Building an annual plan is critical for an organisation to establish a directional goal and move in an integrated manner towards that goal as it becomes the guiding light for tactical decision making. And, for many, it’s that time of year…and the time of year during which people make familiar missteps.
One of the biggest mistakes any company could make would be to overlook the value that an annual plan could bring, or regard it as a mechanical, tick-box process. Regardless of the size of your procurement function, an annual plan is a very important tool for your success, and while the planning process doesn’t have to be complicated, it should be deliberate and considered.
Procurement Leaders’ eBook Annual Planning To Support Your Strategic Framework provides you with a framework to ensure your annual plan is achieving your strategic objectives along with a checklist and some quick wins to guide you in the right direction.
Once you have a great plan, you need to execute it and make sure it resonates with your team and sticks. Simple, right? But getting those first steps right is crucial.
Here are 6 steps on how to effectively execute your annual plan:
1. Define: What’s in a plan?
Annual plans come in many forms. An annual plan is to provide enough direction so that each function can develop objectives and strategies that will align all go-to-market resources to support the procurement goals. You may have objectives that fall into a few buckets: Dive deeper into each of these areas and work out what commitments you want to make to each area; under each area create a specific goal with related activities and measurements.
2. Collaborative plan building
The best plans are a collaborative effort that includes everyone in your organisation. It is important that everyone feels like they’re part of the annual planning process. This accomplishes two powerful outcomes. First, everyone will feel like they’ve been heard. When employees have input into the plan, they’re more committed to achieving the goals —without involvement, you risk people feeling like it’s been forced on them, and this can be demotivating. Second, people in your company probably have brilliant ideas: the planning process can be a chance for them to bring their ideas to the table.
3. Keeping it simple
Your annual plan doesn’t have to be complicated. In fact, some of the best companies have annual plans that fit onto just one page. Having your annual plan condensed and sharpened makes it easier for people to stay focused on the few things that matter. It also makes it easy for everyone to see how their efforts fit into the plan and finally, it’s easier to share, discuss and distribute. The annual plan becomes a tool for decision making that everyone can use.
4. Communicating the plan
Your annual plan doesn’t mean anything if it’s not shared. Engage teams with in your organisation through group meetings and Q&A sessions. This is where a one-page annual plan format (or equivalent) becomes really valuable. It’s an opportunity to inform, educate and invigorate everyone to accomplish the plans they’ve created.
5. Sticking to the plan
You could have a great plan, but if you don’t follow through and execute it, it will fail. Schedule periodic check-ins to track your progress against the plan and your success measures. It’s very easy to get caught up in the day-to-day work required in any business.
An annual plan gives your team some direction as to where they are going and how they are going to get there, aligning your vision with the wider business and creating some excitement for the year ahead. If significant changes are clearly needed within weeks of creating an annual plan, the original plan was most likely flawed.
6. Being flexible
Procurement conditions constantly changing you will need to be adjustable with your plan too. However, as you make changes to the plan, be sure to keep everyone in the organisation informed about the new priorities.
Annual planning, like POs, can be annoying, process-fixated tedium. But both serve their purpose. And more than that, annual planning acts as a translation of vision and purpose. Basic though the principles might be, keeping them in sight as the year unfolds is often the measure of a sophisticated function.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.