Work it through: Running Annual Planning

Annual planning as a chain of decisions instead of a writing exercise: surface the assumptions, make the real choices including what to stop, draw the logic on one page, then commit to numbers that report back every quarter.

Seven steps, in the order the playbook gives them. Your work stays in this browser until you save it to a file.

1Your ducks
2The homework
3SWOT Analysis
4Playing to Win (Strategy Choice Cascade)
5Strategy Maps
6Objectives and Key Results (OKRs)
7The review date

Your ducks

Start with what the people believe, what the paperwork says and what actually happens. The issues where your ducks disagree are the ones to carry into the homework.

You have not filled in the ducks sheet yet.

Start with your ducks

The homework

What has to be found before any of the four frameworks is worth running. Put a name and a date against each one, and tick it when you have it in your hands.

The ducks

Talk to the people involved, and to more than one of them.
WhoBy when
Read the documents, including the emails nobody thinks of as documents.
WhoBy when
Go and watch what actually happens.
WhoBy when

For SWOT Analysis

A defined subject and scope: the whole organisation, one business unit or one product, with the boundary stated before analysis begins.
WhoBy when
Evidence on internal capabilities: financial performance, operational data, customer feedback, skills and assets, benchmarked against competitors rather than against last year.
WhoBy when
External intelligence: market trends, competitor moves, regulatory changes and technology shifts, ideally drawn from a prior PESTEL or Five Forces pass.
WhoBy when
Honest participation from people close to the weaknesses, since a SWOT written only by those invested in the current strategy will flatter it.
WhoBy when
An explicit question the analysis must answer, such as whether to enter a market or where to invest next year.
WhoBy when

For Playing to Win (Strategy Choice Cascade)

A map of the realistic playing fields: segments, channels, geographies and stages of the value chain the business could occupy.
WhoBy when
Customer and competitor evidence solid enough to say how the business could win on a chosen field, whether through lower cost or differentiation.
WhoBy when
An honest audit of current capabilities and management systems against those the candidate strategies would require.
WhoBy when
A financial baseline and a working definition of what winning would look like against it.
WhoBy when

For Strategy Maps

An actual strategy: a chosen customer value proposition and a view on where the organisation will win, arrived at before the mapping starts.
WhoBy when
A candidate set of objectives for each perspective, small enough to fight over.
WhoBy when
Leadership time in the room together, because the value of the map is largely in the argument about the arrows.
WhoBy when
Baseline data on current performance in each perspective, so the map starts from reality rather than aspiration.
WhoBy when
Knowledge of the intangible assets available: people, systems, culture, since the bottom layer is where every chain begins.
WhoBy when

For Objectives and Key Results (OKRs)

A clear strategy or annual direction from which quarterly objectives can be derived, or the exercise becomes goal-setting in a vacuum.
WhoBy when
Baseline data for anything that will serve as a key result, with a named owner for each metric.
WhoBy when
A cadence commitment: time for quarterly setting, weekly or fortnightly check-ins, and an end-of-cycle scoring session.
WhoBy when
Leadership willing to publish their own OKRs first and to be scored in public alongside everyone else.
WhoBy when

Step 1 of 4: SWOT Analysis

Open with SWOT precisely because it is quick and everyone knows it. The value at this stage is getting the team's conflicting, unstated assumptions onto a single page before the real decisions start. Keep each quadrant short and evidenced, and pay attention to the pairings: strengths against opportunities show where to attack, weaknesses against threats show where you are genuinely exposed. Treat anything unevidenced as a hypothesis. A strengths list that filled up easily usually means the bar was set at 'things we do'.

Watch forSWOT is the warm-up act, and the trap is mistaking it for the strategy; a full grid is a shared picture, nothing more.

Strengths

Weaknesses

Opportunities

Threats

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Step 2 of 4: Playing to Win (Strategy Choice Cascade)

This is where planning becomes choosing. Five linked questions: winning aspiration, where to play, how to win, what capabilities, what management systems. The middle pair does the heavy lifting, and the two must be decided together, since a where without a how is a wish. Look hard for the words 'we will not'. In my experience an annual plan without a stop-doing list is a to-do list wearing a suit, and the calendar will treat it accordingly.

Watch forWatch for an aspiration everyone applauds sitting on capabilities nobody has funded; that is a poster, and posters do not compete.

What you wrote earlier

SWOT Analysis

(not filled in yet)

What you need first

Ticked on the homework list above.

A map of the realistic playing fields: segments, channels, geographies and stages of the value chain the business could occupy.
Customer and competitor evidence solid enough to say how the business could win on a chosen field, whether through lower cost or differentiation.
An honest audit of current capabilities and management systems against those the candidate strategies would require.
A financial baseline and a working definition of what winning would look like against it.

