Achieving great things takes planning. These exercises build consensus around strategic imperatives. Moreover, they identify dependencies and synergies, as well as dictate the future work of numerous colleagues. Furthermore, they create alignment and accountability. And, inevitably, those plans will change. How frequently those plans change, however, is a delicate balance. For this reason, your team should understand the difference between annual product planning and quarterly planning.
How frequently those plans change, however, is a delicate balance. Companies must react to changes in market dynamics, technology, and customer needs. Moreover, they must maintain a consistent overall business strategy and set goals. Overcorrect too often, and your team gets whiplash.
While some of this rapid recalibration is healthy—and might be heavily influenced by the Agile onion impact on planning—executive teams, board members, and investors take little comfort in a zig-zagging product plan. Too much unpredictability can confuse the market—and your sales and marketing teams—while making it hard to create and stick to budgets or plans regarding staffing.
Humans love divvying up the infinite expanse of time into smaller chunks. Every year our blue sphere makes a trip around the sun before we reset the calendar. Annual planning similarly embraces this yearly opportunity for renewal. It also tends to align with our business’s fiscal calendars.
Companies set financial goals, compensation targets, and strategic objectives for the year. For this reason, it’s the perfect time to align those with the product vision by conducting an annual planning session. This big-picture exercise may not put everything on the table. However, it’s still the most likely time for companies to make significant strategic shifts.
Annual planning and the product roadmap
Annual planning determines where we want the product and how we intend to get there, which typically results in a high-level product roadmap. One way to future-proof the roadmap for the coming year is to stay away from specific features and enhancements, instead using themes to designate the major focus areas for the year. That way, there’s more time to work out the details on releases.
While your product roadmap doesn’t need release dates on it, the upcoming year’s calendar should get surfaced during this process. Note any major key events, such as board meetings, major industry events where the company is speaking and exhibiting, and your own company’s user conferences or meetups if applicable. In an ideal world, those dates wouldn’t impact when products ship. However, they do represent key opportunities to make announcements and give demos. They may figure into your quarterly release plan.
Not to be overlooked is the importance of annual planning to establish the goals and objectives for each product. Product metrics will assess that progress and what defines success. Without these key measurables, teams will struggle to evaluate their performance versus expectations. Furthermore, they should reevaluate their tactics and approach.
If plans keep changing all the time, people lose confidence in them and hesitate to put in much effort since, well, what’s the point if tomorrow everything’s different?
That said, product teams also shouldn’t ignore all those new inputs from the market and corporate leadership. Yet, sticking to the same plan for an entire year, no matter what, also seems like a flawed strategy. Quarterly course correction is typically the sweet spot for tweaking and adjusting things based on new data and priorities without throwing the whole operation into constant flux.
Benefits of quarterly planning
One valuable part of quarterly planning is revisiting any assumptions made during the annual process. For example, a prediction of how many customers are using a new feature or checking whether a new component is available. With months worth of new information, we can adjust accordingly to ensure the team is maximizing its IMPACT every quarter.
And while annual planning tends to shy away from specifics, quarterly planning leans into them. The priorities and projects in scope are no longer “theoretical” as colleagues are either already or soon will be working on them. This raises the need to address resource planning, any open questions, and quality control, as well as identifying risks and dependencies.
Finally, quarterly planning also puts the spotlight on executing effective product launches. This includes developing internal project and communication plans, assigning ownership and accountability for key launch-related tasks, and socializing important dates and milestones to relevant stakeholders.
At the end of quarterly planning, the cross-functional teams should come away with goals for the product that quarter. They should roll-up up the most important sprint goals for the period in question. This creates a common objective and sets the bar for success that quarter.
Two different but valuable purposes
To recap, annual planning and quarterly planning serve distinct yet different purposes.
Annual planning’s top objectives are:
- Aligning strategic corporate goals with the roadmap
- Defining the key themes for the year
- Establishing success metrics and KPIs
- Creating a quarterly release plan that incorporates relevant corporate events
Meanwhile, quarterly planning sessions aim to:
- Further, define the specific initiatives for the quarter and set product goals
- Synthesize any new feedback or market intelligence into the prioritization process
- Revisit previous assumptions to assess any need to deviate from the annual plan
- Lay the groundwork for product launch timing and execution
Both annual and quarterly planning require setting a meeting agenda, touching base with key individual stakeholders, and determining the key metrics and success criteria for the coming months/year. By setting aside this time and going through the process, product leaders can ensure previous priorities still hold true and that everyone in the organization remains strategically aligned and focused on the same objectives.