Why do we have Planning Season in RevOps?
Most weeks on the newsletter I share an actionable plan for a topic.
But this week I’m posing a question - something that has been bugging me as I read about so many revenue leaders and RevOps teams being buried in their planning season in the run up to the end of their financial years.
As a seller of 20 years the teams I was part of were constantly on the receiving end of language including:
“Don’t leave it to the last minute.”
“Close early to remove the stress.”
“Build some urgency”
“Let’s come off a great Q4 with a big Q1.”
“You need to smooth your bookings through the month, quarter, year.”
As a parent of four children, I’ve learned that my kids spend more time looking at what I do than what I say.
So what do most revenue leaders do?
We set an annual plan in the last eight weeks of the year.
At best it is locked down a few weeks before the start of the new year,
In reality it is still being finalised in the first quarter,
And presented to sellers at a Kick Off meeting during the first or second month.
“Here is our annual plan” you declare (with 10 months left)
“Hold tight, your accounts will be locked down in the next couple of weeks”
Sellers scramble around to build their own plans that their managers barely look at.
Q1 is a miss.
“Don’t worry, we have three quarters to make it up.”
“If we just beat our Q2, Q3 and Q4 numbers by 20% we can make up the miss”
My kids look at what I do, not what I say.
Why do we do annual planning?
The annual revenue planning cycle falls out of the bottom of the annual financial planning process.
At the executive level the CEO and CFO are determining the annual plan, and it is then the job of the revenue team to deliver on that annual plan.
So it makes sense that the revenue leaders create their own annual plan - as long as they hit the number by day 365 they are still in a job.
But by not breaking this cycle at this point, they pass the annual nature of the business’ cadence down to sellers.
Annual planning misses 12 opportunities to readjust
At SaaStr Europa earlier this year Sterling Snow, ex CRO at Divvy explained why they had their sellers on monthly quotas instead of quarterly or annual.
“With monthly quotas you have 12 opportunities to win, 12 opportunities to adjust”
It creates that urgency in the team, whereas an annual plan naturally gives everyone at least half a year where the pressure is off. Where there are no accelerators. Where there are no opportunities to adjust.
I imagine a car driving at night.
With an annual plan you will drive to the furthest point that you can see right now, and when you get there you will reassess the situation and create a new plan.
But that isn’t how you drive a car.
With every metre you drive, a new metre comes into your furthest field of view, and you readjust accordingly.
You don’t pause every 250 yards to come up with a new plan.
Why don’t we treat revenue development like that?
When you look back across your company over ten years, you’ll see a long road of (hopefully) steady revenue growth.
A long road which came into view day by day, month by month - not year by year.
How to plan on a rolling four quarter basis
Annual plans won’t disappear, because that is what will be handed down from the financial plan.
But can we do a better job of translating that for our Go To Market teams?
I encourage clients to think about a rolling four quarter plan - where every quarter, as well as defining our priority GTM objectives for this quarter, we are also thinking about this quarter next year.
Will we be opening up in new geographies?
Will we be improving our compensation scheme?
Will we be launching a new product?
Will we be adding in new sales teams?
Will we be introducing new technology?
Will we be changing seller territories?
By looking out to the furthest reaches of our car lights, what can we see, and do we need to adjust now based on new information?
If we wait until that quarter reaches us in 12 months - then we are scrabbling around to readjust.
My kids look at what I do, not what I say.
I look at our colleagues in product development. Their agile methodology allows them to constantly add new items to the backlog, prioritising on a regular basis what gets worked on that month or quarter.
They’ll have an annual plan, but it is the much shorter time frames that allows them to adjust course and deliver what is needed.
How do you approach annual planning season?
As I said at the start, today’s post is not advice, just a question.
Have we fallen into a planning season trap - because that’s what everyone else does?
How do you handle it in your organisation?
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