Once you complete your planning process, the final step is to sanity check your plan. If you have followed a good process (and used some techniques we covered this week) then you should already have confidence that your plan is realistic, but it helps to check one last time.
Here are some quick ways to check your plan and see if you’ve made some bad assumptions along the way:
- Revenue per Employee Projections. We’ve covered this metric before (simply divide gross revenue by number of employees), but it is doubly useful to check your plan. If you look at your Revenue per Employee today and what it will be at the end of your plan (if you hit your targets) it should be clear if your goal is realistic. If you plan to double revenue but not hire any more employees, then you should be sure that each employee can be twice as productive. If not, then you might have missed something.
- Reverse Chronology. There are only 365 days in a year, no matter how hard we try to change it. If your plan requires opening up 4 new locations and opening a new location takes 6 months, you might not be able to open all of them in the time you have. Work your way backwards from the end of the year to make sure that whenever you start executing leaves you enough time to reach the target.
- Capacity Planning. One of the most common ways we expect to hit aggressive plans is to do more projects at once. While it is great that you can do multiple projects in parallel, over-estimating how much you can do at once is the leading cause of missing goals. Break down your targets by the capacity they require (simultaneous projects) and look at your current capacity. If you are expecting your capacity to increase significantly, you may be overreaching.
A final, less quantitative check is whether your target is intimidating to your team. In my experience, great targets are intimidating but not depressing as the team feels challenged but not by an impossible goal. That can be hard to quantify but as team motivation is critical to success it’s an important factor to take into account.
Now that you have your plan in hand, tomorrow we’ll review some important things you should do to ensure your planning process improves over time.
Quote of the Day: “I became insane, with long intervals of horrible sanity.” ― Edgar Allan Poe