Set the winning aspiration
Generate where-to-play and how-to-win pairs
Test what would have to be true
Choose, and define the core capabilities
Build the management systems

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What comes out, and how to read it

A one-page cascade of five nested choices, each consistent with and reinforcing the others, plus the shortlist of conditions that would have to be true for the strategy to win and the measures that watch them.

Read where-to-play and how-to-win first and as a pair; they do the heavy lifting, and the other three boxes exist to motivate, enable and sustain them.
Test coherence in both directions: an inspiring aspiration with unfunded capabilities is a poster, and strong capabilities serving no stated advantage are overhead.
Look for the words 'we will not'. A cascade without exclusions has not made choices.
Check that at least one tracked condition could realistically fail; a strategy whose assumptions are all safe is describing the past.

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Step 3 of 4: Strategy Maps

The choices now need to travel. A strategy map puts the whole logic on one page: the capabilities you will build, the processes they enable, the customer outcomes those deliver, and the financial results that follow, with the cause-and-effect arrows drawn in where they can be challenged. Drawing the arrows is the point. An objective with no arrow leaving it is a hobby, and it is far cheaper to discover that in the planning room than in next year's accounts.

Watch forThe top band is an effect; if your plan's first move is 'grow revenue', the map is upside down.

What you wrote earlier

SWOT Analysis

(not filled in yet)

Playing to Win (Strategy Choice Cascade)

(not filled in yet)

What you need first

Ticked on the homework list above.

An actual strategy: a chosen customer value proposition and a view on where the organisation will win, arrived at before the mapping starts.
A candidate set of objectives for each perspective, small enough to fight over.
Leadership time in the room together, because the value of the map is largely in the argument about the arrows.
Baseline data on current performance in each perspective, so the map starts from reality rather than aspiration.
Knowledge of the intangible assets available: people, systems, culture, since the bottom layer is where every chain begins.

Set the destination at the top
Choose the customer value proposition
Identify the critical internal processes
Specify the learning and growth foundations
Draw and challenge the causal links
Attach measures and revisit the hypotheses

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What comes out, and how to read it

A one-page causal model of the strategy: objectives in four stacked perspectives connected by explicit bottom-up cause-and-effect arrows, ready to be measured through a balanced scorecard and communicated across the organisation.

Read the map bottom-up, the direction the arrows run: capabilities enable processes, processes deliver the customer value proposition, and customer outcomes produce the financial results. The top band is an effect, never a lever.
Interrogate the arrows before the boxes. An objective with no arrow leaving it is a hobby; an arrow with no mechanism behind it is a hope; and the strategy is only as strong as its weakest defended link.
Treat the whole map as a testable argument. When results contradict a link, the finding is strategic intelligence about the business, and redrawing the map is the system working.

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Step 4 of 4: Objectives and Key Results (OKRs)

Finish by converting the choices into quarterly commitments: a handful of objectives, three to five measurable key results each, published where every team can see them. Publication is half the mechanism, because cross-team collisions surface in week two instead of at the deadline. Score honestly at the end of each cycle and read the misses for information. A perfect scorecard is a warning that the targets were set too low, which was Grove's view and is also mine.

Watch forResist giving every team OKRs for everything they do; business-as-usual does not need a stretch goal, and drowning the breakthrough work in routine metrics is how focus dies.

What you wrote earlier

SWOT Analysis

(not filled in yet)

Playing to Win (Strategy Choice Cascade)

(not filled in yet)

Strategy Maps

(not filled in yet)

What you need first

Ticked on the homework list above.

A clear strategy or annual direction from which quarterly objectives can be derived, or the exercise becomes goal-setting in a vacuum.
Baseline data for anything that will serve as a key result, with a named owner for each metric.
A cadence commitment: time for quarterly setting, weekly or fortnightly check-ins, and an end-of-cycle scoring session.
Leadership willing to publish their own OKRs first and to be scored in public alongside everyone else.

Set a small number of objectives
Attach measurable key results
Align rather than cascade
Track in the open
Score and grade honestly
Reset and learn

0 of 6 steps filled · 0 of 4 inputs in hand

What comes out, and how to read it

A published, measurable statement of what the organisation is trying to change this cycle, a live view of progress against it, and an end-of-cycle scorecard whose misses carry as much information as its hits.

A perfect scorecard is a warning, not a triumph. Grove treated consistent full marks as evidence the targets were set too low, and the convention that 0.7 on a stretch key result is success exists to protect ambition.
Read the misses for information. A 0.3 with a clear account of why is worth more than a 0.9 nobody can explain, because it tells you something about the business you did not know in week one.
Look at where OKRs originated. If everything flowed top-down, the alignment stage did not happen and next quarter's ownership problem is already visible.

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The review date

Set the date you will come back and ask whether it worked. Put it in your diary; this site will not remind you.

Review date

Print the dossier

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