Situation: A company goes through an annual strategic planning process followed by an annual business planning process. At mid-year they do a review and correction. The challenge is that if the company is behind plan, the management team does not take ownership of plan revisions – it becomes “the CEO’s Plan.” How do you gain commitment to revisions in the annual plan?

Advice from the CEOs:

• Throw out your current process and start over.
  • The challenge is to gain more buy-in and accountability. This only comes if the targets come from those responsible for delivering them – both for the original plan and if any revisions need to be made.
  • Look at who you involve within the organization – can you drive involvement deeper to generate additional buy-in across the organization?
  • Hire an outside facilitator to guide you through the process instead of chairing the meeting yourself. This prevents the resulting plan from becoming “your” plan. It also changes the culture of the meeting as well as the buy-in.
• If you use a bottom-up / top-down process, moderate the plan results with an eye to two realities:
  • Bottom-up input from the sales team is rarely more pessimistic than the CEO’s input. If it is ask what is happening.
  • Make sure that your top-down numbers are empirical and based on the best market research that you can obtain.
• If your plans have consistently fallen short over recent years:
  • You may be baking the targets too high.
  • Consider building the revenue plan optimistically, but build the expense plan conservatively. This helps control expenses and attain profitability targets.
  • So that the two plans are not misaligned, review them more frequently – perhaps quarterly on a formal basis with monthly reviews – so that if your revenue plan is meeting targets you can adjust spending to support production and delivery.
  • It is common to have one set of numbers for sales and a different, more conservative, number for expenses. As long as you conduct frequent review and adjustment of the expense number to sales performance, this works. Many companies also use different targets for operations than what they present to the Board – with the more conservative numbers for the Board.

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