Reimagining annual planning: From project wish lists to strategic flow

For many organisations, the annual planning season is a familiar ritual - strategy decks get dusted off, budgets are locked in, and project roadmaps are finalised months before the new financial year. But behind this seemingly structured process lies a system that’s often disjointed, misaligned, and increasingly unfit for the pace of today’s world.

If your annual planning sounds like this, it doesn’t need to be this way.

Why annual planning needs to change

In many organisations, annual planning is driven bottom-up. Business units prepare isolated project wish lists, funding is often won by those who shout the loudest, and plans are stitched together without truly aligning people, outcomes and money. The result? Long lead times, misaligned investments and wasted effort that fails to deliver value.

It’s not that organisations don’t care about strategy or impact. It’s that the mechanisms in place aren’t designed to bring strategy to life in a connected, responsive way.

What good looks like

Great annual planning isn’t about more documentation or rigid timelines. It’s about building a living system of work that connects strategy to execution.

Here’s what that looks like:

• Clear strategic direction: A top-down, enterprise-wide set of priorities that align everyone from the boardroom to delivery teams.

• Integrated planning: Finance, Strategy, PMO and Delivery working together - not in silos.

• Investment guardrails: Transparent funding aligned with affordability and strategic value, not politics or noise.

• Data-driven decisions: Using real-time insights over gut feel or legacy assumptions.

• Outcome alignment: Connecting strategic intent to outcomes and capacity, right from the start.

Annual planning done well is not a once-a-year event. It’s part of a broader rhythm - integrated with quarterly and fortnightly cycles that allow organisations to iterate, inspect and adapt throughout the year.

System of work - how strategy to execution flows through a regular drumbeat © 2024 Sooner Safer Happier (Aus) Pty Ltd

The shift required

Getting annual planning right requires a fundamental shift across five dimensions:

1. From misaligned goals to a golden thread of value

2. From siloed, fragmented planning to integrated, collaborative processes

3. From output-heavy thinking to outcome-driven execution

4. From rigid funding models to transparent and flexible investment choices

5. From disconnected data to a shared system view of work

A set of design principles to guide your annual planning re-design

We have outlined these design principles for others to leverage as a pattern to tailor and suit to their context.

1. Top-down, one-enterprise, strategy-led build of your annual plan with a focus on value. 

2. Value to be articulated as outcomes with leading and lagging indicators (OKRs) with both financial and non-financial metrics (e.g., risk, NPS). Value is the cornerstone for how work will be articulated by teams.

3. Integrated annual plan to be executed with Strategy, Finance, BUs and enabled by the PMO to capture outcomes and align all work – change, run and BAU.

4. Annual planning is used to set the enterprise portfolio frame enabling transparency, flexibility and alignment on strategic investment throughout the year.

5. An emergent mindset is embraced through a set of outcome hypotheses to be tested and iterated through delivery, as learning progresses quarter-on-quarter.

6. The annual plan is built from the onset to fit within affordability guardrails. This allows the FY to start with alignment of demand and capacity with clear prioritisation, risk awareness and trade-off calls made.

How to make it stick

It’s not enough to re-design the process. You need to shift mindsets and uplift capability, especially among senior leaders.

Look to leverage a few practical tools - we've found these helpful:

• The Living Memo: A single artefact that connects multi-year strategy to quarterly execution. Reviewed regularly, it keeps everyone focused on what matters most.

• Annual OKRs: Shift from outputs to outcomes by writing your annual priorities as measurable, value-driven hypotheses.

• Strategy-to-Execution Journey Map: Identify and close gaps in your strategy definition before you begin planning.

These tools support a more adaptive, connected, and transparent way of working. But their power comes from how they’re used - in conversations, in rituals and in decision-making forums.

Considerations

Based on experience, here are a few tips/tricks to consider:

• Start with transparency by sharing annual planning outcomes across the organisation. This enables alignment.

• Annual planning will require execution in a synchronised cadence and rhythm. Ensure organisational learnings are gathered, value and outcomes are reviewed and key strategic pivots are identified. 

• Annual planning requires cross-functional inputs from relevant stakeholder groups like Strategy, Finance, PMO/VRO, etc. 

• Allow sufficient time for annual planning and ensure it’s done just-in-time allowing for the right conversations to happen. 

• ELT &/or Board approvals need to occur before the start of the financial year. This allows for the right strategic input to be provided to teams with sufficient time to plan and adjust for Q1 delivery start timeframes.

Annual planning as a system lever

This isn’t just about planning - it’s about transforming how your organisation works. When annual planning is connected to delivery, strategy becomes real. When teams have the clarity, alignment and funding to focus on what matters most, they can deliver better value, sooner, safer, and happier.

So, ask yourself: is your annual planning process still what it was a decade ago? If yes, it might be time for a re-vamp.

Supporting Tools 

We have the following quick starts for you to leverage as practical tools to support:

Living Memo: https://www.soonersaferhappier.com/access-living-memo

• Living Memo, a key output artefact of annual planning, serves as a dynamic, transparent connection between 3-year, 1-year and quarterly outcomes to be delivered. It captures the required data for investment and capacity/capability requests to deliver agreed outcomes. The Living memo is checked and refined quarterly to track the progress of outcomes delivery and to ensure alignment. Living Memo can be integrated into tooling, eliminating the need for a separate artefact. The data requirements will need to be configured in the tool.

Annual OKRs: https://www.soonersaferhappier.com/access-outcome-canvas

• Enabling the shift from output to outcome during annual planning can be a ninja move. We suggest writing your annual goals/priorities as OKRs. Objectives and Key Results (OKRs) are a goal setting framework used by organisations to define measurable goals and to track their progress. To help you to write good annual OKRs, we suggest writing them anchored in value and articulated as business outcome hypotheses.

Strategy to Execution Map: https://www.soonersaferhappier.com/access-strategy-to-execution-journey-map 

• Often when pivoting away from a bottom-up build of projects during annual planning, it exposes gaps in Strategy. You may need to start at Strategy definition and alignment in order to clarify the right focus for the upcoming year. Check out the Strategy to Execution Journey map for a series of steps to check and ensure that you’ve completed prior to defining a set of annual outcomes.