Each January, department heads around the country and the world sit down to craft their annual plan. Unfortunately, many of us start our annual planning with a great big sigh.
Sure, some organizations launch annual planning in October or November, or perhaps they follow fiscal years that vary from calendar years. But even so, January still brings a moment of fresh reflection. We’re rested up from the holidays. We’ve made our New Year’s resolutions. We have twelve months of untapped potential ahead.
We should be enthusiastic and ready to jump into the new year!
So why does annual planning so often feel like watching a sitcom rerun? Uninspiring and repetitive.
The answer lies not in the annual planning itself, but in the planning that you’re not doing first. Strategic planning.
Annual Plan vs Strategic Plan
An annual plan details the goals and objectives for an organization, department, or even individual team member over a 12-month period.
In contrast, a strategic plan provides an overarching vision for an organization and a roadmap to achieve that vision over a 3-5-year period.
Annual plans and strategic plans include many of the same elements, such as goals, objectives and outcomes. These tools may go by different names, such as SMART goals, KPIs, or OKRs. But they’re all designed to set measurable and achievable objectives that can be regularly assessed to evaluate progress.
Read more: What Are Evaluation Methods?
Despite these similarities, annual plans and strategic plans serve very different purposes:
- Period: The most obvious difference between annual and strategic plans is the timeframe. An annual plan, by definition, covers a 12-month period. A strategic plan traditionally covers 3-5 years.
- Process: Annual plans are designed to coordinate work across and within departments. That means individual departments come up with goals and share those across teams for awareness and feedback. Strategic planning, however, should be a true consensus-building process. It’s not about information sharing, but rather about co-creating a shared vision.
- Vision: Organizations can create annual plans at the organization-level, department-level, and individual-level. These plans should all nest together to paint a clear guide for who will be responsible for doing each activity critical for achieving stated goals. A strategic plan, on the other hand, should be an organization’s north star. It paints a vision for where an organization wants to be in 3-5 years—and the strategies that can get it there.
In short, strategic planning is the big vision that should guide the nuts and bolts of annual planning.
How do Annual Plans and Strategic Plans Fit Together?
Ideally, an organization’s annual planning process should flow from its strategic plan. But what if you don’t have a strategic plan?
Yes, organizations without a strategic plan can and do undertake annual planning. But to be honest, annual planning without a strategic plan can be a drag. Without that big, shared vision, it’s far too tempting to copy and paste goals, objectives and outcomes from prior years. Especially if we already know we can achieve them.
When your annual planning starts from the basis of a strategic plan, there’s a kind of magic that can happen. That’s because strategic planning:
- Creates a mindset shift, encouraging us to think beyond our current day-to-day reality and instead imagine what’s possible.
- Increases ambition by providing a clear vision for the type and scale of impact our organization can have in the future.
- Invites curiosity and creative thinking, challenging us to find new ways to both solve thorny problems and cover baseline operations.
- Encourages evaluation not as a tool to make sure everyone is doing their job, but as a way to discover the most effective strategies to accomplish shared goals.
So, to get ready for a great annual planning process, put aside the notebook and close that spreadsheet. It’s time to get a strategic plan.