Preparing For the Annual or Biannual Planning

Biannual planning at Big Tech and Amazon. Efficient planning approaches for managers and engineers.

The time to start planning for the new year is around the corner at many larger tech companies, while at others it’s already in full swing. This issue of the newsletter is about approaches you can take, both ahead of and during the planning period, so that you end up with a sturdy roadmap. We cover:

Annual and biannual planning approaches

• At most large tech companies.

• Amazon’s Operational Plan process with the OP1 and OP2 stages.

Engineering managers

• The big picture: getting an early peek.

• Product roadmap: getting involved early.

• Engineering roadmap: areas worth focusing on.

• Peer teams: using planning to strengthen relationships with them.

• Headcount asks: strategies for these.

• Checkist: for planning preparation as a supporting resource

Engineers

• Getting involved in planning: how can you do this, and what are the benefits?

• Helping your manager and your team: things you can probably already do.

Annual planning at larger tech companies

If you work at an organization with 50 people or less, planning for the next period is not likely to be complex. This is because it’s really easy to talk to most people, and to keep everyone on the same page.

However, as soon as your organization grows to 50 people and beyond, the informal and continuous nature of planning stops working. The company starts to split into functions like engineering, marketing, operations, sales or finance; functions which are interdependent, but start to have different goals. The challenge of keeping everyone on the same page and pushing towards the same goal, becomes more difficult.

So how do you go about deciding what to focus on for the next period? There are two extremes you can take:

1. Top-down approach. The CEO issues the goals for the company, and everyone gets in line and executes them. This is great for focus, but terrible for motivation, having your voice heard, and autonomy. This approach works particularly badly with software engineering, where the most efficient engineering teams tend to be empowered, autonomous and are treated as creative problem solvers, instead of factory workers. 

2. Bottom-up approach. Each team decides what they should be working on by listening to their customers, and off they go. This approach is great for empowerment and autonomy. However, it can result in a beautiful mess, where ten teams focus on eleven different things. This approach makes it difficult to work on larger efforts that need coordination between teams, as in a top-down approach.

The top-down meets bottom-up approach is what most companies end up with. In the article The secret to a great planning process - lessons from Airbnb and Eventbrite, Lenny Rachitsk and Nels Gilbreth outlined the concept of the “W Framework” which they have used variations of, at their respective orgs. This framework consists of four steps:

1. Leadership provides context with Teams

2. Teams respond with a proposed plan

3. Leadership shares integrated plan

4. Teams confirm their buy-in

This framework is an example of the top-down meets bottom-up approach. The article also shares handy templates to use for each of the steps that I suggest to take inspiration from. 

The top-down meets bottom-up approach is a logical choice for most tech companies because it mixes the upsides of the two approaches:

• Focus and alignment. Thanks to the top-down strategy, teams align themselves on the highest priority areas that company leadership has defined.

• Everyone has a say. Thanks to the bottom-up approach, teams have a say and push back on initiatives that don’t make sense. There’s some negotiation happening.

• Autonomy without chaos. The process allows for teams to be autonomous within bounds and to decide goals they’ll work on to support the organization-wide strategy.

Buy-in and motivation. The teams are part of the planning process. With a well-run process, every last individual contributor will feel like they have added to the process. This tends to result in more motivated people than a top-down approach produces.

Annual planning at Amazon

Amazon is arguably one of the fastest-growing tech companies, and one that has successfully moved into several verticals, from e-books, through e-commerce, all the way to cloud computing. Amazon is focused on execution and is known to iterate rapidly.

Amazon follows a bottom-up meets top-down approach that has many similarities to the model discussed above, but it also has a unique structure. Given the success Amazon has had with execution, let’s take a look at how they go about their planning process: