Annual planning tips: 6 steps to plan a fiscal year
Summary
An effective annual plan is critical to keeping your teams, departments, and company aligned and working toward the same goals.
As an operations leader, you oversee how your organization runs its business. By reviewing how your company performed over the past year, you and your operations teams can identify which strategies worked and which fell short, and build an effective annual plan to maximize the impact of every department.
Here's what you need to know about building a successful annual plan, from understanding what annual planning is to executing a step-by-step process that drives results.
Learn how to build an AI-powered organizational plan
Watch a short demo video to see how your company can create a plan that connects everyone’s work to company-wide goals.
What is annual planning?
Annual planning is the process of setting goals, strategies, and priorities for the upcoming fiscal year based on insights from the previous year's performance. It gives your operations teams a structured opportunity to reflect on what worked, adjust what didn't, and align resources toward company-wide objectives.
In essence, your annual plan should contain:
The goals your business needs to achieve
A strategy for how your organization will hit those goals
Clear tactics for what each department will work on
Any important milestones that benchmark progress
Annual plans drive clarity and accountability
Annual planning provides your business with a roadmap or template for the upcoming year. Organizations with a formal and pre-established system to inform and manage their strategy consistently outperform those without one. It connects your employees' goals to their work, making it easier for them to achieve results-based outcomes and maximize their teams' impact.
With an annual plan, departments can start the year off with a strong understanding of the overall vision and how their work contributes to larger business goals. Without an overarching plan, it can be difficult to understand how a specific project or initiative advances the business.
Here are the key benefits of annual planning:
Clear focus and direction: An annual plan gives every team member a clear sense of where the organization is headed, helping them focus on the work that matters most.
Improved decision-making: With a defined plan in place, leaders and teams can make faster, more confident decisions and evaluate new opportunities more effectively.
Resource optimization: Annual planning helps you allocate budgets, time, and talent to the initiatives that will have the greatest impact on your business goals.
Clear goals establish benchmarks for project progress
Your annual plan shouldn't be a set-it-and-forget-it goal. Periodically check project progress to see how your teams are tracking and adjust if they're ahead or behind schedule.
If you notice that a specific initiative is not on track to meet the strategic goals outlined in your company's annual plan, you can use this data to pivot and double down on, or divest from, specific initiatives.
Establish concrete goals for a specific time period
The more specific your goal, the more concrete your action plan. Providing detailed, specific goals gives your employees a clear understanding of what to prioritize and what they're responsible for delivering.
Make sure your goals are measurable, as well. Clear key performance indicators (KPIs) and objectives and key results (OKRs) demonstrate how tangible work connects back to larger business goals.
What does a good annual plan include?
A strong annual plan includes essential components that guide execution and provide context for success:
Reports of the previous year's performance: Your company's annual plan for the upcoming year should be based on the data from the previous year's performance. This provides context for your teams on what they're capable of accomplishing within one calendar year.
Budget estimates: A common KPI investors track is return on investment (ROI). Knowing how much each team is spending makes it easier for your organization to calculate ROI and adjust strategies. Providing budget estimates also gives departments the context they need for the resources they have at their disposal for the year.
Clear and specific goals: Annual plans should use the SMART goal framework so that your company can easily measure progress and report back on it later.
Important milestones: Your business can accomplish a lot of work within one year, but to do that, each department needs to know how it's doing. Milestones operate like checkpoints, giving teams and departments a sense of direction and an idea of how they're pacing against annual goals.
Project buffers and contingency plans: Unexpected things happen all the time, and it's better to be prepared than caught off guard. Develop a contingency plan for how your organization will get back on track in the event of an unexpected roadblock. Also, set aside a buffer of resources, such as a small portion of your company's budget, to cover unexpected expenses.
How to prepare for annual planning
Preparation is essential for a productive planning cycle. Here's what to do before you begin:
Gather performance data: Compile reports on last year's goals, key performance indicators (KPIs), and project outcomes to establish a clear baseline.
