It's almost the end of Q3, which means annual (and quarterly) planning is just around the corner. If you’re like most people, this sentence just filled you with dread.
We've been through dozens of planning cycles after spending 10 years at Eventbrite and seven years at Airbnb, so we've seen firsthand how messy and challenging it can be. Sometimes we were still working on our annual plan — three months into the year. Other times a half-assed plan was rushed through approvals, only to be abandoned entirely after only six months. For most of us, by the time planning ends we’re left with bruised egos, misaligned plans, and a lack of buy-in.
On the flip side, we've also seen the power of a great planning process. In one case, a single team took it upon themselves to consistently stay ahead of planning. They were always ready to rock and roll on day one of the quarter, and as a result delivered significant impact more quickly (and with higher morale) than anyone else.
Planning is hard because it's inherently different from other exercises your organization takes on. Rather than focusing on day-to-day execution, it requires a large number of people to think about a variety of possible futures, align on one single future, and then plot a concrete course to get there. Taking this on for your own personal goals (for example, a New Year’s resolution), feels challenging enough — doing this with dozens or thousands of people can feel nearly impossible.
You can’t expect the organization to “just know” how to pull together a quarterly plan. Working without an agreed-upon framework can often be a recipe for disaster.
Below we’ll share a system that we call the “W Framework.” We hit on this idea after leaving our respective orgs and reminiscing on our experiences coordinating large numbers of people to drive collective impact. We realized that the root cause of nearly all bad planning processes is very simple: a basic lack of understanding of roles — who is responsible for what, when. For example, who should have a say in the plan, and when? What exactly does each stakeholder need to deliver, and to whom? Who sets the timelines? Who holds everyone accountable? And who makes the final call? These questions are too often left unanswered, which leads to chaos and disappointment during the planning process.
We’ve used variations of this framework at our respective orgs and have witnessed how it has made planning more predictable, less stressful, and significantly more effective. Below we’ll walk through each step of the process, highlight best practices, and point out common pitfalls. (And at the end, we'll summarizing everything in full.)
Though using this framework won’t solve every pain in your planning process, we firmly believe it will make planning significantly more effective at almost any org.
A quick note before we begin: This framework is a full top-to-bottom company planning process, most applicable to companies larger than roughly 25 people (once there are multiple teams). It’s intended to help the leaders of the company (i.e. executives, founders) put a planning process in place across the entire org. For individual team leaders, you can advocate for you company to use a framework like this one, and you can also use a scaled down version of this same framework within your own team.
To begin, you’ll first need to identify the two basic groups that will be involved in planning: the Leadership group and the individual Teams.
The Leadership group is generally the executive staff of the company (the CEO and the people who report to her), or the senior leaders of a business unit (VP of Product, VP of Engineering, President of the business unit, etc.).
The Teams are the people executing the actual work, for example the Marketing team, each of the product teams, and the customer service team. As an example of this in action, when Lenny led the supply growth Team, he worked with a Leadership group that included the President of the Homes business unit, the Director of Data Science, the Director of Design, the Director of Engineering, the head of Ops, and a handful of other directors and VPs.
Over several different planning cycles, we’ve seen the extreme ways these roles can play out. We’ve seen Leadership groups that go away to an offsite and come back with a finalized plan without ever involving the Teams. And we’ve seen the opposite: Teams that “take back” planning and do almost all of the work without involving Leadership. What tends to work best in our experience is a balance between these two extremes.
The framework is made up of four steps:
1. Context: Leadership shares a high-level strategy with Teams
2. Plans: Teams respond with proposed plans
3. Integration: Leadership integrates into a single plan, and shares with Teams
4. Buy-in: Teams make final tweaks, confirm buy-in, and get rolling
To successfully implement this process, or any company planning process for that matter, we recommend the following roles and responsibilities:
Leadership (i.e. exec team, business unit leads) is responsible for:
Developing an inspiring high-level vision and strategy
Sharing a concrete goal for the period
Making the final decision on what is prioritized and resourced
Teams (i.e. cross-functional product teams) are responsible for:
Developing execution plans that support the high-level strategy
Highlighting gaps & risks with the final plan
Committing to a goal, with a given level of resources
With that high-level framework out of the way, let’s dive into each step. We’ll share examples from our own experiences, templates, and tactics for avoiding common pitfalls.
