Four Hours of Awesomeness

This is the Unbreakable Business newsletter - created just for COOs and Operations Teams who want to build a company that won’t fall apart.

This is a deep dive issue about how to run a killer Quarterly Planning process.

Today, we’ll cover:

• 🤔 Whether or not you really need to run Quarterly Planning in the first place (hint: maybe you don’t, but you probably do).

• 🙌 Why the quarterly planning cadence is “just right”.

• 🎯 A quick set of steps to make sure you’re ready to implement this in your company (or ready to upgrade it)

Enjoy!!

🤝 Quarterly Planning For The Win

People love to talk shit about meetings.

So when I tell people that I spend four hours on Zoom for a quarterly planning session…and that it’s AWESOME…they look at me like I’m an alien that just stepped off the mother ship 😂 

That’s cool though. Cause I’m right.

Here’s what I believe:

1. A Quarterly Planning process is the minimum effective dose of strategy in most companies (if you don’t agree, this is for you).

2. The way you build the goals is different than the way you build the plans - and it REALLY matters.

3. Measuring your progress vs. goal doesn’t need to be complicated…but it DOES need to happen like clockwork.

The Quarterly Planning sesh is the backbone of my operating cadence. It’s that important.

But I know some of you will still ask…

🤔 Do You Really Need To Do This?

You CAN get away without doing this…if your company is small.

When you’re just a few people (i.e. you can still fit at a kitchen table), you’ll all have so much context that decisions feel obvious.

But I’ve found that communication rhythms break down at 12 people, and again at 40-ish people.

They break at 12 because your nascent lil biz is starting to actually have departments. And departments have leaders (formal or otherwise), who likely have goals, incentives, and aspirations. And keeping them all aligned is the first hurdle you’ve gotta clear.

But at 40, it gets even more fun - because now you’ve likely got a layer of managers who are leading other managers - and the game just got way more complex.

The good news: a solid Quarterly Planning cadence is one of the best tools that you can use to solve both of these situations.

If you’re hitting the chaos at 12, doing this with your main group of leaders will help drive the alignment you’re looking for.

And if you’re running a team of 40 or more (or headed there fast), running this meeting per department will be just the ticket.

This is what I do now, and it works like a charm:

🙌 Why The Quarterly Cadence Is “Just Right”

It’s simple, so I’m not gonna over-explain it.

Yes, I do annual planning - we get the leadership team together (ideally in person), I build an annual plan and a base case forecast down to the P&L level, and we use it to set our goals for the year.

But SO MANY teams lose their mojo by the end of January. They make the annual plan, and then immediately go back to having 100% focus on weekly metrics - and their beautifully-crafted annual plan sits in a folder on Google Drive gathering digital dust.

FAIL.

By breaking that annual plan down into quarters, it’s a long enough timeline to get real results, but a short enough one where you won’t endlessly procrastinate.

Think of a quarter as having “12 shots on goal”:

You tee up your plan at the end of the prior quarter, so when the upcoming one starts, you’re ready.

• Annual + Q1 Planning: December

• Q2 Planning: March

• Q3 Planning: June

• Q4 Planning: September

I usually start Quarterly Planning right after the books are closed for the second month of the quarter (which ideally is on Working Day 5, but that’s a topic for another day).

If you schedule it this way, everyone in your company will roughly have:

• 1 week or so to get all your prep done for the projects you’re running.

• 6-8 weeks of working in earnest to move the projects forward.

• 1-2 weeks of buttoning things up (or maybe taking a little time out of office, etc).

• 1 week to plan the following quarter (as part of this cadence).

12 weeks is truly a magical length of time. Because it’s long enough to get ACTUAL work done, but short enough where the whole world / market / etc isn’t likely to change (2020 notwithstanding, lol).

🎯 Goals vs. Plans

Goals come top-down, plans come bottom-up.

This is incredibly important - because like the old saying goes, “If you don’t plan the fight, you’ll fight the plan.”

The GOALS are high level, and should be set by the executive team. It’s your job as the top level leaders to identify the mountain the team is climbing…but NOT to tell them what type of snacks to put in their backpack 😂 

I usually set revenue and profit targets, along with any high-level strategic initiatives (new product launches, writing a book, etc) - and that’s about it.

From there, I bring those goals to the teams and let them build the plans that get us there.

Your team leaders (Directors / VPs) will come to you with the plans that they think are needed, and the resources they’re asking for in order to get there.

Then, you negotiate - and the output of that negotiation is a plan that everyone has contributed to. If you do it right, you’ll have alignment, buy-in, and a shared mission between all levels of leadership.

Now, all that’s left is to actually run the meeting - which I’ll cover in next week’s issue!

📽️ Go To The Movies

Grab my latest YouTube video where I run through some more of the specifics on the key principles of doing Quarterly Planning - it’s a great companion video to this issue.

Also, make sure you subscribe to my channel so you don’t miss awesome videos like this one.

🎯 Default To Action

Here’s my commitment to you: Every issue I publish will have this section in it, at the end, with a set of 1-3 clear steps that you should take to take ACTION. This ain’t “shelf help”…I’m out here trying to make positive change, full stop.

Here’s what you should do this week:

1️⃣ Review Your Financial Plan

In an ideal world, you should have both an annual financial plan and a quarterly forecast. I’ll do a deep dive into how I approach this in a future issue, but don’t stress too much if you don’t have this 100% dialed in.

Just take out whatever you’ve got, and make sure that if you HAD to build a quarterly plan today, you can set some clear targets on revenue and profit.

Those two numbers are the minimum effective dose, because they allow you to back into all of your other decisions. A revenue target lets you calculate unit sales, leads, performance standards for sales and marketing, performance standards for retention, etc. A profit target lets you figure out how much you’re willing to spend to hit the numbers that support the revenue target.

✅ Set your revenue and profit targets for each month in the upcoming quarter.

2️⃣ Choose Your Depth

Based on the size of your team, you’ll either need to have ONE quarterly planning session, or “stacked” quarterly planning sessions (executive team first, then departments afterwards).

Typically, if your total headcount is 12 or under, you can do one session - but if your leaders are managing teams of their own (with multiple FTEs on them), you may need to break it out into the stacked approach.

✅ Pick your approach for the upcoming quarter and write down how many meetings it will result in (typically between 1 and 6 depending on org size).

3️⃣ Audit Your Calendar

Once you complete #2, you’ll know who needs to be at the Quarterly Planning session. If you’re only running the one (small team), or for an executive team sesh, I budget 6 hours.

Feel free to have your mind blown, because if you run these right, not only do they FLY by, but they’re an incredibly good use of time.

Departmental sessions usually run 3-4 hours depending on headcount.

✅ Make sure that you’ve got the space in your calendar to run your next QP meeting.

Next week, we’ll be rocking through the nuts and bolts of actually running the meeting - and I’ll be giving you a downloadable agenda that you can use to make sure it’s AWESOME.

Always in your corner,

MV

📣 Overheard On The Interwebs

Flywheels - Nathan Barry

Nathan is one of my favorite entrepreneurs for a number of reasons, but one of them is the clarity of thinking that he has.

This tweet from him is one of my favorites lately - I love thinking in flywheels and the way that he summed this up was brilliant and concise.