Your Annual Plan Is Already Wrong

Your year-at-a-time plans and goals are already wrong, but if you know this about them, they are still worth making, provided you don’t take them too seriously.

Another January is upon us, bringing us into the season of annual planning exercises. Annual plans are the organizational equivalent of New Year’s resolutions – we feel obligated to make them, even though we are unlikely to keep them.

In most organizations, there is little practical difference between the end of December and the beginning of January, and so there are few objective grounds for over-weighting this part of the year as a time for course corrections and new ventures. Yet, the unblemished calendar invites us, like fresh snow, to create something remarkable upon its canvas. We aspire to high art, and this seemingly demands a plan that will keep us from wandering around in circles, doubling back over our tracks, and generally making a mess of the yard.

My friends, the mess is unavoidable. Success is rarely achieved in a straight line.

We should no longer be surprised by the annual objectives which seemed so central in January and were scarcely relevant by June. We can hardly doubt that our signature accomplishments in a given year were often unimagined at the start of that year. If we are attentive and realistic, we recognize that these discrepancies between planned and actual are as much the norm as the exception.

Humans are poor planners and feeble fortune tellers, and pretending otherwise amounts to damaging obstinacy. Let us instead embrace our obvious limitations and our well-documented fallibility, so that we can prepare and act accordingly. We are equipped with lanterns, not flashlights. We can see what is close at hand, but most of the path before us will remain dark until we are right on top of it.

The rise of agile software development methods is an outgrowth of this recognition. Agilists accept that they cannot see the future very well. They don’t try to look very far ahead because people simply aren’t very good at doing so and because changing circumstances often invalidate plans made on large time scales. Instead, agilists work in small iterations, experimenting and successively refining until they have made their way to their goal. With each iteration of their output, they evaluate what they have done so far and what the next best thing to do would be. They keep long range goals in mind as a guiding star, but they navigate in the moment by more immediate and accessible beacons. If they make a mistake, they won’t go very far before giving themselves a chance to correct it and get back on course.

The corollary lessons for annual planning exercises, including personal goals, are clear. If your planning cycle is annual, then your plan is already wrong, not because of its established content but because it doesn’t contain realistic mechanisms for error correction and adjusting to change. The winds of the world are abrupt and fickle, and we can’t keep sailing in the right direction by changing our tack on a merely annual basis.

Instead of planning annually, organizations should:

  • plan for multiple time horizons, such as “within three months,” “within six months,” “within a year,” and so on
  • make near-term plans the most detailed (because these cover the ground we can actually see well)
  • make long-term plans more directional and less defined
  • revisit plans regularly, multiple times within a year, for review and adjustment
  • accept that plans sometimes turn out to be wrong, and that there is no shame in adjusting to new information or realizations

The annual plan is a fossil, left over from the days in which things moved slower and we knew less about ourselves. It’s time for us to evolve into planning cycles that are more natural, realistic, and credible.

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