10 Tips for a Successful Annual Operating Plan
Let me share a number that should keep you up at night: 84.5% of strategic projects fail to reach completion.
That’s not a typo. According to ClearPoint Strategy’s 2026 Strategic Planning Report, which analyzed data from 2017 through 2024, the vast majority of organizations, 83.17%, are “very low performers,” completing less than 25% of their planned projects. Only 5.7% of organizations completed 75% or more of what they set out to do.
Think about that for a moment. Most organizations spend weeks, sometimes months, crafting annual operating plans that will largely sit untouched. The offsite retreats, the strategic facilitation, the laminated posters in the break room. All of it, for a plan with an 85% failure rate.
So why bother? Because the organizations that get this right, the 5.7%, gain a massive competitive advantage. What separates them from everyone else? How they approach the planning process itself.
Here’s what I’ve learned about building annual operating plans that don’t end up as shelf decorations.
10 Tips for a Successful Annual Operating Plan
1. Start with a Clear Vision and Objectives
What are you actually trying to achieve this year? How does it connect to your longer-term trajectory?
Here’s what the research tells us: simpler is better. The ClearPoint data shows that plans with fewer than 20 elements achieved a 68% high-performer rate. Plans with 20-40 elements? 22% completion rate. Plans with 40-60 elements? Just 15%. And plans with 60 or more elements? A dismal 8%.
The ideal portfolio, according to their research, has 5-9 strategic goals, 9-11 measures, 5-8 active projects, and 15-20 milestones. That’s it. If your annual plan looks like a novel, you’ve already lost.
I’ve sat through planning sessions where teams emerged with 47 “strategic priorities.” That’s a to-do list masquerading as strategy. When everything is a priority, nothing is.
2. Engage All Levels of the Organization
Involving team members from various levels in the planning process is strategic. The people closest to the work often have the clearest view of what’s actually possible.
But engagement goes beyond just inviting people to the planning session. It’s about whether they actually understand and connect with the plan after it’s created.
The numbers here are sobering. According to Gallup’s 2025 research, only 46% of employees feel clear about what’s expected of them at work, down from 56% in March 2020. That’s a ten-point drop in role clarity over four years. And it correlates directly with the broader engagement crisis: U.S. employee engagement fell to just 31% in 2024, the lowest level in a decade.
Gartner’s research is even more direct: helping employees understand how their work connects to the goals of others and the company can improve performance by up to 10%. That’s a hard number tied to actual output.
The gap between having a plan and having an aligned organization is where most companies fail. Your annual operating plan isn’t complete until the people responsible for executing it can articulate how their work contributes to it.
3. Conduct a Thorough SWOT Analysis
SWOT analysis has been a staple of strategic planning for decades. But let’s be honest about its limitations.
In a widely-cited 1997 study, researchers Hill and Westbrook observed that one of SWOT’s biggest problems is that organizations rarely use the outputs in the later stages of strategy. The analysis becomes an end in itself rather than an input to action. Wikipedia’s summary of academic criticism notes that SWOT suffers from a “static nature,” is susceptible to “personal biases in identifying key factors,” and can lead to “reactive strategies” due to overemphasis on external factors.
A Harvard Business Review article put it bluntly: most organizations do SWOT backwards. They start with internal factors, strengths and weaknesses, which devolves into navel-gazing. The smarter approach? Start with external conditions first, then explore internal capabilities, and finally generate recommendations using a simple structure: “Given the condition of [external factor], our ability to [internal factor] leads to our recommendation that we [recommendation].”
If you’re going to use SWOT, don’t let it become a hastily conducted exercise that produces vague, unverified lists. Commit to gathering real data. Challenge assumptions. And most importantly, connect the analysis directly to specific strategic actions.
4. Set SMART Goals
Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. You’ve heard this before. But there’s a reason the SMART framework persists: it works.
The ClearPoint research offers some useful benchmarks here. High-performing organizations have 5.83 measures per goal. Low performers have 3.43 measures per goal. High performers have 2.50 projects per goal. Low performers have just 1.08.
What does this tell us? The best organizations don’t just set goals, they instrument them properly. They build in enough measurement to know whether they’re making progress. And they connect multiple projects to each goal, creating redundancy and multiple paths to success.
But here’s the trap: the median number of projects rose 60% from 2017 to 2024, from 5 to 8. And the average number of milestones per strategic plan nearly doubled during that period, from 32.87 to 56.11. Organizations are adding complexity without adding capacity. More goals, more projects, more milestones, and worse outcomes.
Discipline shows up in what you’re willing to leave out.
5. Align Resources with Objectives
Effective resource allocation is the difference between a plan that happens and a plan that doesn’t. Listing goals and hoping the resources materialize won’t cut it.
This is where most annual operating plans fall apart. The goals are aspirational, but the budget remains unchanged. The priorities shift, but the headcount doesn’t. The strategy says one thing, but the calendar says another.
I’ve written before about decision fatigue, the idea that each of us has a limited capacity for decision-making each day. The same principle applies to organizations. You can’t pursue 47 priorities with the same resources you used to pursue 12. Something has to give.
Resource alignment means making hard choices. It means saying no to good ideas so you can say yes to the right ones. It means building slack into the system so you can respond to opportunities and threats as they emerge. And it means being honest about capacity constraints rather than assuming heroic effort will bridge the gap.
