Go Next Level with your Annual Plan!

I’m not sure where this year has gone. It’s been crazier in many aspects than any other that’s gone before! 40% of 2021 has already passed us by, and the new financial year is nearly upon us! For those of you deep into Q4, I wish you well; for the leaders in your business, it’s time to close out your planning for next year.

At Ellivate, we recently spoke about strategy and the critical role it plays in aligning your people to your goals and objectives for the year ahead. So, if your strategy is your WHY and your WHAT, then your annual plan is your HOW.

If you haven’t already started your planning for FY22 yet, it’s not too late. If you do leave it too late, you’ll be unclear about your strategy and how you’re going to get across the line well into the new financial year, and that leads to confusion and frustration across your go-to-market teams, and importantly your customers too.

Businesses that manage to incorporate an annual strategic plan into their regular BAU cadence will give themselves the best chance of successfully achieving their objectives.

“If you fail to plan, you are planning to fail!” – Benjamin Franklin

So, what’s a good planning process look like? Well, that often depends on the size of the company, however for start-ups with $1 million-$25 million in revenue, at least two years of operating history, and some semblance of an executive team, the following 10-step process is what is recommended:

1. Start at the top.

Planning should begin top-down, with the CEO sharing strategic and financial outcomes or goals with the executive team. These can often be set in conjunction with the board of directors and advisors.

• Align your vision-mission, total addressable market opportunity, analyse your strategic priorities, segment existing markets & customers for the year ahead – this will help you with the outcomes.
• The strategic outcomes should contain three or four key business priorities for the business and the things that the company is not going to focus on in the coming year. For example, launching a new product or entering a new customer segment could be a priority; but expanding into a new geographic market won’t be.
• The financial outcomes should consist of no more than three top-level metrics (with specific goals for each metric), such as net new ARR or cash burn, which define the goalposts for the company and the constraints within which you need to operate. Often, you will end up refining these goals. Nevertheless, starting with these goals will enable you and your team to focus on accomplishing them and what, if any, trade-offs to make, rather than needlessly debating the actual goals themselves.

2. Build from the bottom up.

You will need the CFO (or the CEO if you don’t have a finance person) to build a bottom-up financial model (revenues, cash flow, etc.) using the prior year’s performance and the economic outcomes as the seed data.

The key here is to build a model that each functional leader can modify/run scenarios and eventually own their own “tab” in the model – this is critical to ensuring that everyone uses the same model. It saves individual execs a ton of time since many of them are not Excel wizards. Myself included!

3. Leaders Go First.

The CEO should lead a planning kick-off with their exec team—ideally for a couple of hours and certainly for no longer than a half-day—to share the strategic and financial outcomes, inspire and align all of the exec team behind the desired output of the process, and agree on timelines. This then needs to filter down through the departments. The process shouldn’t take more than two-to-four weeks, depending on the company’s number of teams and size.

• Define your territory strategy, goals, territory targets based on total addressable market and obtainable market for the following year. This is a fantastic opportunity to name the territory team and owners of your business.

4. Get Tactical With Functional Leaders.

Based on the overall framework, each functional leader needs to define the output expected of them and the input ($$, headcount) required and begin to work through the trade-offs. For example, some of the key questions a Sales VP has to answer at this stage are:

Under this plan, how many leads do I need to convert? Does the VP of Marketing share the same definition of a lead?

• Should I scale the same conversion activities? Or do I need to shift the mix of inbound vs. outbound to make my numbers?
• What sales-enablement efforts do I need to plan for? How do I trade off sales enablement (which should improve lead conversion) with lead generation?
• What efforts can I afford? Which actions will be critical to support the 2022 plan? What 2021 activities must I invest in to lay the groundwork for 2022.
• Allow your teams to focus on the different territories and regions you operate in to define the specific strategies and needs for them to succeed in those areas.
• Put focus and ownership on your business to understand what it will take to win in each territory you are operating in and define a clear plan with owners.
• Understand the nuances of each territory and call out any specific requests that need to be factored into the following year. These requests could be specific resourcing considerations, regional product needs, legal and tax implications, marketing strategies to engage audiences with targeted messaging and more.


5. Align & Validate.

The executive team should meet for a half-day session to share their plan with their peers and begin to work on any potential “disconnects” (e.g. does the product roadmap align with the sales assumptions around new ACV, expansion/upsell?).

