Annual Planning links strategy to performance. During the retreat, the organization is examined from four perspectives and annual plans are developed to improve performance towards an overall Goal. Generally, all of the perspectives are identified and one or more objectives are established in each of the perspectives that supports the overall goals. An annual plan is developed with appropriate measures and milestones for the coming year and beyond.
The Financial Perspective
How do we add value for customers while controlling costs? These measures support the strategy for growth, profitability, and risk viewed from the perspective of an owner or shareholder. Would probably include such ratios and numbers as: Revenue, Earnings, Capital, Cash Flow, ROI.
The Customer Perspective
Who do we define as our customer? Supports the strategy for creating value and differentiation from the perspective of the customer. Might include objectives for: Customer Service, Pricing, Delivery Time, Image, Relations
The Internal Process Perspective
To satisfy customers while meeting budgetary constraints, at what business processes must we excel? Establishes the priorities for various business or operational processes that are critical in creating customer and shareholder satisfaction. Might include process objectives being established for: Production, Delivery, Marketing, Operations, Quality Control, Service Dept, R & D.
The People Perspective
How do we enable ourselves to grow and change, meeting ongoing demands? Measure activities that create a climate that supports change, innovation and growth. Employees, HR Capital, Knowledge, Technology, Best Practices, Intangibles are some of the areas that might be included in this category.