“The first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance." — McKinsey
If there’s one thing you take away from this article, it should be that good planning requires top-down guidance. As an example of what can go wrong when this isn’t done, during one of our past planning cycles, the Leadership group (the leaders of our business unit in this case) received a synthesized plan for the year ahead from all of the various Teams. This plan was put together bottom-up, with each team’s more focused plan getting combined into one large plan. The results were eye-opening. There were five times as many priorities as there were teams, and individual team strategies often pulled in opposite directions. When the execs saw this (and had a chance to take a deep breath), they realized the mistake they made.
This issue, at its heart, was that teams lacked context. Teams need to know what investments need to be made now, in order to set the company up for success down the road. They need to know where the biggest risks to the business lie. Leadership has the best understanding of these things, and as planning kicks off, must ensure that this context is communicated.
Teams need context. They need to know what the company absolutely needs to nail over the next year.
How should Leadership share that context with teams? One of the best ways to do this is to put together and share their first draft of the Company Strategy.
Eventually, this doc will evolve to become the full company plan, but right now, Leadership should focus on the strategic elements. A good company strategy at this stage gives a succinct overview of what Leadership believes is the path to winning.
The five essentials ingredients to any company strategy document are:
1. Mission - What are you meant to achieve
2. Vision - What does it look like once you’ve achieved it
3. Goal - How do you concretely know you’ve achieved it
4. Strategy - What is the path to achieving it
5. Strategic pillars - Three to five key bets that the company needs to make
Leadership shouldn’t be too concerned with making the plan too polished at this stage. Planning isn't a time to demonstrate that Leadership has all the answers. It's a time to share what they know and invite others to help fill in the gaps. Leadership needs everyone’s help to complete it. What matters most is that the strategic plan accurately reflects the leaders’ best thinking at this time.
In fact, we encourage Leadership to call out not just what they know but what they don’t know and wish that they did. For example, Leadership may know that they have to expand into the APAC market, even if they don’t have a strong consensus yet on which specific countries to first expand into (or how). If that’s the case, they should state this explicitly, namely, “We know that expansion into Asia is vital for our success and we also believe that Japan is likely where we should focus our efforts. However, we are open to hearing compelling reasons to enter other countries instead of Japan.”
Importantly, the perspective shared by Leadership should not be interpreted as a mandate. It’s important that Leadership provides early input on what they believe is important strategically for the company to get right, but in Step 2 the Teams are encouraged to push back, and to share better approaches.
You want to leverage the full creativity of the team while also making sure you’re all heading in the same direction.
Start with listening: Speak directly with employees on the ground, review past data-dives and research findings, and begin capturing the most interesting ideas.
Get a single individual to take the first pass: Having a strawman proposal for a group to comment and iterate on is far more effective than a group developing a plan together in real-time.
Be transparent: Include context behind your thinking. Call out what you are sure of, and what you think might be true.
Focus your efforts: A good strategy is a focused strategy. What do you absolutely need to get right in order to win? What needs to happen now, and what will be just as successful if you do it later?
Disagree and commit: It’s critical the Leadership is aligned by the time it moves to the next step.
Too prescriptive: Leadership tells the Teams exactly what to do and gives no indication that their feedback is an important step in the planning process. This leads to limited innovation and employee satisfaction.
A lack of focus: Leadership can’t agree among themselves on a strategy or a limited set of priorities. This leads to a ripple effect across all teams, with no holistic strategy and a seemingly limitless list of priorities.
No context: Leadership skips this step completely and instead asks Teams to develop execution plans in a vacuum. While on the surface this can seem like an empowering act by giving the Teams a lot of freedom, in practice it leads to unfocused and misaligned plans.
Overthinking it: Leadership thinks it has to demonstrate it has all of the answers, otherwise the plan doesn’t feel “complete.” Instead, they should focus on sharing what they know, what assumptions they have, and what questions they need help answering.
Thinking a doc will be enough context: Leadership gives all of the Teams a few docs and templates, assuming they’ll have enough context and guidance. However, the more the Teams understand the intangibles, e.g. the “why” behind the vision and strategy, the more likely they are to deliver great results that fall in line with the expectations of Leadership.
The key to effective planning? Debate vigorously, but unite.
