5 Step Annual Planning Process

A five-step process to align go to market functions with strategic growth priorities.

Although Annual Planning happens every year we find that many of our clients wait too long or are unsure of where to start the annual planning process. Having worked with hundreds of clients on their annual planning process, we have a proven, practical methodology that any organization can apply to their business situation. 

At a high level, there are five steps in the Annual Planning Process

Step 1: Establish Fact Base

Even the most aligned organizations require the leadership team to evaluate and agree on where they are in their growth. A path forward when the CEO and Chief Revenue Officer believe they are in different places. With this understanding, you can make stage-appropriate bets. Establish the fact base by evaluating your company’s leading (ie. percentage of revenue invested in sales and marketing, sales rep turnover) and lagging (ie. annual bookings per FTE, revenue mix) indicators you can see how you are executing against your KPIs.

Step 2: Inventory Bets

Once the Fact Base is established, the go-to-market functions of Sales, Marketing, Product, Finance, and Customer Success make their bets on how and where to contribute to growth. The Executive Team reconvenes to discuss and evaluate the possible levers to exact strategic priorities.

Step 3: Place Bets

The CEO and CFO take the inventoried bets and evaluates them based on time to realization, level of effort, and impact to revenue. The goal is to narrow the list of bets to the top 3-5 imperatives that are large impact, achievable, and aligned towards a common commercial goal.

Step 4: Build Revenue Plan

Based on the identified imperatives, the growth team will define the growth targets. Bottoms up capacity modeling is the foundation of building a revenue plan – it helps growth teams to understand what to adjust to meet the tops down target. This also identifies gaps to the tops down target from which to create a revenue plan of how growth teams will strategically align to execute the bets and achieve targets.

Step 5: Execute & Rollout

It is one thing to create the strategic direction, but many businesses fail to execute the strategy. You have done the hard work of identifying where you want to go and where to place your bets, now it is time for the teams to execute that plan. Create a detailed execution cadence to align the growth teams to drive desired results. SBI has a seven step best practice sequence for Annual Planning.

Regardless of macroeconomic or market conditions, the annual planning process remains the same. One of the biggest mistakes we see clients make is establishing the incorrect fact base. In later posts, we will share ways to ensure you place yourself in the correct growth stage, so your bets align correctly.