• Agile & Scrum Basics

That way your annual plan doesn’t end up in the bottom drawer right away

The yes-the-year-has-flown-by-again-and-the-new-year-is-on-the-door moment. Do you recognize it? It means in this fourth quarter for most of us: make annual plan, with budget. Yet from my experience, making such a (traditional) annual plan mostly takes a lot of time and ultimately yields few results.Let’s get off to a nice ‘bold’ start: most annual plans are wasted ink, a mandatory sop to the MT and soon end up in the trash. In this article, I tell you about how I wrote my first ever annual plan, what lessons I learned over the years and how I now handle annual plans Agile.

My traditional plan became irrelevant before the ink had even dried

“Gert-Jan, you write the annual plan with budget,” said the employer of my first serious job. With those words he immediately caused an increased heart rate. I didn’t quite know how to go about it, how I would get it cycled through the MT. But fortunately, I quickly learned some forms (or call it tricks): I looked back at what had been done the year before and this year, and copied that into next year. A bit of pluses and minuses with numbers and then underpinning with detailed descriptions of projects. A time-consuming job.

But not for nothing, because he I got an agreement from the MT. ‘The spoils are in, pat on the back GJ,’ I complimented myself. Those annual plans went well for years. I thought. Because to be honest: not much came of the annual plan. Simply put: my plan was no longer relevant before the ink had dried. The world was changing. We had to keep coming up with different initiatives and also adjust the budget frequently. Those compliments to myself were already starting to rub off more and more.

Still, that adjustment and change worked out quite well. I was given a lot of freedom by the employer to keep polishing with the team. Deviating from the annual plan was okay.Lucky me, but I ha all the research, annual planning and budgeting behind me. Wasted time, an energy drain. ‘Fine that I can adapt quickly, but the hard work before was only to get approval on a plan that would never see the light of day anyway. That’s not for me’ then became my conviction. Time for an Agile approach to the annual plan.

A practical Agile approach

So it was time to apply the experiences I gained in Agile working and the Agile developments I experienced myself to the creation of annual plans. In order to actually be flexible and move with changes in the future. To base plans for that future not just on the past. And so I said goodbye to plans cast in concrete with goals, projects and budgets described in detail.

Now I do it very differently. I start with an Objective for the new year. For example:
By 2022, help organizations and teams with the practical application of Agile working so that their impact increases and team members’ job happiness increases.

Then we link a flat financial and aspirational goal to it. This may be a stretch goal. So not too frugal and too cautious, but such that you have to put on your sneakers to meet it. From there, based on data, a budget rolls out. A budget based on percentages of sales. So for marketing, for example, we make 15% of sales available. That then provides a nice amount of money to come up with initiatives that will bring us closer to our Objective and result. For the first quarter of the new year, we work this out in initiatives (stories and epics):

• what value do we want to deliver?
• what do we expect?
• what are we going to do?
• how do we measure success?

Then every quarter we adjust the initiatives and also the budgets as needed. Especially when there is more room (for example, because sales are up and so there is more to spend as a percentage) to develop additional initiatives. That only gives more room for growth. This way, making a plan and preparing a budget is a joy for me. Every year again. Every quarter again. Energizing and nice and practical.

Do you also want to make your plan this way every year and quarter?

Admittedly, you will have to include the system around you, including upper management, in this process. Because a detailed plan is still often expected there. With ditto substantiation.

Wondering how we can get your MT’s agreement on an Agile Annual Plan together? How to stop wasting time and energy on the traditional annual plan that ends up in the trash anyway? Call or email me. Then we’ll get into your situation. Looking forward to it.