📅 Annual Strategic Planning

Define strategy and allocate resources for the year ahead.

It’s mid-Q4! Tis the season of latkes, Christmas lights, and annual strategic planning - a key part of our operating model! Annual strategic planning is universally dreaded, but not because team members don’t like coming together to brainstorm goals and how to hit them. People naturally love engaging with their teammates and ideating, but companies’ processes for strategic planning are often cumbersome, disorganized, and ineffective, zapping creative energy. The good news: it doesn’t have to be this way. If we understand our company’s equation and take a methodical approach to programming, annual strategic planning can be straightforward and serve to inspire and align everyone.

In that spirit, below is the outline of a program plan for a growth stage startup, including the tenets and program phases of a best-in-class annual strategic planning program. Let’s get to it!

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Annual Strategic Planning Program 
Objective: Define our strategy and allocate resources for the year ahead.

📜 Tenets
To start, some first principles: these tenets are fundamental truths that are important to keep in mind to design an effective strategic planning program:

• Goals must be anchored in the physics of the business.
  Earlier this year, I wrote about how every company can be boiled down to an equation of metrics and the most effective companies explicitly organize around their equations. A company’s equation is its physics - all the connected input and output metrics which describe its environment and machinery. When goals are rooted in these physics we mathematically ensure they complement each other and ultimately contribute to business objectives.
  
  Once a company’s equation is established, goaling based on it is straightforward. Simply determine where each of the output and input metrics are currently, then set goals for the highest level output metrics, then have these cascade down the equation and set goals and constraints for all of the input metrics below. Choose which inputs to goal on by identifying where there’s the most headroom in impact-per-effort terms (a strategy framework can help with this!), and satisfy that the combination of input goals you set - factoring that every goal probably won’t be achieved - is consistent with output goals.
  

• There must be a single source of truth.
  Every company must have one canonical company strategy document and one canonical company dashboard. Having multiple sources of this foundational information is confusing, leads to misalignment, and increases the risk of staleness and inaccuracies (which cause a debilitating lack of confidence in the content and more time wasted sorting out discrepancies).
  
  Moreover, strategy artifacts should be evolutionary rather than revolutionary. We can draw lessons from software engineering best practices here. When we make changes to a product, we don’t rewrite the whole codebase. We write as small a part of it as we can through minimal pull requests rather than wholesale rewrites. Strategy is like that too. We shouldn’t rewrite key documents and dashboards every period, and certainly not everytime we come upon a clever analysis or product idea. Instead, we should structure artifacts to incorporate adjustments as we progress and learn, thereby setting us up to compound knowledge and avoid reinventing wheels.
  

• Everyone must understand the process and their role in it.
  Participation is key! The more team members who participate and the more substantially they do so, the more effective (and effectively executed!) the resulting strategy will be (provided there's a strong prevailing understanding of the business’ physics, and that the process and expectations for planning are clearly communicated – more on this below).
  

• Make it fun!
  If you bring all the right people together, ensure they can focus, and give them the data they need to participate, strategic planning can be a place where voices are heard, great debates ensue, and genius ideas are surfaced. 

⌛ Program Phases
With our tenets in mind, we can outline the planning program into phases and the deliverables of each. The program below is designed for an archetypal company of ~200, but it can scale up or down. I know what you’re thinking. SIX PHASES! This may sound like a lot, but - with proper infrastructure, preparation, and support - the whole process should take no more than 2 weeks and only marginally cut into IC (individual contributor) productivity.

Phase 0: Preparing Teams
Objective: Align everyone around the process.
Owner: Chief of Staff (or similar)
Deliverable(s): Strategic planning program prep materials for the entire company that include: phases, dates, owners, deliverables, templates for deliverables, and any useful resources.

💡Pro Tip: Communication is a really important part of the process! Prior to kickoff, consider communication channels for sharing prep and updates. Comprehensive emails, an easy to find wiki page, a #2023-planning Slack channel, and an All Hands presentation are all great channels for getting the word out, engaging the team, and sharing regular updates to let everyone know how it’s going.

Phase 1a: Product & Outreach Retros
Objective: Evaluate what input goals were hit or missed in the ending cycle and why.
Owner: Data Team (with inputs from Product, Outreach, G&A)
Deliverable(s): A retro document for each product, outreach, and G&A area explaining what input goals were hit or missed and why.

💡Pro Tip: Evaluating performance on input and output metrics and doing the understanding work of why is a good way to think about the Data Team’s overall role in the operating model. They should evaluate in partnership with teams but making them point ensures that evaluation is objective.

Phase 1b: G&A Retro
Objective: Complete an analysis of annual spend/resourcing and ROI.
Owner: Finance & Data
Deliverable(s): Updated financial model (this will be the first draft to be finalized as part of Phase 6)

Phase 2: Competitive Landscape Analysis
Objective: Analyze the competitive landscape and how it’s evolving.
Owner: Product (with inputs from Data)
Deliverable(s): Competitive landscape document or deck

Phase 3: Output & Input Goals
Objective: Update the company’s equation and set goals for the highest level output metrics (implying input metric goals) and choose which input metrics to work on. Use deliverables from phases 1-2 to inform.
Owner: CEO & Leadership Team (with inputs from Data)
Deliverable(s): An updated equation with metric goals for all outputs and inputs

💡Pro Tip: Schedule your Leadership Team offsite/onsite during this time and center programming around this activity.

💡Pro Tip: Phases 1-3 can be wrapped up quite nicely into an All Hands presentation to prepare everyone for the second half of the process and bring people along.

Phase 4a: Product Inputs
Objective: Align on which inputs each product team will work on, how they will work on them, and what resources they need to succeed.
Owner: Product Teams (Led by managers)
Deliverable(s): Metric goals for all inputs that equal output goals for product area metrics and corresponding resource requests.

Phase 4b: Outreach Inputs
Objective: Align on which inputs each outreach team will work on, how they will work on them, and what resources they need to succeed.
Owner: Outreach Teams (Led by managers)
Deliverable(s): Metric goals for all inputs that equal output goals for outreach area metrics and corresponding resource requests.

Phase 5: G&A Inputs
Objective: Evaluate resource requests and allocate the resources necessary for each input we’re working on.
Owner: Finance & People Ops
Deliverable(s): Metric goals for all inputs that equal output goals for G&A area metrics and corresponding resource requests / Final HC allocation / Updated financial model

Phase 6: Roadmapping
Objective: Roadmap the products and initiatives to hit input goals / milestones like we would any other quarterly cycle.
Owner: Product & Outreach Teams (Led by managers)
Deliverable: A forecast (including milestones) and corresponding roadmap for each input that we’re working on.

💡Pro Tip: Get as specific as possible with forecasts and identify key milestones.