6. Develop a Flexible and Adaptive Approach
In today’s environment, flexibility is essential. Your plan needs to allow for adjustments and pivots without derailing your overall objectives.
This is one of the core limitations of traditional planning: it captures a snapshot of the current situation but doesn’t account for how things will evolve. Markets shift. Competitors move. Technology disrupts. A plan created in November may be obsolete by March.
Plan differently. Build in explicit decision points where you’ll reassess. Define the conditions under which you’d change course. Create a tiered structure where some elements are fixed and others can flex.
The BCG Strategic Risk Management Survey found that 74% of senior executives believe their companies have strong strategic risk management capabilities, yet most have experienced significant impacts from disruptions they didn’t see coming. Confidence in your plan shouldn’t mean rigidity. The best plans are robust enough to survive contact with reality.
7. Regularly Monitor and Review Progress
Setting up regular check-ins is survival. These sessions are opportunities to assess what’s working and what isn’t, allowing for timely interventions and course corrections.
Gallup’s research on managers is instructive here. Managers account for 70% of the variance in team engagement. Yet manager engagement itself fell from 30% to 27% in 2024. When the people responsible for driving execution are themselves disengaged, everything downstream suffers.
Regular reviews serve multiple purposes: they surface problems early, they create accountability, and they reinforce the importance of the plan itself. If you only look at the annual plan during annual planning, you’ve already failed.
The cadence matters too. Monthly is better than quarterly. Weekly check-ins on key metrics are better than monthly. You’re creating tight feedback loops so you can learn and adapt faster than your competition.
8. Embrace Technology and Innovation
Technology can be a critical enabler—but expecting it to solve a broken process will disappoint you. The right tools can streamline processes, enhance visibility, and surface insights you’d otherwise miss. They won’t fix fundamentals.
I’ve seen organizations invest heavily in OKR software, strategy management platforms, and business intelligence dashboards, only to discover that no one uses them six months later. The tool rarely fails. People stop using it.
Start with the process. Get the fundamentals right: clear goals, aligned resources, regular reviews. Then layer in technology that supports those fundamentals. The fanciest dashboard in the world won’t help if no one knows what they’re supposed to be doing.
9. Communicate Like Your Plan Depends On It
Because it does.
Clear, consistent communication keeps everyone aligned and fosters transparency. But most organizations dramatically underestimate how much communication is required.
Research on advertising shows that consumers need to hear a message seven times before they even begin to identify a brand with an attribute. Employee communication works the same way. You have to say it, say it again, say it differently, show it in action, and then say it some more.
The U.S. Merit Systems Protection Board research found that employee engagement is higher in organizations where senior leaders align their words and actions, communicate openly and frequently, and treat employees as valued business partners. The key words there: “openly” and “frequently.”
If you’re tired of talking about the plan, you’re probably just getting started. The moment you think everyone finally understands is the moment you need to double down on communication.
10. Learn and Evolve
Finally, treat each operating plan as a learning opportunity. What worked? What didn’t? What assumptions proved wrong? What would you do differently?
This retrospective discipline is what separates organizations that get better over time from those that keep making the same mistakes. Think of the annual operating plan as a hypothesis about what will drive success. Test it. Measure it. Learn from it.
Continuous learning and adaptation are the hallmarks of organizations that survive and thrive. In a world where change is accelerating, your ability to learn faster than your competitors is the ultimate competitive advantage.
Closing
Successful annual operating planning is a multifaceted process that requires clarity, collaboration, and ruthless prioritization. Most organizations overcomplicate it. They add too many goals, too many projects, too many milestones, and then wonder why execution falls short.
The 84.5% failure rate isn’t inevitable. It’s the result of planning processes that are more about theater than action. The organizations in the top 5.7% are more disciplined. They keep it simple. They align their resources. They communicate relentlessly. And they learn from every cycle.
A good plan today is better than a perfect plan tomorrow. Start planning now.
And then—this is the part most people skip—actually execute it.
References
ClearPoint Strategy. “Strategic Planning & Execution Stats: 2026 Report Insights.” November 2025. https://www.clearpointstrategy.com/blog/strategic-planning-and-execution-statistics
Gallup. “State of the Global Workplace: 2025 Report.” 2025. https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx
HR Dive. “US employee engagement falls to 10-year low.” January 2025. https://www.hrdive.com/news/us-employee-engagement-falls-to-10-year-low/737270/
Gartner. “Employee engagement and performance communication.” https://www.gartner.com/en/corporate-communications/insights/employee-engagement-performance-communication
Hill, T. and Westbrook, R. “SWOT Analysis: It’s Time for a Product Recall.” Long Range Planning, 1997.
Harvard Business Review. “Are You Doing the SWOT Analysis Backwards?” February 2021. https://hbr.org/2021/02/are-you-doing-the-swot-analysis-backwards
Maxwell Risk Group. “Why 72% of Strategic Plans Fail.” September 2025. https://maxwellriskgroup.com/why-72-of-strategic-plans-fail/
U.S. Merit Systems Protection Board. “Managing for Engagement – Communication, Connection, and Courage.” https://www.mspb.gov/studies/studies/Managing_for_Engagement_Communication_Connection_and_Courage_437591.pdf