plan anymore. Do a quarterly one. Every quarter your 12-month plan will have deteriorated to only 9 months. April 1, push it back out to 12 months on the top 1/3 of the page, then use that to re-populate the 3-month (middle third) and the 1-month (bottom third), and then get after it again each Monday.
Simple beats complex every time. If you capture everything, you’ll do nothing. If you capture the few big things, you might actually do some of them.
You can buy our Strategic Plan template along with our Lifetime Goals and Process Mapping templates and detailed instructions for each on our book site – Making Money Is Killing Your Business .
Or just grab a sheet of paper and get it done.
By the way, it shouldn’t take you more than 2-4 hours to do it, because you get to tweak it every week, every month, and every quarter.
Relax. Just get moving on the big stuff and the rest of it will unfold as you move.
Have a great year! (one week at a time)
by Chuck Blakeman, Author of the #1 Rated Business Book of the Year, Making Money is Killing Your Business