Your Annual Plan Isn’t Working. Try a Six-Quarter Walk Instead.

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We have about six weeks left in the year. Right now, everyone’s got their heads down putting together their 2023 budget.?

You too?

That’s great, except a budget isn’t the same as a strategic plan. And there are a lot of problems with this kind of operational planning.

For starters, it’s primarily focused on what you’re going to spend over the next 12 months –– not actions. And it’s incredibly inflexible. You’re basically stuck with it until your next annual planning cycle.

So you better brush up on your crystal ball reading skills! Given how volatile the environment is right now, figuring out the plan –– not to mention all the contingencies and changes – isn’t an easy task.

But you do need a plan, especially in a large organization. So what should you do instead?

Introducing the six-quarter walk

The six-quarter walk is a different approach to strategic planning that extends beyond 12 months to 18. It includes six quarters ––?not just four.

But this isn’t your long-term strategy that outlines where you want to be three, five, or 10 years from now; it’s a shorter-term horizon to execute against.?

It’s also detailed. You might not have every single execution point fine tuned, but the high-level quarterly goal should be just as detailed in Q6 as it is in Q1. It’s a challenge, sure, but 18 months isn’t so far away that you can’t imagine what things will look like.

And here’s the fun part: At the end of the first quarter, you go through the planning process again and extend your plan another quarter so you always have a rolling 18-month plan.

If you’re thinking, “This sounds like a lot of work!” let me assure you it doesn’t have to be. You already have the detailed plans. You know the interdependencies. You know where you ended up at the end of Q1. All you’re doing is adjusting for a new reality or a new baseline. You know what worked and what didn’t, so you can update your entire plan to reflect that knowledge.

One of the most important parts of a six-quarter mile walk is transparency. Everyone in your organization needs to see and understand the plan. Everyone has to know what they’re working toward. Everyone’s on the walk together, which creates organization-wide accountability and agility.?

I’m a huge advocate of a six-quarter walk, and there are more advantages than disadvantages. But there are some drawbacks you should be aware of before you jump in.

Pros and cons of a six-quarter walk

As I mentioned, a six-quarter walk keeps everyone aligned and on task, working toward the same goal. No one is asking, “Why are we doing this?”

This type of planning also highlights areas where help is needed. You can see if someone is falling behind or if a department is having an issue with an initiative. But because everyone is on the walk together, they can support each other.?

And it keeps the jack rabbits in check. (You know, the people who see a great opportunity and want to jump on it right away, even though it doesn’t fit into the six-quarter plan.) They might be right –– it is a great opportunity –– but you can point to the plan and remind them, “This is when we’re going to do that. This is when we’ll be ready.” And at the end of every quarter, there’s an opportunity to review if and how to shift things around.?

The biggest disadvantage of a six-quarter walk is that it takes time to set up in the beginning. But you’re already planning 12 months out –– you just have to add another six months on. And it’s much easier to update because you’re walking it forward, one quarter at a time.

A six-quarter walk can save you a ton of grief, as long as you’re consistently updating your strategy, your operational plan, and your budget on a regular basis.

So how do you get started?

Three tips for creating a six-quarter walk

The beauty of the six-quarter walk is its flexibility. You’re not stuck trying to adjust your existing 12-month plan if a big change, like a pandemic, or a small change, like inflation, happens.

Here are a few tips for extending your plan to 18 months:

• Make sure your plan aligns with your vision. Ask yourself how your six-quarter walk fits into your overall strategic vision. Where do you want to be in 18 months? Paint a vivid picture of that point. What capabilities do you need? What opportunities are you pursuing in the marketplace? And does everything align with the big picture?
• Include as much detail as possible. Once you’re clear on how things will look in 18 months (and what you’re aiming toward long-term), go back and ask what interdependencies you have. What initiatives are critical for success? What do you need to make this vision a reality? Lay out all those details over the 18 months.
• Update your plan. Make sure you have a quarterly process in place to update your six-quarter plan. And start asking questions about half-way through the quarter: What’s coming true? Are we on track? Why –– or why not? What hasn’t met our expectations?What’s changed in our environment? Our competition? Our customers? Are there new opportunities? How does our vision for where we want to be in 18 months change? Then, make adjustments to the plan and add on an additional quarter at the end.?

Remember it’s a living, breathing document. Yes, there is a big push to create the initial six-quarter walk. But after that first planning session, you’re simply updating one quarter of your plan based on what’s changed. Hopefully, you’re just updating a few things, but sometimes you will have to make wholesale changes if a big seismic event happens. And that’s okay –– your plan is a living, breathing document that’s constantly evolving.

Just like our livestream schedule! ?? We’ll return to our regular schedule after Thanksgiving. I’ll see you on Tuesday, November 29 at 9 am PT for a great (and timely!) conversation about giving.?

Your Turn

How do you handle strategic planning? Do you get everyone together? Or is it just one person creating the plan and asking for input? I’d love to hear what you include in the process and how far in the future you look. Please share your thoughts in the comments –– I look forward to hearing from you!

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