8 Tactics for Leading Effective Annual Planning Conversations

CFOs might cringe at the thought of strategic annual strategic planning. Not because they’re on the hook to deliver next year’s budget and financial targets to the board, but because of the often tricky psychological and interpersonal dynamics at play. To establish leadership alignment and clear objectives for the upcoming year, CFOs need more than a robust annual planning framework; they must be able to facilitate productive conversations, influence their CEO, and resolve conflicts between leaders.

We recently invited two CFOs-turned-board members and two experienced executive coaches to give CFOs in The Circle tactics for navigating the “softer” side of strategic planning: Sandra Smith (former CFO of Segment), Rob Krolik (former CFO of Yelp), Kaley Klemp (YPO-certified facilitator, author, and executive coach) and Doug Randall (Partner at The Trium Group and former founder & CEO).

Here are eight tactics for leading more effective strategic planning conversations revealed in that conversation:

#1 Align on the “Why” of Strategic Planning

While budgeting and financial strategy are a big part of annual planning, going into the process with a broader scope will allow CFOs and leaders to get more from the process.

“A great planning strategy is an opportunity to challenge assumptions and broaden thinking,” explained Doug. “It’s designed to be a messy process, but CFOs can bring in more structure by establishing clear objectives for what the group is trying to achieve throughout each step.”

Doug recommends starting each planning session by clarifying the objective of the conversation. “Are we agreeing on a strategy and set of OKRs, brainstorming ideas for a product, or is this a conversation about budget? Establishing the desired outcome can help get everyone into some level of shared context that will drive more productive conversations.”

#2 Get Clear and Early Direction on the “North Star” Vision

Annual planning conversations can feel like busy work if leadership isn’t aligned and contributing to a well-defined vision. As one CFO noted, 90% of the significant business priorities and budget for next year will come from the CEO and CFO, leaving the rest of the leadership strategy planning to feel like “a painful, numbers-driven exercise.”

To make early executive alignment sessions more productive, CFOs can work with the CEO upfront to identify the primary strategic objectives for the next year and share them with the leadership team before or during an initial kick-off meeting. This approach creates space for leaders to focus on execution within their departments and identifying barriers to achieving those more significant organizational priorities versus debating what vision everyone is striving toward.

“If the CFO and CEO know the big rocks and OKRs for the year, they could create a 1-2 page narrative and roadmap to share with the team. Establishing alignment on what’s important should be fairly easy with that kind of leadership direction, but everyone will have a different answer for how actually to achieve those goals. So that’s where the focus can shift to a strategic roadmap – what needs to happen, who needs to be hired, and how the team needs to work together to reach the end state.” – Doug Randall, Partner at The Trium Group

#3 Match the Environment to the Objective

Having facilitated countless executive offsites and planning sessions, Kaley believes establishing the right meeting environment can help CFOs engineer the desired outcome. For example, if you’re goal is:

• A serious discussion where you want leaders to debate and challenge each other – use a more sterile environment with bright lighting and hard seating, like a boardroom.
• A connected, familial experience to build trust and empathy– use a more warm and inviting setup with soft seating and low lighting, like a living room. 
• A get-it-done working session for quick input or buy-in  – have everyone on their laptop, working in a shared document together.
• A collaborative, expansive brainstorming session – gather everyone around a whiteboard to encourage contribution and creativity.

#4 Don’t be Afraid to Get Personal 

A CFO’s focus may be on the content of their planning sessions, but Kaley says context is critical to establishing meaningful interactions between leaders. Everyone arrives at the meeting with some type of personal context (perhaps jetlag from travel or an unplanned family event) as well as professional context (like a looming deadline or passion about a project they want adequately resourced). 

“Inviting team members to share their personal and professional context can bring down barriers, establish human empathy, and make the subsequent conversation more transparent and vulnerable.” – Kaley Klemp, facilitator, author, and executive coach

#5 Invest in Relationships with Your CXO Peers 

As Kaley put it, “relational capital facilitates the assumption of positive intent.” In other words, the stronger your relationships are with your CXO peers, the more they’ll trust that you understand and value their point of view in group debates and discussions. These relationships take time to build and shouldn’t be a focus only during planning season. But in the months leading up to the big push, CFOs should make the extra effort to get to know their colleagues on a more personal level.

“Make an effort to have coffee, dinner, or other in-person experiences with other leaders and maybe even their families. Create a bond that flows both ways: you have their critical support, and they know you have their back when you go into planning meetings.” – Rob Krolik, former CFO of Yelp

#6 Consider Bringing in an Outside Facilitator

Sometimes strategy conversations can get heated, with personal biases getting in the way of consensus and concrete solutions. External facilitators can help bring objectivity and structure to difficult or complex conversations.

“The benefit of an external facilitator is being able to draw out areas of misalignment in neutral ways that avoid the blame game. If your CEO is open to it, I would recommend investing in a facilitator.” – Sandy Smith, former CFO of Segment

#7 Influence the CEO

CEOs will have different levels of involvement in the planning process. Some prefer to be closely involved in every step, while others only feel strongly about a few priorities or initiatives.

Getting alignment on the CEO’s level of involvement and top priorities can help the CFO steer planning conversations accordingly.

“Sometimes it’s useful to do an exercise where you draw two concentric circles and ask the CEO to put in the center circle three things that are non-negotiable or their top priorities,” said Kaley. “Everything that falls outside of that center is a nice-to-have. You can ask the rest of the executive team to do the same exercise to see where there’s pre-existing alignment and potential debates to be had.”

Sandy added that while CEOs don’t need to be present during every planning session, she recommends CFOs regularly check in with quick offline meetings throughout the planning process. “It’s always good to gut check whether your CEO’s priorities have changed or if they want to increase or decrease their level of involvement with planning.”

#8 Align Board Member Expectations 

While the CFO will present the final plan to the board at the end of the planning process, engaging the board’s most vocal members early can help get their feedback and support on the framework and objectives.

“Identify those one or two members that are the linchpins of the board,” said Rob. “Before you go into planning, have conversations with them about their expectations, and then share your high-level thoughts and framework to see if there is any misalignment.” Doing this helps ensure there are no surprises when it comes time to present the final plan.

The Takeaway:

Annual planning sessions don’t have to feel like a useless go-through-the-motions exercise or an intense group therapy session. With the proper process framework and the above leadership tactics, CFOs can balance the art and science of annual planning to help their company achieve big things in the year ahead. 

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