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WHY ANNUAL PLANNING FAILS (AND WHAT ACTUALLY WORKS)
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WHY ANNUAL PLANNING FAILS (AND WHAT ACTUALLY WORKS)I’ve heard more than one person say that annual planning is a waste of time. The first time, it caught me off guard. The second time, I shrugged it off. But when I started hearing it from smart, successful owners, I started to listen. Their frustrations all sounded the same: “By the time the plan’s in place, it’s already outdated.”
“The world changes too fast and the plan slows us down.”
“We spend weeks planning and then everyone just goes back to doing what they were doing.”
“We make a budget, but we never actually look at it again.”
“It’s all theory. We need to be in motion.”
And they’re not wrong. Most planning processes do feel like a waste. They force you into an annual rhythm that doesn’t match the pace of the business. The real problem is not planning itself, but bad planning habits.
So people rebel. They stop planning altogether. They equate agility with spontaneity. But the truth is: the absence of planning isn’t agility, it’s drift. That’s why I started rethinking the planning process altogether. Instead of treating it like an event, what if we treated it like a cycle? A rhythm that keeps the business aligned no matter how fast things change. Because the companies that do planning right (the ones who use it as a living process), move faster, not slower. They don’t treat the plan as a static document but a living organism. They don’t get blindsided by surprises. They don’t lose focus mid-year. They operate with more confidence, because they always know where they’re headed and how to adjust along the way. That’s the essence of the Planning Cycle. Last week we talked about the three overlapping cycles: Planning, Operating, and Growth. Planning sets the direction. Operating builds the discipline. Growth tests how strong your foundation really is. And then, the loop begins again. Today we’re going to dig into the planning cycle a bit more on it’s own, then follow it up digging into the operating and growth cycles in the next two weeks. THE THREE GOALS OF PLANNINGNow back to the Planning Cycle. It exists to give you three things:
Planning isn’t about predicting the future — it’s about creating clarity so your team can move faster when it changes. THE RHYTHM OF THE PLANNING CYCLEPlanning is less about the document and more about the drumbeat. Each rhythm builds on the last, keeping the team anchored through the chaos of growth. ANNUAL RESETThis is the anchor point: the moment you step back to realign your vision, strategy, and numbers. It’s the natural bridge between one year and the next. It’s the foundation of the planning cycle and when you don’t do this, the rest of the steps are empty. It’s the point where you zoom out, take stock of where you’ve been, and reset your direction for where you’re going next. Last year’s PlanningOS walked through this in detail, so if you want to go deeper, you can revisit that series. But at a high level, this looks like: If you followed last year’s PlanningOS series, this should feel familiar:
To set your vision, you look at the past, then the future desires. From that, you identify your core areas of focus and desired values. We introduced a few tools in The Foundation article from the PlanningOS series to help you walk through this process. Once we’ve identified these things, we need to determine what to prioritize in the next 12 months. This goes back to our goal of “focus.” If everything is important, nothing is. So this process forces us to choose the priorities, which then determine how we build our plan, budget, and forecast. We go deep on the budget process in The Budget article. Once we’ve developed a baseline budget, it’s time to add all the other elements in and predict your revenue going forward. Read this article to better understand that process. All of these things are great tools, but if the budget is completed then ignored, you wasted a ton of time. And I can tell you, once you’ve done this a few times, the actual process of planning becomes a drag because no one commits to it. This means we have to:
We go deeper on this in the Keeping Score article. Keeping score keeps the vision, focus, and financial reality visible throughout the year, ensuring your plan doesn’t become another document lost in the Google Drive abyss. This process can be hard. It can be time consuming. But when you get to the end, we’re just at the beginning. This should be the start of an annual rhythm. You don’t plan once and execute. You plan continuously, aligning each quarter and month to this foundation. This brings us to the next phase of the planning cycle. QUARTERLY REALIGNMENTOnce the plan is set, we need quarterly realignments. Every 90 days, pause and reorient. This is what helps ensure we stay on track and that it doesn’t become outdated. Revisit the plan, test assumptions, and decide what still matters.
Quarterly planning is your truth serum: it forces you to face whether your plan still fits reality. We want to make sure we’re looking at the plan and comparing it to what has changed to determine if the plan is still the best course. If it’s not… no problem. Take the new path. But too often, when we don’t have a plan, we’ll convince ourselves the shiny object is the right think. We’re really good at rewriting history like that. By having the written plan, you’re forced to assess your current self verse your past. MONTHLY REVIEWIf the quarterly review is a recalibration, the monthly review is a pulse check.
Monthly reviews turn the plan from a static document into a living system that adjusts continuously. You’re mostly not scrapping plans, but making small adjustments to stay on track with your plan. Slightly behind? Adjust your inputs to catch back up. Ahead? Stay on course. WEEKLY HUDDLEYou could argue this isn’t really “planning” but instead part of operations and I think you’d be right. But I wanted to hit on this to draw the connection that these weekly team meetings should be connected, in some way, to your annual goals. They keep everyone focused on what matters right now to reach that quarterly or annual goal you’re striving for. Most high-performing businesses have some sort of weekly staff meeting to stay aligned. All I’m asking is that you bring this KPI tracking into these weekly discussions. Each week, we review our KPIs and ask three questions:
End each meeting by reaffirming priorities for the week and connecting every action back to the quarter’s focus. We’ll talk more about this next week, so I’ll stop there. CREATING A CULTURE OF PLANNINGA great plan is helpful, but if the team isn’t committed to the plan, you’ll eventually fail. If the owner or leader is the only one driving the plan forward, momentum will stall. Instead, we need to think in terms of a great planning culture. A culture where the whole team is bought into this idea can be transformational to a business. I’ve been in both situations and the difference is stark. In one, you’d spend weeks planning for the annual meeting, introduce it, to only see it fizzle after a matter of weeks. In the other, the monthly team meetings had real accountability not just driven by the leader. If you didn’t do what you said you would… why? Feet the fire. In the first, stagnation was only a matter of time. In the second? Growth inevitable. When planning becomes part of the company’s rhythm, clarity never fades. People know where the business is headed, what matters most, and how success is measured. Reflection and recalibration become normal, not special. And when you build that kind of culture, something powerful happens: you naturally transition to the next cycle. Your planning rhythm feeds your operating rhythm, and your operating rhythm sets the foundation for growth. Next week we talk the operating cycle and how to turn your plan into a machine. Thanks for reading–see you next week, Work with meNeed more than this newsletter? You may not know, I have other ways we can work together. Check them out:
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