Annual + quarterly planning

The annual plan no one follows and the quarterly plan everyone ignores are the two most common artifacts of planning theater. A good planning cadence does exactly three things: sets direction, forces trade-offs, and generates the commitments the rest of the operating system runs on. Everything else is optional.

The three horizons

• Annual, the direction, the bets, the budget envelope. Updated once a year; revisited midyear.
• Quarterly. OKRs, headcount, major initiatives. Updated every 90 days.
• Weekly, the WBR against the quarter's plan.

The weekly execution cascades from the quarterly plan. The quarterly plan cascades from the annual. If any link in that chain is broken, the whole thing is noise.

The annual plan, what it must contain

1. Where we are

One page. What happened last year. What worked, what didn't. Wins and misses. Not marketing, diagnosis.

2. The world we see

Market, competition, customers, regulatory environment. What's changing? What assumptions from last year turned out to be wrong?

3. Where we're going

The thesis. One paragraph that says: "Because of X and Y, we're going to do Z. We believe this will produce outcome W by the end of the year."

4. The 3–5 bets

The major initiatives the year turns on. Each with: outcome, owner, budget, and a go/no-go date. Everything else in the company either supports one of these bets or is just maintenance.

5. The financial frame

Revenue target, operating budget, gross margin target, headcount plan. Not the full model, the top-line envelope that tells everyone what's affordable.

6. The risks

Three to five real risks with mitigation plans. Not boilerplate ("economy might slow down"). Real risks that would derail the plan.

The quarterly plan, where the rubber hits the road

The quarter is where planning becomes execution:

1. Pre-read. Two weeks before the planning meeting, each team submits: last quarter's OKR grades, proposed next quarter's OKRs, headcount asks, budget asks.
2. Planning meeting. One day, offsite if possible. Morning = company-level priorities. Afternoon = team OKRs.
3. Negotiation phase. Week after planning meeting: teams iterate on OKRs with their managers. Final versions locked by end of week 2.
4. Kickoff. All-hands at start of quarter reviewing commitments.

Timeline example

Q4 (Oct-Dec)
  Oct 15:  Draft annual plan distributed for feedback
  Nov 1:   Board review of draft annual plan
  Nov 15:  Final annual plan published
  Dec 1:   Q1 planning pre-reads due
  Dec 10:  Q1 planning offsite
  Dec 20:  Q1 OKRs finalized
  Jan 5:   Q1 kickoff all-hands

Common failure modes

Annual plan never referenced again

Signed in January, filed away, until the next January. Fix: reference it in every quarterly planning session. The annual plan answers "what are we trying to do?", which the quarterly plan has to serve.

Quarterly planning that doesn't change anything

Same OKRs every quarter, minor wording changes, no real trade-offs made. Fix: every quarter, force each team to say what they will stop doing.

Plans that don't survive contact with reality

The plan was for perfect conditions. Q1 hits headwinds. The plan doesn't update. Fix: mid-quarter review. Not every quarter, but when the business materially changes, re-plan.

Death by planning

Planning takes 6 weeks. Execution takes 6 weeks. You've already lost half the quarter before anyone did work. Fix: cap planning. One day for quarterly planning, one week of refinement, done.

What good looks like

• The annual plan is 8–15 pages, not 80
• Quarterly planning produces real trade-offs, something gets killed, something gets elevated
• The plan is referenced weekly at the WBR, not just at planning time
• Revisions happen when reality demands them, not on a rigid calendar

Related: OKRs without the cult · What to kill · Pre-mortems