Every other part of the plan works towards the direction. Initiatives work towards a pillar, climbs link to initiatives, and the weekly check-in and huddle keep the climbs moving. If the direction is vague, each team decides for itself what matters, and the teams end up working towards different things.
A direction has four parts.
- A vision, one sentence that says where the company will be by a set year.
- Targets, a few numbers that say what the vision means in practice.
- A not-to-do list of things the company has decided not to do.
- Pillars, the three to five goals that will get the company to the vision.
Write the vision in one sentence.
Halden Coffee’s vision is “By 2029, Halden is the coffee people ask for by name across the North.” It names a year, a place, and something you could ask customers about, in 14 words.
Choose a year three to five years away. That is long enough to change the company and short enough to plan for. Before you agree a vision, check it against four tests.
- It is one sentence, short enough to remember. Aim for 25 words or fewer.
- It names a year.
- It is specific enough that you’d know if you got there. It mentions something you could count, visit, or ask customers about.
- A new starter would understand it on their first day, without anyone explaining it.
Words like “world-class”, “leading”, “best-in-class”, and “excellence” fail the third test, because nobody can say on which day a company became world-class. Jargon and acronyms fail the fourth.
Try it with Halden’s vision below. Choose a part for each gap, or click into the sentence and type your own.
- One short sentence, passed13 words
- Names a year, not yet
- Something you could check, not yet
- No vague words, not yetworld-class+1
- Plain enough for a new starter, not yetstakeholders
Add targets.
Targets are a few numbers that describe the company in the vision’s year. Halden’s targets for 2029 are £9m revenue, 400 wholesale accounts, and eight cafés of its own. Keep to three or four, and choose numbers you can look up in your own records.
Keep a not-to-do list.
The not-to-do list names things the company has decided not to do, even though they would bring in money or someone keeps suggesting them. Once the list is agreed, the leadership team can turn those ideas down quickly, without discussing them again each quarter.
The most useful entries come from real suggestions. If an idea has come up twice and been turned down twice, put it on the list.
Here are six ideas Halden’s team raised this year. Decide whether each one fits, then see which line of the direction answers it.
By 2029, Halden is the coffee people ask for by name across the North.
- £9m revenue
- 400 wholesale accounts
- 8 cafés
- Supermarket own-label
- Franchised cafés
- Coffee pods
Choose three to five pillars.
A pillar is one of the goals that will get the company to its vision. Each pillar has three parts.
- The title is two or three words, so people can refer to it easily.
- The intent is one sentence that says what the pillar means.
- The done when is one line that says how you’ll know the pillar has been achieved.
- Intent
- Make home subscriptions a third of revenue.
- Done when
- Subscriptions are a third of revenue for two quarters running.
Halden has four pillars. Each pillar needs time from the leadership team, initiatives of its own, and people to work on them, so the more pillars you have, the less of that time each one gets. Three to five is enough to cover what matters without spreading the team too thin.
Try adding pillars to Halden’s four. The picture shows how the leadership team’s attention is shared between them.
A pillar is a goal that several teams work towards.
Name each pillar after something the company wants to achieve. Avoid naming pillars after departments such as Marketing, Operations, or Technology.
A department has no done when, so a pillar named after one can never be finished. It also belongs to a single team, while most goals need several. Growing subscriptions needs the Subscriptions team to run the offer, Marketing to find new customers, and the Roastery to keep up with orders.
Some work keeps the company running without moving any pillar, such as new accounting software. In Headwater, initiatives like this sit under “Not in a pillar”, so they don’t need a pillar of their own.
Sort the cards below into goals and departments. Once sorted, each department shows a goal it could be rewritten as.
Agree it in the annual planning session.
The leadership team sets the direction together once a year, in the last quarter of the financial year, before the new year starts. Set aside a full day, and work through the session in this order.
- Look back. Read last year’s vision, targets, and pillars, and mark the pillars that are done.
- Vision. Check the vision still describes where you’re going. Change it only if the company’s direction has changed, then update the targets and the not-to-do list.
- Pillars. Close any pillar that is done, agree the three to five for the year ahead, and write an intent and a done when for each.
- Initiatives. Plan the projects for each pillar. This is step two of this guide.
- Structure and Confirm. Check every seat in the ownership chart has someone in it and every team has a lead, then confirm the plan.
If anyone in the room disagrees with the direction, talk it through before you confirm. Everyone should leave able to explain the vision and pillars in their own words.
Annual planning in HeadwaterThe annual session goes through Vision, Pillars, Initiatives, Structure, and Confirm. Only the leadership team and admins can edit the vision and pillars, and nothing is locked until you confirm.The direction on the strategy mapThe Planning page and the strategy map both start with the vision and pillars, and show each initiative and climb beneath the pillar it belongs to.Mistakes to avoid.
- A vision nobody could check“Be the best coffee company” can never be reached or missed. Name a year and something you could count, visit, or ask customers about.
- Too many pillarsSix or more pillars share the leadership team’s time between too many goals. Merge the ones that overlap, and move the rest to the not-to-do list or to a later year.
- Pillars named after departmentsA pillar called Marketing has no done when and belongs to one team. Write the goal that team is working towards.
- A pillar with no done whenWithout a done when, nobody can say whether a pillar is finished. Write one line that someone outside the leadership team could check.
- Rewriting the vision every yearThe vision is meant to last until its year. In each annual session, check that it still holds, then review the targets, the pillars, and the not-to-do list.
- Writing it aloneA vision one person writes alone is one the rest of the leadership team hasn’t agreed to. Draft it together in the session, even if it takes longer.