Annual Planning, phase II

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Tomorrow we go into part two of our annual planning sessions. We do this for a couple of reasons. First, we believe that getting set up well with a one-year planning horizon every year really helps to get everyone aligned and tends to get the list of goals down to the most important ones that we can focus on, which helps to ensure that the most important goals are achieved. Second, we encourage our portfolio companies to do the hard work of annual planning and, given that we provide strategic consulting services as well as operational and financial consulting services to our portfolio service, we try to execute our internal management rhythm in a similar way that we hope our portfolio companies will execute theirs.

The first session (described here) was mostly about review of ’09, revisiting how we did against our aspirations (mission, vision, and values) and started to list possible strategic themes for ‘010. Since that time, our Organizational and Operational Principal consolidated the work, sent out a survey to the entire firm to see how everyone perceives our progress and opportunities, and put together the format and materials for our sessions over the next couple of days.

Tomorrow, our Operating Committee gets together and will review our results against our Q4’09 goals (and the results of reflecting on the quarter) and then go through a pretty lengthy spreadsheet of possible goals, goal assignments, and estimated amount of work to complete each goal (the sizing step is new this year and we are hoping that it will allow us to really reduce the number of goals down to the core “few things that matter” by helping to understand the cost/benefit as well as making sure that we are well set up with the resource availability to meet the goals that we end up choosing). The idea is to have an open conversation about the possibilities and priorities and to end the day with the set of goals that the Operating Committee believes are the most important for us to nail in ‘010.

The next day, our entire firm gets together, is presented the Q4 results against goals, is presented the firm and team goals, breaks up into individual teams to assign the annual goals, and then develops the Q1 goals at the team level. Finally, the teams will come back together and present their plans.

This is a LOT of work and we put a lot of time against it up front (as we do quarterly and weekly) to ensure that we have a complete discussion and prioritization once, everyone has the opportunity to participate and share their ideas and views, and so that we can put a lot of lower priority ideas on the back-burner and we can really focus on and nail the most important goals for the year. The time put into this work is paid back in multiples by maximizing our focus and minimizing the time spent on disruptions when we are executing.

Frankly, I am really NOT looking forward to the next couple of days, as they are going to be grueling, but I am looking forward to waking up Monday morning with the plan for the year and quarter all set, everyone aligned, and hitting the ground running for the year!