• Have your GTM teams provide the insights and data to validate this intended direction for the next year, whether that be a further investment into existing markets or strategies or moving into adjacent opportunities.
• Doubling down on what worked and stepping away from what did not will help your teams focus on the right actions and minimise wasted investment
• Your go-to-market teams will go deep on their business plans in annual planning – this allows them to develop strategic account plans for key prospects and expansion & renewals strategies for existing customers. The focus here is on how the go-to-market teams grow their business book in each territory and region, rolling up into a global view of how the business will attain its revenue goals. Using historical data, trends and insights will allow go-to-market teams to be specific and reduce the need for too many assumptions, adding risk to growth plans. This step can include how the go-to-market teams intend to work together in a unified way to meet the revenue goals.
• Ensure that all teams work together and align on the annual plan. Annual planning is best served when all areas and functions across the business work together. This will minimise siloes, encourage a greater sense of buy-in, cover blind spots and develop a more engaged and committed team. Annual planning requires areas of the business working together to create a plan to understand the expectations of each other and the business to achieve success. Each business area must have approved the plan, and each leader from the business must have skin in the game for the plan to hit the mark.

6. Test Test Test.

Once you have a first draft of the plan, you should stress test the assumptions for achievability.

• For example, can you hire the number of people you are planning to hire? Have you factored in ramp-up time? Have you factored in incentive compensation costs? Have you factored in attrition? Or the fact that 10-25 per cent of sales reps will not make a plan?
• Set transparent key metrics across the business to ensure that you are tracking progress against the annual plan. It is critical to review the businesses progress against the annual plan objectives, and the best way to check progress is by reviewing an agreed set of metrics and measures. Annual strategic planning must include the definition of these metrics, how they will be calculated, who owns each metric, when they will be reviewed, how the systems will support the production of the metrics, and the process in which the metrics are reviewed and actioned as needed.

7. Make The Call With Consideration.

You will often find a significant disconnect between the top-down goals that you, as the CEO, are setting and the bottom-up numbers that the team produces. Often, these issues cannot be resolved as a group, and you should take them offline 1:1 with your directs.

A company is not a democracy, and planning is only helpful if you make hard choices along the way. At the same time, you need to understand where each executive is coming from and make sure they buy into the plan, including the key assumptions/metrics. And if they do not buy-in, you need to make the hard choice of changing the plan or letting them go.

8. Align and Finalise.

Having resolved most of the issues offline, the exec team should meet again as a group for a half-to-a-full day to finalise the plan and sign off.

9. Communicate, Communicate, Communicate.

Once you have a near-final plan, communicating it is an art form. Should you have one set of numbers for the team and the board? How much detail should you share with the entire company?

It is best if you keep things simple: have one set of numbers, share the high-level plan with the whole company, and remind your team that the only thing you know for sure about your plan is that it is not perfect and will require agility along the way.



10. Keep Agile

Lastly – keep in mind that most of the quarter is out of your control on the first day of that quarter! Therefore, apply the 80/20 rule at every step because it is more important to complete a plan well before the start of the year than to get every detail right. Also, plan to re-plan and re-plan often, typically every quarter.

Again, it’s not the end product that creates value—it is the process. Annual planning, done well, is an opportunity to set the overall direction for your company, empower the team, and deliver clear leadership. Plans are useless, but planning is indispensable.

Of course, after you finalise your plan for next year, the real work begins…

Your Next Steps…

1. Get a grip on your planning process.
2. Make sure you share your renewed vision for your annual planning process
3. Consider inviting in a seasoned facilitator to help drive a successful annual planning process.

At Ellivate, we understand the importance of annual planning and its impact on your ability to Go Next Level. Book a meeting with us to kick start your annual planning process!

About Ellivate

Ellivate is the expert partner helping organisations and their go-to-market team’s scale.

Our powerhouse team of industry experts – with a combined 60 years of experience across the fintech, corporate and technology spaces – will work alongside your business to achieve your goals.

We have a shared passion for working with businesses to achieve rapid growth and apply an authentic, human layer of expertise that addresses the real challenges and concerns at the heart of your business.

We will work alongside you as a trusted and expert partner. We get in the trenches and ensure every solution is embedded within your business.