Annual Business Planning for CPG Success  8/15/2019

The four steps of successful annual business planning

Without internal alignment and a clear process, annual planning can be ineffective at helping CPG’s and retailers focus on profitable growth opportunities.

While execution is the focus and significant success driver in any plan, developing the best plan has been challenging to many organizations because of several factors, including: inconsistent discipline, process and tools; a lack of cross functional thinking, vision/strategy, and creativity; limited commitment from brands, retailers and executive sponsors; and no consistent KPI’s and tracking tools to measure results.

Annual business planning is the process of developing cross functional strategies and tactics at the company and customer level to drive category and brand growth. Much content resides in sales playbooks or similar internal documents, but it often lacks cross functional engagement and a customer level overlay to fully execute and drive growth. The planning process ensures a consistent way of analyzing and assessing opportunities, developing companywide strategies and initiatives and aligning to key performance indicators.  Additionally, annual business planning helps identify specific key action steps at the customer and initiative level, to drive customer brand and category growth. The cross functional component of this process ensures manufacturer internal alignment on key initiatives and roles of all functions in the delivery of key action steps.

Situation Assessment
For a company to have a successful planning process, a few important steps must occur. First, a great plan begins with a situation assessment, the point in time where the company and team step back from day to day activities and look more strategically at their business, their retailer’s business and how both engage with each other. This is the time to assess strengths and opportunities of the business and level of partnership across all functions, dive into shopper insights, and review past strategies and tactics to evaluate their success. The situation assessment is the foundation of a great plan.  Knowing where a company has been and performed sets them up to develop the best strategies to succeed in the future.

Strategy Development
After completing a situation assessment, teams need to develop their strategies. For annual planning, much of the strategy development should come out corporately, based on company objectives, innovation plans and insights on the best levers to drive the business. Company strategy, goals, key initiatives and KPI’s should come from a central location, usually Internal sales in the form of a sales playbook, so there is consistency across the organization and all teams are focused on the most important actions to drive profitable growth. Company Planning tools to identify strategies, goals, key initiatives and KPI’s help individual teams evaluate and plan their business and enable them to add action steps that are retailer and category specific to drive sales and profit at an account level. This is also where cross functional partners should be involved, so action steps include all aspects of the business for success, not just the sales leads.

Tracking and Measurement 
Ongoing tracking is also a key to a successful plan, as teams “manage what they measure.” Track KPI’s and hold teams responsible for attaining them and create a quarterly forum for KPI review. KPI reviews should be cross functional and include senior leadership. Teams can only be successful when everyone is aligned and moving in the same direction and senior leadership is driving from the top and committed to the same KPI’s and actions as everyone else. This ensures that all teams not only have the same goals and KPI’s, but are also responsible for attaining them and have cross functional partners and senior leaders engaged in the business. If the right goals and KPI’s are in place and the teams develop the appropriate action steps for their retailers and categories, then they should successfully achieve their objectives.

Planning is not a difficult process. The lack of consistency or a process, senior leadership support, cross functional engagement and ongoing tracking and measurement create challenges that must be identified and overcome. Developing your internal planning process, not just JBP for a few choice “top tier” retailers, gets all accounts moving in the same positive direction and has your sales organization, as well as their cross functional partners, focused on the most important strategies and tactics to drive the business.

Plan Activation
The result of the process, tools and templates, workshops and KPI’s is a fully operational, strategic growth plan of execution by customer and category, easily aggregated to a national or channel level with sales teams and the organization poised for success.



Jon Troy

The Partnering Group

Jon Troy is a Partner at The Partnering Group. His experience spans CPG manufacturers in HBC, food and household products, food brokers and industry service providers, IRI and Nielsen. During his career he has built category management and shopper insights capabilities with such organizations as Boston Beer Company, Johnson & Johnson, Church and Dwight and Campbell’s. He can be reached at (215) 694-3302 #thepartneringgroup

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