Jory MacKay
Jory is a writer, content strategist and award-winning editor of the Unsplash Book. He contributes to Inc., Fast Company, Quartz, and more.
December 19, 2023 · 10 min read

The ultimate guide to annual planning for product teams

The ultimate guide to annual planning for product teams: Illustration in blues and black showing

Contrary to what most product teams have heard, annual planning isn’t just reserved for senior executives and finance teams. Instead, it’s a core part of the project and product management process.

In fact, an annual product survey found that over 30% of teams plan their roadmaps a year in advance, dispelling the myth that agile teams shouldn’t waste their time planning far into the future.

If you’re a project manager or team leader gearing up to build a long-term product roadmap, this article is for you.

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In this guide, we’ll cover all things annual product planning — from what it is to a step-by-step guide to creating a highly effective plan.

What is annual planning?

Annual planning is the process of developing a plan — complete with goals, objectives, and milestones — for the year ahead. For product teams, annual planning helps create a high-level development roadmap that’s aligned with the product’s vision and strategy.

The key phrase here is high-level.

An annual product plan isn’t detailed because product teams must remain flexible to change priorities and customer needs. Instead, view your annual plan as your guiding star rather than a detailed set of instructions.

What’s the purpose of an annual plan for products?

So, if annual planning for product teams is just a guiding star, why bother spending time on it?

Here are some of the main benefits teams see when they go through the annual planning process:

It’s a myth that agile teams shouldn’t waste their time planning far into the future. 30% of teams plan their roadmaps a year in advance.

What should you include in an annual plan for your product?

While every organization has its own annual planning template, they all have several elements in common.

What should you include in an annual plan for your product? Illustration in blues and black showing

Here are some of the key components to include in your next annual product plan:

How to create an annual product plan you’ll actually use

It pays to follow a set process to get the best results from your annual plan. This helps everyone involved to stay organized, have an opportunity to contribute, and align on the final output.

To help you complete your next annual planning cycle and create a plan you’ll actually use, here’s a seven-step guide to take you from A to B.

1. Bring together your product’s A-team

The trick to an awesome annual plan is to create it as a team. Co-creation builds trust, buy-in, and collaboration. Without this, your plan is made by a sub-selection of people that inadvertently alienate everyone else.

Top tips for an awesome annual plan:

Screenshot showing an issue where teams are asked to share their ideas for the next annual planning meeting in sub-tasks.

2. Reflect on last year’s performance

You often have to look back to look forward. Annual planning is a great opportunity to reflect on what’s gone well and what could be improved from the last 12 months. This will help you learn lessons and put you in a better place to move forward.

Top tips for an awesome annual plan:

3. Align your strategy with the company goals

In most organizations, leaders want to see a joined-up approach. When formulating your own roadmap, it must align with the goals of your wider organization to ensure you’re doing your bit to achieve the company’s aims.

Top tips for an awesome annual plan:

4. Identify your major goals, objectives, and milestones for this year

You’ve assembled the A-team, reflected on last year, and got your strategy in place. Now, it’s time to make your to-do list for the year. Break your delivery down into goals, objectives, and milestones, but remember that an annual plan needs to stay relatively high-level.

Identify your major goals, objectives, and milestones for this year. Illustration in blues and black showing

Top tips for an awesome annual plan:

Plan in public. Screenshot showing issues related to the annual plan in a list, sorted into the different objective types

5. Consider your controls and draft your annual plan

Once all of the goals, milestones, and KPIs are agreed, it’s time to get on and actually create your annual plan. To make your plan a success, you also need to overlay your typical project management controls such as resourcing, budgets, risk, and issues.

Top tips for an awesome annual plan:

6. Gain approval from your stakeholders

Approval flows look different in every organization, but one of the final steps in the annual planning process is to get your plan rubber-stamped. This will ensure you have the resources, budgets, and stakeholder buy-in you need to realize your goals.

Top tips for an awesome annual plan:

7. Implement the plan, then monitor and report on progress

Great job! You’ve got your annual plan signed off, and it’s time to put it into action. Now it’s all about launching your plan and setting up management structures to monitor and report on your progress.

Top tips for an awesome annual plan:

Organize tasks and sprints in your project management tool. Screenshot showing a sprint in the roadmap view in Planio

As a final tip, remember that a new annual plan offers everyone a fresh start. The slate can be wiped clean, and everyone can re-focus on bigger and better things. To mark this fresh start, try bringing the team together with new team rituals to boost engagement, collaboration, and morale.

Annual planning is an excellent opportunity to also re-consider your ways of working. A bottom-up leadership style is proven to increase trust, and team engagement.

Annual planning FAQ: When to start, who’s responsible, and more

Annual planning can be daunting, especially if you haven’t done it before.

To finish, let’s run through some common annual planning questions and answers to ensure you’re fully prepared for your first planning cycle.

Q. Who is responsible for annual planning?

For software products, the annual planning responsibility will likely sit with the Product Manager. But, depending on your organization’s structure, it may sit with someone more senior, like a VP of Product, or more junior, like a Product Owner.

If you have any management or leadership responsibilities for a product, expect to be involved in annual planning at some point.

Q. When should you create your annual plan?

In most organizations, annual planning ties in with either the beginning of the calendar year or the beginning of the financial year. This is because budgets are allocated around these times.

But, if you have no constraints in your organization, you can do your annual planning at any time as long as it’s consistent year-to-year.

Q. How is an annual plan different from strategic planning or sprint planning?

Take a look at the table below to see the key differences.

Strategic Plan Annual Plan Sprint Plan
Objective Sets the strategic direction for a product, including the mission and value statement Sets out the goals and objectives for the year ahead Details the work to be completed in the next development sprint
Level of detail Very high-level, focused on outcomes rather than outputs Still high-level but includes tangible delivery objectives Very detailed on the specific items to be delivered and the tasks required
Planning horizon 3 - 5 years 1 year 2 - 4 weeks
Frequency of review Every 1 to 2 years Quarterly or Monthly Daily Standup
Stakeholders involved Senior Executives, VP of Product, Product Manager VP of Product, Product Manager, Product Owner, Dev Lead Product Owner, Dev Lead, Dev Team Members

Q. Once it’s agreed, can you change your annual plan?

Like all good plans, you need to have a structured process in place to make changes. Like in project management, products should have a built-in change control process to ensure changes are requested, reviewed, and formally approved.

Lose this control, and you risk scope creep eroding your objectives, goals, and customer value.

Q. Where does release planning fit into all of this?

Good question! In many annual plans, the yearly goals and objectives are linked to release plans, either quarterly or monthly.

Given releases are the points you deliver customers new features or upgrades, they’re great markers of your progress throughout the year. If you’d like to know more, check out our guide on how to master release planning, including a Free Agile release plan.

You don’t have to wait to start planning ahead

Despite the myths, annual planning is a crucial part of the product management process. While you need to remain flexible with your release and sprint plans, annual plans help set direction, secure resources, and align the whole team.

If you’re new to running a product, we’d recommend using a project management tool such as Planio to help with the annual planning process. Whether it’s bringing stakeholders together, brainstorming ideas, or simply keeping the planning team on track, there’s a range of handy features to ensure your next annual plan runs smoothly!

Try Planio with your team – free for 30 days! (No credit card required)