Annual Planning: The 1, 3, & 10

The 4th quarter of every year represents both the final push to complete all your goals for the year as well as a chance to set and clearly define new ones for next year. It’s the time for annual planning. If you’re already done, just getting started, or somewhere in between, here are some things you might consider.

As an EOS company, we annually asses each of these yearly horizons: the 1, 3 & 10. This gives us vision, focus, and a great basis for decision making.

The 10-Year Target

The 10-Year Target sets the tone and filters all else. Ten years from now, where do you want your company to be? What should it look like? I find this is usually the most aspirational and least clearly defined of the intervals but serves a valuable filter for the other two. You can think of the 10-year goal as the north star, the direction you’re headed, and conversely as a way to say where you’re NOT going. This one should be scary and overwhelming. In the parlance of Jim Collins, it should be your BHAG (Big Hairy Audacious Goal).

The 3-Year Picture

The 3-Year Picture is next and is still somewhat vague like the 10-Year Target, but begins to quantify some things such as future revenue, profit, and any other key measurables. We like to talk about things like how big the team will be, what it will feel like internally, what future roles in the Senior Leadership Team will look like, what long-term issues will we have been solved, and what our client roster will look like. Like I said, it’s part vague and aspirational, part quantifiable, and helps you to keep looking out past the current year while making decisions without being as overwhelming as the 10-Year Target. It also serves as an acid test for the 1-Year Plan in that the 1-Year Plan must make meaningful progress towards the 3-Year Plan or else it’s not challenging enough and shows you you’ll most likely miss your 3-Year Plan due to too little progress in year 1.  

The 1-Year Plan

The 1-Year Plan is by far the most detailed of the three and includes things like your marketing plan, staffing plan, and financial pro formas. This is where you get granular across the sales, operational, and financial areas of the business so that you have something concrete to measure against to know if you’re on or off track as the year moves along. This is a great time to dig deep in the data and discover insights into your business. In addition to the creation of the 1-Year Plan in all of its detail, you also need to regularly measure to see if you’re on or off track. Two tools I use to do that for Syrup are Proposable (for sales) and LivePlan (for financial results). The real-time information and ability to measure against targets both give you the information you need to make adjustments as the year goes on.  

What are some things you think about during annual planning? What tools have you found to be helpful during this process?

Jason Ogden

As the resident left-brainer, Jason uses his corporate and financial background to keep operations running smoothly. With a keen sense of people, process and sports analogies that always relate to business, he serves Syrup by managing the team, the numbers and sales. When we are lucky, Jason provides the team with a quick kung-fu lesson.

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