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  • Writer's pictureAlex Handsaker

Why End-of-Year Planning is a Recipe for Disaster (And How to Avoid It)

Most revenue leaders are no stranger to the pressures of driving revenue and hitting targets, whilst treading the balance of doing it in a cost efficient (or even better profitable!) way. But if you're still treating planning as a once-a-year, end-of-year task, you could be setting your business up for failure.


Here's a run down on why all-year-round planning is crucial for the success of your sales and commercial teams, and how it can impact everything from headcount and capacity to profitability and risk management:


Continuous Planning - What is it?


It's easy to understand why end-of-year planning has been the norm for so long: It's a time when businesses have a clear idea of where they stand financially and can assess their performance over the past 12 months, but relying on this single planning cycle can have some pretty serious consequences.


For starters, you're only getting a snapshot of your business at that specific (November-ish) point in time, making it difficult to spot some of the long-term emerging trends which in turn leads to misinformed decision-making and missed opportunities. When businesses are in the habit of using Q4 to plan, Q1 to execute and Q2 onwards to gather momentum, the patterns that emerge out of adopting a plan can take time to come to the surface, and sometimes don’t hit in a way that can be taken into account in fixed planning cycles.


Continuous planning (or agile planning) is a different approach that allows you to track progress and adjust your strategy on a regular basis, helping you stay ahead of the curve and respond to changes in the market more effectively.


It also has the added benefit of fostering a culture of agility and adaptability within your organization - With all-year-round planning, your teams get used to regular review and assessment, making them better equipped to handle unexpected challenges and pivot when necessary, where being able to react quickly can mean the difference between success and failure.


The Impact on Headcount and Capacity Planning


End-of-year planning doesn’t just risk missing growth, it becomes a burden on cross-department resources at one of the (if not the) busiest times of the year, leading to a bunch of knock-on problems when it comes to managing teams, headcount and capacity.


One of the worst problems that it creates is the feast-or-famine mentality towards hiring, where you're either frantically trying to hire and onboard new team members at the last minute or and in the unfortunate situation of recent markets it leads to companies laying off staff to meet budget constraints. The compounded costs either real or opportunity build fast when headcount decisions are made in volume.


Territories, Quotas & Commission plans


It’s not even just the hiring that gets impacted - Territories, quotas & commission plans all fall victim to delays in pulling together the “annual plan”, and these are all areas that have massive real-world impacts on your current teams. Delay territories and leave sales people unable to sell, delay quotas and leave teams in the dark, delay commission plans and leave them unable to know what they can earn. When not delayed, they can be rushed, poorly thought out. Nothing says “we don’t care” like a low effort approach to quotas and commissions.


Continuous planning as an alternate approach helps you to make more informed decisions about your headcount and capacity, removing both the rush and the wait to make a decision. By continually reviewing your needs and performance, you can make sure that you have the team to hit goals and objectives without ever over or under hiring. It’s not just a time saver, it helps to create a more positive and productive work environment.


The Relationship Between Planning and Profitability


Profitability is the ultimate (or at least eventual) goal for any business, and effective planning is pretty crucial for achieving it. But it can be the reason for falling into end-of-year planning - It might give you a sense of your financial performance, but it doesn't provide the insights you need to make informed decisions about how to move the needle.


By moving your planning to a more continual approach, you have the data already at hand to move fast when it comes to end of year - Spot opportunities for cost-saving measures, such as streamlining processes or negotiating better deals with suppliers knowing what planning needs are likely to be.


The Biggest Risk of Single Major Planning Cycles


End-of-year planning may be a tradition, but it's also a risk, and some traditions really should be left in the past. 2022 saw the impact of unexpected change on cemented plans. Many businesses continued to mass hire despite their performance no longer keeping pace with their plan, only to find themselves making bigger changes to correct their course.


By relying on a single planning cycle, you're leaving your business vulnerable to factors that can throw your entire strategy off track, or worse leave your business at risk of running out of money.


So what next?


2023 will see the need for businesses to be smarter in the way that they operate, and that doesn’t mean switching to draconically conservative strategies, ignoring the opportunities for growth - It’s never been more crucial to move away from the traditional end-of-year planning cycle.


Instead, embrace a continuous planning approach that allows for regular progress tracking and strategy adjustments. By fostering a culture of agility within your organization and making more informed decisions about headcount, capacity, and profitability, you can position your business for long-term success. It's important to take the necessary steps now towards implementing continuous planning, it’s time to plan on hitting target.


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At Clevenue we're working to revolutionize headcount & capacity planning to make it continuous, intelligent and more accessible.


Don't let end-of-year planning hold you back - Start scaling in a smarter, more predictable way.



F.A.Q's


Q: Why is end of year planning a recipe for disaster?

A: End of year planning can be a recipe for disaster because it often involves rushing to meet deadlines, making hasty decisions, and neglecting to consider long-term goals and strategies.


Q: What are some common mistakes made during end of year planning?

A: Some common mistakes made during end of year planning include failing to set clear and measurable goals, not allocating resources effectively, and failing to communicate effectively with team members.


Q: What are some best practices for end of year planning?

A: Some best practices for end of year planning include setting clear and measurable goals, allocating resources effectively, and communicating effectively with team members. Additionally, it's important to plan ahead and not wait until the end of the year to make important decisions. Also, it is important to review and reflect on the past year, and use those lessons to inform the planning for the next year.


Q: What are some benefits of continuous planning cycles?

A: Some benefits of continuous planning cycles include: better alignment of goals and strategies with business objectives, more effective allocation of resources, and improved communication and collaboration among team members. Additionally, continuous planning allows for more timely adjustments and course corrections, which can lead to improved performance and competitive advantage.


Q: How can technology support continuous planning?

A: Technology can support continuous planning by providing real-time data and analytics, automation, helping teams to quickly adapt to changes in the market.

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