Once the strategic plan is in a decent spot, Leadership needs to identify individuals from the Teams who will own each part of the strategic plan, with whom they’ll share all of this context. For example, if you want to expand into APAC you may select someone on the ground in APAC (e.g. GM of APAC), or someone in HQ that can work closely with local ops folks along with the product team HQ (e.g. Head of International Expansion). Selecting these individuals is key because these people will play a key role during the rest of the planning process. Look for people who have context on the work, are reliable, and can think big while delivering results. It can be surprising how long and how many meetings it can take to effectively share out this context, but in the end, the time is well spent.
Hopefully, you find yourself in an org structure that makes it easy to identify owners (and supporting resources) for the different initiatives — where each strategic initiative fits cleanly into an existing team. If not, pick the people best suited to take this on for the time being.
In parallel, consider the idea of reorganizing your teams to align with your strategy. This may sound painful now, but in our experience, having your strategy inform your structure (versus the other way around) is the only way to be successful long-term. As an example, when Airbnb expanded into the Experiences, they could have tasked the existing teams with working together to create this new line of business. Instead the leaders made the right call to create a brand new team that would work relatively independently and report directly into an executive. Coinbase went through the same learnings, recognizing they should shape their org chart to mold to the product, not the other way around.
Once you have your point person selected, meet with them individually, share all of the context you’ve developed above, and then tell them exactly what you need from them. We recommend Leadership ask for the following deliverables for each of the initiatives they are driving.
2. List of key projects
3. Expected timeline and impact
4. Resources needed
5. Risks and dependencies
In addition, this is the time to share the full timeline for the planning process. Make sure everyone understands the timelines early on, that a person is on the hook for every item, and that there’s someone responsible for keeping things on track.
Next, the Teams step up — they take in all of the context provided by Leadership and get to work delivering plans for their initiatives for the year ahead.
Owners of each initiative should assemble a team (often their existing team, sometimes a temporary taskforce) and start thinking about how to best solve the problems they are tasked with. It’s important to remember, particularly at this stage, that everything Leadership has suggested is up for debate. If Teams see major flaws in the proposed plan, or have a better approach, this is the time to highlight these points.
1. Start early: Begin to formulate your perspective before planning officially starts. Even though things will change, we find the most successful teams get way ahead of planning (and accurately anticipate Leadership’s asks). If you get it wrong, in the best case you have a ready-to-go better proposal for Leadership, and in the worst case there are valuable chunks you can still use.
2. Begin with the problem: What distinct problem are you trying to solve? For example, “Grow our business in APAC”, or “Expand into the music vertical.” Make sure everyone is aligned on this problem statement before you get any further. Ideally there’s just one clear problem per team. If your team is a “platform” team that supports other teams, you’ll need to understand other teams’ plans and problems before you can finalize your own plan. Schedule time with each of these teams and align on what you can and can’t do to support them. Let Leadership know upfront that you will need extra time to do your planning, to make time for these alignment sessions.
3. Develop hypotheses: Work with your team to develop a handful of hypotheses for how to solve this problem. For example, “We will grow our business in APAC by working with a local partner” or “We will expand into the music vertical by signing venues X, Y, Z.” Talk to customers, have team discussions, think solo in a quiet place.
4. Ideate: For each of the hypotheses, come up with ideas for testing and addressing these hypotheses. Here are a number of ways to come up with good ideas.
5. Create a strawman plan: Similar to Step One, one person (ideally the team lead) should take a first pass at developing the team plan.
6. Get feedback, iterate: Share this early plan with the team, collect feedback, and iterate until you and the team feel good about it. Throughout this process, cull, prioritize, and focus.
7. Sanity check resources: Come up with your ideal ratios for how you want to invest this year. For example, what percent of resources should be on short, medium, long term bets? What should be the idea ratios for your cross-functional team members? Does your plan match this?
8. Solidify: Get the proposed plan into a state where the story feels tight and polished. Spend extra time at this stage to make sure you feel good about the proposal. The plan you develop should fit well within the context Leadership has provided. The impact you plan to deliver should be ambitious, but achievable. The resources should be clearly defined and well explained.
