👷🏽 Steal these 3 annual planning frameworks to scale your business

Read time: 3 minutes

Hey friends - this is Tushar from Savvy Operator, home of COOs and BizOps leaders looking to level up their businesses and careers.

This newsletter is the espresso shot for rockstar operators - quick, potent, and no-fluff.

Except it’s served by your friendly neighborhood Indian barista so you’ll hopefully walk out with a smile thinking “Wow I actually really enjoyed that!”.

Let’s jump into it 🕺 

One of the newsletter subscribers (shout out Andres) reached out to ask if I had any thoughts about how to run an effective annual planning process.

Well, I do! When I first joined Noom 3 years ago, I was tasked with figuring out how we could overhaul and implement a new planning rhythm and process for our company.

I extensively researched the various annual planning processes of high-growth tech companies so you don’t have to and I’m packaging up my learnings for you today.

Why care about annual planning?

As current and future COOs, it’s our job to design and implement the planning rhythm for our teams and companies.

Depending on where you work, you either just wrapped up your company’s annual planning process or find yourselves at the tail end of it now. It’s a great time to reflect on what did and did not work while you have fresh scars and get inspiration from some proven planning frameworks.

Here’s the truth from someone who has been through a bunch of planning cycles - most annual planning processes absolutely suck. Hours upon hours spent in rooms/Zooms crafting plans for optics sake that, let’s be honest, often end up as nothing more than virtual shelf decor by Q2.

I want you to steal some of the planning frameworks from today’s newsletter to ensure that you

✅ think strategically about where your business/team should be headed

✅ align with your team so everyone is rowing together towards the same goals

✅ impress your CEO/manager as a strategic operator and leader who is able to step out of the weeds

Let’s get it.

Three of the greatest hits

Every company has their own flavor of annual planning and picking the right one depends a lot on your company stage, culture, and product.

Here are 3 of the most helpful planning frameworks I’ve come across in my research, in order of what I feel is most appropriate for larger vs smaller orgs

1. Amazon’s OP1 and OP2 framework (large/public orgs)

AKA Operating Plan 1 (OP1) and Operating Plan 2 (OP2)

OP-1, which happens around June, is a mandatory six-page document produced by every Amazon team addressing the following questions:

• What outcomes did you achieve last year, in comparison to what you planned?

• What outcomes can you achieve if your level of investment remains the same?

• What resources do you need to grow your business by 10x?

Once the finance team plans the budget for the next year and informs the teams, the teams are then asked to modify their OP1 into an OP2 based on the budget constraints. They are also asked to draft another six-page document from every team which asks:

• What did you accomplish since OP-1 compared to what you planned?

• Reasonably, how will you finish out this year and first quarter of next year?

The book Working Backwards: Insights, Stories, and Secrets from Inside Amazon dives much deeper Into this if you’re interested in learning more.

2. The W Framework (medium-sized orgs)

This framework has been used at companies like Airbnb and Eventbrite. We ended up implementing a flavor of this and the next Coda framework at Noom after I completed my research.

The full article is worth a read but here’s a quick description of each step in the W framework if you’re short on time -

1. Context: It’s like setting the scene for a movie. Leadership shares a high-level strategy with teams.

2. Plans: This is like writing the scenes for the movie. Teams respond with proposed plans.

3. Integration: It's like editing the movie so all the scenes fit together just right. Leadership integrates into a single plan, and shares with teams.

4. Buy-in: The movie is ready, and everyone’s excited to play their part. Teams make final tweaks, confirm buy-in, and get rolling.

Love it.

3. Coda’s 6-month and 6-week planning framework (small and medium-sized orgs)

For companies that prefer a more dynamic planning process, 6-month planning cycles offer structure and flexibility at the same time.

Coda’s system focuses on two independent processes:

• Strategic planning which happens every 6 months (26 weeks) called H1 and H2 planning. It takes 2-3 very focused weeks and there are two key outputs:

  • a list of ‘Big Rocks’ and

  • project / resource allocations

• Sprint planning which happens every 6 weeks. This is a set of true commitments that every team makes on what they would get done in the next 6 weeks and reflects dependencies between teams.

The full article has some helpful templates to track these outputs as well if you’re curious.

Takeaway

There’s no perfect annual planning process, just the right planning process for your org at a given moment in time.

I hope by learning about a few of these different frameworks above, you will find inspiration to implement one for your companies or propose it to your CEO/Manager for this upcoming year for some extra ‘strategic operator’ brownie points.

Happy planning, fellow savvy operator! See you next week 👋 

Tushar

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