Identify key stakeholders: Determine who needs to be involved in the planning process, from department heads to finance and HR leaders.
Review your strategic plan: Ensure your annual plan aligns with your organization's long-term strategic plan and vision.
Set a planning timeline: Block time on calendars and establish deadlines for each phase of the planning process.
Collect team input: Survey teams for feedback on what worked, what didn't, and what they need to succeed in the coming year.
Connect everyone's work to company-wide goals
87% of workers with individual goals tied to company-wide goals say their business is well-prepared to meet customer expectations. Discover how Asana can transform the way your organization aligns work to goals.
6 steps for annual business planning
Annual planning typically takes place near the end of the calendar year or fiscal year. As you approach this period, follow these six steps to build an effective plan.
1. Reflect on previous strategies and develop new ones
Before your business can start planning for next year, ask yourself, your stakeholders, and your operations teams: How did we perform against the strategies laid out in last year's annual plan?
No matter the answer, use these recent data points to steer your decision-making when building your next annual plan. That could mean doubling down on big programs or initiatives born in the last year, or going a different direction entirely.
A well-built annual plan factors in reflection on what did and didn't work, and improves on it.
2. Transform your business's greatest needs into goals
After reflecting on last year's performance, hone in on the most significant growth and improvement opportunities. Use this for guidance as you construct company- and department-wide goals.
A consistent goal approach across the business speeds up the goal-setting process and ensures alignment. The exact approach you use will depend on your company, but here are a few to consider:
The Objectives and Key Results (OKR) method, which helps your business set goals using the approach "I will [objective] as measured by [key result]."
Key Performance Indicators (KPIs), which use leading and lagging indicators to track how you're performing towards your goals.
The SMART goals approach, which helps ensure the goals your organization sets are specific, measurable, achievable, realistic, and time-bound.
3. Create an action plan to maximize impact
The next step is to create an action plan for your business to achieve the goals outlined in step two. Your action plan should outline the list of steps your teams need to take to accomplish their goals.
From there, delegate the work laid out in the action plan to specific teams and departments. Connecting the work your operations teams complete to the company's larger goals makes it easier for each team to understand the impact their work has on the business.
Connect everyone's work to company-wide goals
87% of workers with individual goals tied to company-wide goals say their business is well-prepared to meet customer expectations. Discover how Asana can transform the way your organization aligns work to goals.
4. Ensure the annual plan is everyone's plan
Not everyone can be involved in building your company's annual plan, but every team member should feel their work is recognized and accounted for in it.
As the annual plan comes together, meet with leaders and employees across the business to ensure varying perspectives and priorities are factored into the final product. This step is critical for getting buy-in and generating excitement across the business.
You don't want to simply announce the annual plan. You want to bring every department along and get them excited. Consider presenting the company plan, explaining why it matters, and outlining how each department will contribute to achieving its goals.
5. Execute your strategy, monitor metrics, and adjust as needed
At this point, your organization's annual plan is completed, but nothing is ever fully set in stone. As the year progresses, make sure you're continually monitoring success metrics and KPIs. If the results of your strategies aren't behaving as you expected, it's important to adjust so your business still hits the goals outlined in your annual plan.
6. Repeat again for next year
At the end of the year, it's time to start the annual planning process over again. Align with your strategic plan, review last year's results, and create a new plan to achieve those business goals.
Gear up for next year
After a year of hard work, it's time to reflect back and plan for more great things in the future. While annual planning takes time, collaboration, and thoughtful strategy, the efforts show in your business's success.
Ready to connect your team's work to company-wide goals? Get started with Asana today and give your teams the clarity they need to reach their goals.
Connect everyone's work to company-wide goals
87% of workers with individual goals tied to company-wide goals say their business is well-prepared to meet customer expectations. Discover how Asana can transform the way your organization aligns work to goals.