9. Get buy-in from teams you will depend on: Make sure teams you depend on see and buy into the plan before moving on to the next step, especially if they haven’t been a part of this process. This often includes finance (do they buy the goals you are setting), CX (can they support your changes), marketing/sales, and platform teams. Help make Leadership’s job easier by figuring out dependencies and blockers across teams early.
Working in silos: Teams work independently for too long without checking in with other teams or Leadership. This results in delivering a plan that’s way off the mark and a lot of time lost.
Doing exactly what you’re told: Teams assume the direction they get from Leadership is written in stone. The whole point of this step is for teams to share their unique point of views, based on their experience on the ground. It’s important for Teams to highlight ideas they think are better.
Staying inside your box: Focusing only on your team’s surface area. Instead, explore ideas outside of your direct control. What can other teams do that would positively impact your outcomes? How do you influence them to do that work? Leadership should share pointers here later.
Once your Team plan is solid, package it up and share it with Leadership. In addition to sending a pre-read email, each team should present their plans to the Leadership group in person. This gives the teams a chance to address gaps and concerns before Leadership makes a premature conclusion. Set expectations with your team that things will change after you’ve received feedback — because they most definitely will.
What started in Step One as a good idea, in theory, is now close to being real and concrete. You should have in your hands a set of detailed plans for each of your initiatives — including strategies, projects, impact estimates, and resource requirements. If the plans look way off base, go back and repeat Step One and Two. But if things look good, you can start to finalize the plan.
At this stage, Leadership has three primary jobs:
Prioritize: Decide which projects and teams are being funded
Allocate: Distribute resources and targets
Integrate: Tie everything together into a cohesive company strategy
Much of the work at this stage involves difficult decisions like what to fund, what to cut, and what to double down on. In order to make these hard decisions, Leadership should have a series of group discussions where they review each plan one by one and begin to develop a single plan. As the plan takes shape, everyone in the Leadership group should constantly be asking each other the following questions:
1. Is the most strategically critical work prioritized and resourced?
2. Are the benefits of each bet worth the investment?
3. Are you confident that the team will execute well and hit their goals? If not, what would make you more confident?
4. Is the team being ambitious enough? Or maybe too ambitious?
5. Are there additional benefits or risks that the team missed?
6. How do you feel about the overall mix of the portfolio of investments? Are you making bets on new things or just investing in things we’ve done before? (A good rule of thumb is to invest 80% in safe, short-term bets, 20% in riskier, long-term bets.)
7. Are you doing too much?
Remember, plans always get more complicated once they're put into practice — never less.
New priorities emerge, market forces change, and everything takes longer than you expect. Your plan needs focus — likely more focus than you might feel comfortable with. To design a plan that has a real chance of success, put your resources behind a small number of bets (ideally 3, max 5). In our experience when you leave the planning process wondering if you put too many resources behind a single bet, that’s the bet that ends up succeeding.
It can feel risky to place lots of resources behind fewer things. There’s a certain comfort in having lots bets, anyone of which could yield positive results. In our experience though, what can feel like hedging too often ensures that impactful ideas don’t receive the resources they need to thrive.
In the early days of Eventbrite, for example, Nels remembers his team had an aggressive plan to pause many activities in favor of entering a new category in just two quarters. Although it meant saying no to many different things, they successfully entered that category and acquired what would end up being one of their largest customers for several years.
Pinpoint your highest-impact bets, then go all in. Bold ideas need bold resourcing.
It’s important to challenge yourself and your peers to cut even the good ideas if they aren’t perishable (can be done later), strategic (don’t directly support this plan’s strategy), or differentiating (set you apart from your competition). Instead, put those resources against the top priorities.
Another key consideration during this stage is determining whether the bottom-up plans achieve the stated goals. If so, great! Just make sure these goals are vetted and that you buy into them. If not, that's a problem. Work with finance, data science, and the leaders of each initiative to optimize the expected return from the various initiatives. If the puzzle pieces can’t all come together, you may have to go back to Step Two. Most times, however, with the right level of focus, a solution can be reached with the existing set of initiatives.
Not being aggressive enough: Leadership accepts underwhelming plans from the Teams — easy to hit goals, uninspired projects, or limited innovation. This is the time to set the bar high and make hard decisions. Don’t be afraid to push back or ask for work to be redone. You can even go back to Step One if that’s what it takes to get the plan done right.
