5 common mistakes in annual plans - and how to avoid them

It's that time of year again: preparing annual plans and budgets. It is a crucial step for organisations to set their course for the coming year. An annual routine, yet goes...
What mistakes do we often encounter, and how can you avoid them? By paying attention not only to content, but also to a collaborative process with simple methods such as OGSM (Objectives, Goals, Strategies, and Measures), you can prevent your organisation from wasting time and resources unnecessarily and ensure a better chance of success in 2025.

1. The MT makes plans without involving the rest of the organisation

A first common mistake is that the annual plan is prepared by board or management without active involvement of others from the organisation. This creates a disconnect between the plan and daily practice. Employees often do not feel connected to the objectives, which complicates their implementation.

What to watch out for:
To ensure that everyone feels involved, it is important to gather input from employees at different levels within the organisation. This not only increases engagement, but also ensures that the annual plan better reflects the reality of the shop floor. It is essential to set up the goal-setting process in a transparent way and communicate how each team contributes to the bigger picture.

2. Goals are set without considering external stakeholders

A common mistake is that companies formulate goals without adequate coordination with external stakeholders, such as customers, suppliers or chain partners. In transitions such as the agriculture and food transition, collaboration across the chain, from farmer to plate, is crucial. Ignoring these external ecosystems, networks and public-private partnerships (PPPs) can result in the goals set working internally but not matching the expectations or needs of the outside world.

What to watch out for:
Make sure your annual plan is aligned with both internal and external stakeholders. Gather input through customer satisfaction surveys, supplier feedback forms, or through regular meetings with supply chain partners. This helps to ensure that your goals are not only achievable internally, but also valuable and relevant to the outside world. Regular feedback sessions and external reviews can prevent you from facing unexpected resistance or missed opportunities afterwards.

3. Too much focus on small improvements without a long-term vision

Many organisations focus their annual plans only on small, incremental steps, without adequately considering their long-term goals. As a result, organisations can get bogged down in day-to-day operational improvements, without really thinking about where they want to be in a few years' time.

What to watch out for:
A successful annual plan not only focuses on short-term successes, but also lays the foundation for long-term growth. It can be valuable to consider environmental and social impact in addition to financial targets. Think about how your organisation can contribute to sustainability or social responsibility, such as energy transition or inclusive employment. A clear vision for the next 2-3 years in both economic and social terms can help you not only make progress in the short term, but also give direction to larger, sustainable ambitions.

4. The annual plan is drawn up but not followed up regularly thereafter

One of the biggest pitfalls is creating an annual plan that is then not reviewed regularly. This makes it difficult to respond to changes in the market or to check whether the organisation is on track to achieve the set goals. In addition, there is often too much focus on short-term results or teams get bogged down in the delusion of the day, pushing strategic priorities into the background .

What to watch out for:
Ensure that the annual plan is regularly monitored and evaluated, e.g. during quarterly meetings. This provides an opportunity to measure progress and adapt the strategy to current developments. An agile approach ensures that the organisation remains flexible and focused on the right priorities. This requires a clear governance process, in which the strategy and goals are continuously evaluated and adjusted where necessary.

5. Employees do not know what the goals in the annual plan are

Even if an annual plan is well drafted, things can go wrong if the objectives are not properly communicated to the rest of the organisation. If employees do not understand how their work contributes to the wider organisational goals, they will focus on their daily tasks without keeping the bigger picture in sight.

What to watch out for:
Clear communication is crucial. Make sure the objectives of the annual plan are clear to everyone in the organisation and translate them into concrete actions at all levels. In addition, schedule periodic moments, such as quarterly meetings, to discuss progress and have an open dialogue about the goals set. By not only reiterating the goals each quarter, but also providing space for feedback and dialogue, you increase employee commitment. When they understand what they are working on, why it is important, and are given the opportunity to actively contribute to the direction, they feel more responsible for achieving organisational goals.

Our approach
At Elemental, we know what companies are up against in their quest for effective annual plans. We support organisations in creating and implementing plans that not only focus on short-term results, but also contribute to sustainable, long-term value creation. Together, we ensure that your strategy is clearly defined and practically implementable. We help companies turn their vision into a concrete course, with a clear direction and measurable long-term impact. We achieve this by developing a structured process, closely involving the right stakeholders, both internal and external.
In addition, we help develop a structure that ensures goals are continuously evaluated and adjusted where necessary. This keeps your organisation flexible and able to respond effectively to changes in the market.

Would you like to spar about how to draw up annual plans that really work and are in line with your strategic goals? Or are you considering working with OGSM, but are not yet sure how to apply it effectively? We are happy to invite you for a chat or a cup of coffee to explore together how we can get your organisation ready for 2025 and beyond. Get in touch with us!

Justin van der Starre
justin.vanderstarre@elementalstrategy.com