Annual planning can feel a little like Jenga. There are a lot of moving pieces, and changing one can affect several others.
A new project changes your capacity needs. A shift in staffing affects project economics. An inefficient process consumes time that could be spent on client work. And plans for next year may require the business to operate differently than it does today.
That’s why fall planning shouldn’t start only with next year’s goals, budgets and priorities. There’s valuable information sitting right in front of you: what you’ve learned from running the business this year.
Last fall, we shared a planning framework focused on aligning strategic priorities with the people and budget available to deliver them. We still believe that’s an essential part of annual planning.
A year later, we’d add another layer: before deciding what resources you need for next year, understand how effectively the resources you already have are being used.
That means looking beyond what you want to accomplish and taking an honest look at how the business is operating today.
Look back: What did this year teach you?
Start with what you know.
Where did projects go according to plan, and where did they take more time or resources than expected? Where were teams consistently stretched? Where did you have more capacity than anticipated? Did the work produce the financial results you expected?
Also consider how the work actually got done. Where did teams lose time due to rework, unclear ownership, inefficient handoffs or processes that were more complicated than they needed to be?
Look for any patterns that should inform your planning for next year.
Look ahead: What do you reasonably expect?
Next, build a realistic view of what you know about the coming year.
Some work may already be committed. Other opportunities may be far enough along in the pipeline that they should factor into planning. You may also know that certain clients are changing their spending, particular types of work are increasing or decreasing, or new business priorities will require different skills or resources.
You won’t know everything now, and you don’t need to.
Annual planning isn’t about predicting exactly what will happen next year. It’s about using the information you have to understand what is likely to happen and preparing the business accordingly.
Look across: What is the business telling you?
With that picture in place, look at the business through four operational lenses:
Capacity & resources Do the people, skills and capacity you have align with the work you reasonably expect?
Project economics Is the work you’re doing producing the financial results you expect?
Operational efficiency Where are you losing time, capacity or money unnecessarily?
How the business operates Do your current ways of working still make sense for the business environment you’re in?
These areas are connected and shouldn’t be evaluated in isolation.
A capacity issue may be connected to how work is allocated, how projects are staffed, or inefficiencies that are consuming available time. Financial performance may point to questions about scope, staffing, utilization or how the work is being delivered.
Looking across the business helps you understand the cause before deciding on the solution.
Act: What needs to work differently?
Once you understand what this year has taught you and what you reasonably expect next year to bring, ask:
What needs to work differently for us to accomplish what we’re planning?
That may mean changing how work is staffed, scoped or managed. A process may need to be simplified. Responsibilities may need to shift. A tool or system may no longer support the way the team works. Leadership may need better visibility into project performance, capacity or financial results.
Focus on the changes that will have a meaningful impact on the business, then determine who owns them, what happens next and how you’ll know whether they’re working.
Put the pieces together
| Look at | Understand | Determine |
|---|---|---|
| This year’s work and results | What worked as expected and what did not | What should inform next year’s assumptions |
| Expected work and pipeline | What is expected in the months ahead | What capacity and skills may be needed |
| Project performance | Where actual results differ from expectations | What deserves a closer look |
| How work gets done | Where time, money or capacity is being lost | What could be simplified or changed |
| Current operating practices | What still serves the business and what does not | What needs to work differently next year |
The result doesn’t need to be a complicated document, just an overview that gives leadership a clearer view of the business and a manageable set of actions:
What needs to change? Who owns it? When does it need to happen? How will we know it’s working?
Use what you know
There will always be things you can’t predict: a project that gets delayed, a client that changes direction, an unexpected opportunity or a shift in the market.
Good operational planning won’t eliminate that uncertainty. It will give you a better understanding of the business you have today and what needs to be in place for the year ahead.
Use what you know. Learn from what you’ve experienced. Plan what comes next.