Doing too much: Leadership says yes to too many things. Avoid spreading your resources like peanut butter. Do the hard things now. Some people will be upset because things are cut. Remind them how essential it is to get the higher priorities done right.
Burying the lead: Leadership is vague about hard decisions, or they don’t share disappointing news early or clearly enough. This will come out. It’s almost always better to be upfront about it.
Once Leadership has aligned behind an integrated plan, it’s time to move to the final step.
This step is often taken for granted or skipped entirely. Instead, Leadership often gives Teams a quick heads up on the final changes, pretends to listen to the feedback, and then shares the plan widely. This is a mistake. Sharing the integrated plans with Team leads needs to be done thoughtfully and carefully. Many team members have spent dozens (sometimes hundreds) of hours developing their plans, getting internal alignment, and iterating. It’s likely many things have changed or have even been cut.
Rolling out a new plan gives leaders the opportunity to create strong buy-in, trust, and excitement for the work ahead. Don't squander it.
Also, Leadership should use this time to make sure they haven’t missed anything critical while integrating the plans. There’s always a lot going on during planning, and important things can slip through the cracks between teams.
Thus, the three goals of this step are:
1. Share the integrated plan with Team leaders
2. Make final tweaks based on their input
3. Commit and share widely
Bring leaders along: Avoid surprises. As Leadership comes to certain conclusions, share those conclusions and decisions as they happen.
Share reasoning: Explain the why, not just the what. Help people understand where this decision came from.
Share trade-offs: Planning and prioritizing is essentially a game of trade-offs. Share a glimpse into some of these trade-offs, and why they were made.
Listen: Make sure to genuinely listen to concerns and red flags. Though it may sound like complaining, the fact that people care is a good sign. Most times teams on the ground can identify major flaws in a plan much more quickly than Leadership.
Get people excited: If you’re enthusiastic about the plan, help them see why. Give people a reason to get excited.
Skipping this step: Leadership finalizes the plan before the Team leads have a chance to share feedback. This often leads to many flaws in the plan that could have been easily avoided.
Not being empathetic: Many people will be surprised and often feel like their career trajectory will be impacted. Determine ahead of time who will need special attention and explanation, and put in the time to bring them along.
Not listening: Leadership takes all feedback as criticism and doesn’t actually hear what people are saying. Most people want to do good, meaningful work — the least you can do is to hear them out.
Make adjustments based on feedback, close out the open questions, and put the final polish the plan. It’s normal for 5-10% of the plan to change at this stage. If things start to diverge, go back to Steps Two or Three.
With thoughtfulness and shared effort, the plan will come together and be ready to share with the entire company. This should be a moment of celebration. With the help of all of the leaders across the organization, and with all of the information at your disposal, you’ve come up with the best possible plan. Share the vision, the strategy, and the exciting projects ahead. Get your company pumped and raring to go.
A bad planning process is painful — but when it goes well, it can be a thing of beauty. Though planning is hard for many organizations, in our experience it's not as hard as most imagine it to be. The key is to be clear about roles — who is responsible for what, when. Align on this early and stick to it. The W Framework is our best attempt to solve this, and in our experience getting this one piece right is generally the difference between a bad planning process and a great one.
Step 1: Leadership provides context with Teams
Goal: Leadership delivers its perspective on what’s most important
Deliverable: Draft Strategic Plan, which should include:
A short narrative that explains the path to winning (aka, the Strategy)
Three to five strategic “pillars” that describe the key bets that the company needs to make
Step 2: Teams respond with a proposed plan
Goal: The Teams assemble their proposed plans for the year ahead
Deliverables: A plan for each Key Initiative, which should include:
List of key projects and timelines
Expected impact and goals
Risks and Dependencies
Step 3: Leadership shares an integrated plan
Goals: Leadership integrates the many different plans into one company plan
Deliverables: A cohesive company plan, which should include:
Which strategies are being funded
The expectations of those strategies in terms of goals and timelines
The strategies that were cut and why
Step 4: Teams confirm their buy-in
Goals: Ensure the Teams are bought in and ready to roll
Feedback from the Teams
Buy-in from the Teams
A final plan that is shared widely with the company
Image by Getty Images / Sally Elford. Photo of Lenny Rachitsky by Bonnie Rae Mills.