8 Steps to a Beautiful Annual Operating Plan

September 23, 2021




During a 30-minute webinar featuring Brett Herkt, CEO and co-founder of BoardPro, Martin Oxley, BoardPro advisor and Steven Bowman, serial author and managing director of Conscious Governance, the group went through the necessary steps that need to be completed in order to create a beautiful annual operating plan.

The framework was primarily directed for CEOs of commercial and not-for-profit organisations with revenues between $500k and $200 million and a functioning management/leadership team who don’t necessarily have a strong track record of strategic/operational planning.

BoardPro works with thousands of companies around the world to help them with various aspects of corporate governance and structure. The August-held webinar was attended by over 300 people all eager to absorb the insights of the corporate veterans who have served on the leadership teams of multinational corporations both in Australia and abroad.

As the group puts it, “You wouldn’t build a house without architectural drawings.” However, while this being the case, many CEOs and directors run their businesses with only a faint drawing of what they’re building and working toward.

“Fortunately, annual planning is a craft that can be mastered,” explained Herkt who referenced his previous days as a founder of several high-growth companies during which he experienced the difficulty of weak annual planning.

Going through the various stages of putting together an annual operating plan, the group outlined the various steps and phases involved to help companies get started in the right way.

  • Preparation
    According to the group, it is best to start preparing and setting up for annual operating plan is three to four months in advance
  • Set scope and constraints
    This phase requires the management team to confirm the scope with the board and the leadership team, which is a two-phased process.
    i. Secure a strategic mandate from the board
    ii. Communicate it to the leadership team
  • Review and critique
    This phase involves a period of honest self-reflection, which requires the management team to ask:
    i. What’s succeeding?
    ii. What’s failing?
    iii. What have we missed?
    iv. Why?
  • Strategy day
    This phase involves reviewing and confirming the strategy created
  • Budget first cut|
    This phase is for the CEO and head of finance to provide a simple, top-down financial forecast and really provide that as a guide to the team.
  • Set team goals and strategies
    Once the company’s strategic direction has been confirmed and there’s an indicative budget, this phase involves the CEO sending the annual operating plan to the leadership team to review. This is because the people executing the plan should be involved in creating the plan. It is also important for company alignment.
  • Presenting the draft plan to the board
  • Finalising the plan and budget within a week:
    This team involves getting the plan and budget approved by the functional leaders and board.
    Once it has been approved by all necessary parties, upload it to a central repository so it’s available to your team throughout the year.

Learn everything you need to know about putting together a beautiful operating plan for your leadership team, your company and your board by watching the full webinar here!

Webinar Transcript

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