It's the middle of November. If you run a company or a piece of one, you're probably somewhere between the second draft of next year's plan and the board deck. It'll get approved before the holidays. It'll be good work. And by April, most of it will describe a year that didn't happen.
I wrote about why back in May. This is the practical follow-up: what to do in the next four weeks, while the plan is still soft enough to change.
What moved while you were planning.
Most planning cycles open around the first week of September. Here's some of what moved between then and this week, according to the Federal Reserve's FRED data:
- The 30-year mortgage rate went from 6.71% to 7.11%.
- The Fed raised its target rate a quarter point, to an upper bound of 4%.
- Diesel went from $5.97 to $6.13 a gallon.
- Expected market volatility, the VIX, rose about 14%.
None of that is a crisis. Nobody's offsite got interrupted for it. That's the problem. A plan doesn't break in one dramatic week. It drifts, line by line, while nobody is assigned to notice. If your September assumptions included a financing rate, a fuel cost or a calm year, the plan you're about to approve is already carrying a few wrong numbers.
I'm not going to tell you to skip the annual plan. Your board wants one, your lender wants one, and building it forces conversations that wouldn't happen otherwise. The plan isn't the problem. Treating it as finished is. Here's what I'd change before it gets locked, and all of it fits before the holidays.
1. Write down what has to be true.
Every plan rests on a handful of assumptions it can't survive without: rates, demand, input costs, hiring, the one customer who's a third of revenue. Most plans bury those assumptions in the spreadsheet, where they look like facts.
Pull out the five that matter most. Next to each one, write the number you assumed and the signal that would tell you it broke. If the plan assumes you can finance a project at 6.5% and the 30-year is sitting at 7.11%, you want to know that in January, not in the Q2 review.
An assumption with no owner and no tripwire is the first thing to go bad, and nobody notices when it does.
2. Write two other stories. It takes an afternoon now.
The plan you're approving is one story about next year. It's probably the reasonable one. Write two more: one where demand comes in 15% soft, and one where your biggest cost line jumps. This isn't a doom exercise. The point is to see which decisions would change in each story and which ones wouldn't.
This used to be a six-week consulting project, which is why most companies did it once a year, if at all. With AI it's an afternoon. Let the model draft the scenarios and pressure-test the numbers. Your job is the part it can't do, which is deciding what you'd actually do differently and putting your name on it.
3. Separate what you have to commit now from what you're committing early.
Annual plans pull every decision into December, including the ones that don't need to be made until June: hiring for the third quarter, the second location, the back half of the marketing budget. Committing to them now feels like discipline. Often it's just early.
Go through the plan and mark each big decision one of two ways. Commit now, or decide by a date, on a signal.
The event business teaches this fast. Venues, room blocks and big production pieces get contracted long before anyone knows what attendance or budgets will look like, so you learn to be careful about what you sign early. Everything you lock early is a bet on a year nobody can see yet. Lock what has to be locked. Leave the rest open, with a date and a signal attached.
4. Book the Steer meeting before the plan is approved.
This is the move that matters most, and it's the one almost nobody makes. Put a standing one-hour meeting on the calendar, once a month, starting in January. Book it now, before approval, because once the plan is approved nobody will want to reopen it.
The agenda is short. Which tripwires fired. Which of the three stories is picking up evidence. Which "decide by" dates are coming due. An hour a month is the difference between a plan and a loop.
April is closer than it looks.
The plan you approve next month will be wrong by April. Everyone's is, mine included. What you control is when you find out: in February, in a meeting you scheduled, or in April, from a variance report that shows up after the decision it should have changed.
— Tim