Annual planning: A Multi-Directional Approach

In the context of a post-Series A stage company, annual planning is hard and time-consuming. Even more so at the early stage when volatility is high and often the data needed to make forecasts is not robust enough or non-existent.

I also often see that first-time founders and exec teams get stuck on one of two ends of the spectrum – the plan is either top-down and ambitious but lacking in concrete levers/actions or the plan is bottoms up and doesn’t push the company to stretch enough into the unknowns (and stretching into the unknown is what rocket-ship growth is all about).

What I recommend to the companies we work with is to do both. Start with a top-down plan that has high-level goals in line with the type of growth needed to build a unicorn and then have the team put together a bottoms-up plan with conservative assumptions that I roughly call “do more of the same.”

In almost every case there will be a gap between the bottoms up and top-down plan and how you bridge the two is what makes companies special.

Take the gap and sit down with the senior leaders of each team and ask them how they think they can close the gap. What would they prioritize? What level of certainty of uncertainty do they have about the impact? What trade-offs need to be made?

Rolls those new initiatives up across teams, discount the impact appropriately and get true commitment to goals.

You likely won’t always land at the original top-down goal (nor should you always) but what you will have is a path to stretching the performance of the organization and true commitment and accountability from each of your leaders.