Thank you!

This article is by Lenny Rachitsky, a former product lead and head of consumer supply growth at Airbnb, and Nels Gilbreth, former Head of Global Revenue Strategy at Eventbrite.

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.

UNPACKING THE W FRAMEWORK

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:

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:

Teams (i.e. cross-functional product teams) are responsible for:

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.

STEP 1: LEADERSHIP PROVIDES CONTEXT

“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.

Here's our Company Strategy template to get you started.

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:

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.

Tips for developing the strategic plan:

Common pitfalls at this stage:

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.

Here’s our template for developing Key Initiatives:

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.

Here’s our planning timeline template.

STEP 2: TEAMS RESPOND WITH A PROPOSED PLAN

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.

Here’s the process that we generally use to figure out a Team plan:

Common pitfalls at this stage:

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.

Nels Gilbreth, former Head of Global Revenue Strategy at Eventbrite.

STEP 3: LEADERSHIP SHARES AN INTEGRATED PLAN

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:

You can continue to use this template to collect the final integrated plan.

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:

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.

Common pitfalls at this stage:

Once Leadership has aligned behind an integrated plan, it’s time to move to the final step.

Lenny Rachitsky, former product lead and head of consumer supply growth at Airbnb

STEP 4: TEAMS CONFIRM THEIR BUY-IN

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:

Tips for how to share the integrated plan with the least amount of drama:

Common pitfalls at this stage:

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.

BRINGING IT ALL TOGETHER

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.

In summary, here is the full W Framework:

Step 1: Leadership provides context with Teams
Goal: Leadership delivers its perspective on what’s most important
Deliverable: Draft Strategic Plan, which should include:

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:

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:

Step 4: Teams confirm their buy-in
Goals: Ensure the Teams are bought in and ready to roll
Deliverables:

Thank you Vanessa Schneider, Isabel Tewes, and Laura Chambers for reviewing early drafts of this post.

Image by Getty Images / Sally Elford. Photo of Lenny Rachitsky by Bonnie Rae Mills.

First Round ReviewThe best advice in tech
Subscribe for Exclusive Access