Why does planning require a “season?”

Posted on November 15, 2021.
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It’s November which, for most companies, means it’s planning season. Planning season has been and continues to be one of the greatest collective fiction creation efforts in modern business. It’s monumental and all-consuming. Teams and leaders get together to determine:

  • Required budgets for next year
  • Finite (and often fixed) lists of features, products and services to build with these budgets
  • ROI on all of these efforts
  • Dates for the delivery of these features
  • Teams and personnel that will do the work
  • Business cases to justify the work
  • …and many other deliverables predicting what the company will focus on next year

This is an enormous task that consumes much of the top half of the organization for the entirety of November with parts of October and December sneaking in there for some corporations as well. Is it any wonder we call it “planning season?”

What’s the ROI on planning season?

And what do we get for these efforts? In short, nothing particularly productive. Budgets get finalized. Teams commit to scope and then do whatever it takes to hit those fixed scope deadlines with the intended ROI. New information inevitably appears along the way, challenging the committed plan, and often gets ignored because it will force the plan to change. We don’t normally accommodate for change in the planning process. Instead, we work to fill time with as much “productivity” as possible ignoring the realities of the volatile and continuously changing world we operate in. 

Think back to the work you did this year. How much of it lived up to The Plan? How many adjustments did you have to make along the way to your roadmap, budget and ROI targets? Now compare that with the time you spent coming up with all of those things last November, negotiating them with your colleagues and executives, formalizing them in templates, massaging them to meet stakeholder expectations and then publishing them in proverbial stone for your teams to consume. Was it worth it? Did you nail The Plan? In all likelihood, the answer is no. 

Planning should be continuous

The plan that emerges out of planning season is filled to the brim with assumptions. We assume:

  • Our markets are stable
  • Consumer consumption patterns will remain predictable
  • The competition will match pace with us
  • No black swan events (hello COVID!)
  • A specific level of effort will yield successful products and services

This is a partial list but you get the idea. Now, obviously these are not blind guesses. We have history to guide us and a keen eye on emerging trends, technology, markets and consumer behavior to shape our opinions but let’s be honest with ourselves: the plan that emerges is just that, our (informed) opinions. 

We are going to be right. We are also going to be wrong. Instead of waiting a year to find out where and by how much, we must reduce our planning cycle time. If you’re practicing annual planning then literally anything shorter than a year is an improvement. Try bi-annual planning. If you’re feeling motivated, give quarterly planning a shot. 

Now obviously we don’t want to recreate planning season 2 or 4 times a year. Along with a decrease in planning cycle time, we also reduce the amount of effort that goes into each planning effort. We admit that we’re working on hypotheses. We are biased towards action. We build experimentation and learning into each quarterly effort to collect evidence that will inform us on the validity of our hypotheses. 

Each shorter planning cycle reviews the previous cycle’s plan, the evidence we’ve collected along the way, the progress we’ve made and any real-world changes that have taken place. Those facts get baked into the next quarter’s plan and the course is adjusted to reflect this new data and insight. This simple though admittedly complicated change to the way most organizations work dramatically increases a company’s agility — it’s ability to respond to change in the face of new evidence — while at the same time reducing the risk of spending time, money and effort on ideas that won’t drive success. 

We still need strategic direction

Shorter planning cycles don’t absolve us of the need for strategic direction. In fact, they help inform the original strategic vision’s accuracy with evidence. As teams review their progress on a quarterly basis, the organization gets a clearer sense of whether the original strategy is the right one, realistic and on track for success. Strategic vision helps us prioritize what we’ll work on each short cycle. The more frequent reviews of The Plan help us determine not only how to adjust our work but whether the strategic vision needs adjustment as well. 

Planning season is too risky for a modern, software-driven world

In a world of high certainty and low-risk, like manufacturing, annual planning makes a bit more sense. For the majority of other businesses and organizations, those driven by software, there is too much volatility to rely on once-a-year planning rituals. Instead, shorter, lighter weight cycles of planning informed by evidence reduce the risk to our work and success.