Planning for the next quarter or six months can feel like a chore when you're moving quickly, but it's worth the effort. (BCV)

Planning and Goal-Setting Best Practices for Your Team

We’ll walk through how to set up your short-term and long-term business plans and effectively communicate them to your team.

11 min read October 24, 2023
The Head Start The Head Start Running Your Company Early

Are you an early-stage founder? Check out more insights on pitching, leadership, financials, product, marketing and work from the BCV team in The Head Start.

In my 20-plus years of working in startups, investing in startups and hanging out with a lot of founders, I have heard all kinds of comments about setting plans and goals:

  • “Things are changing so fast in my industry… I can only see a month or so ahead!” 
  • “We tried planning last year, and three months in we had to revise all of our assumptions and re-plan everything. Not making that mistake again!”
  • “It’s March and we don’t even have our plan figured out yet!” 

My time at the fintech OnDeck gave me a chance to experiment with all manners of planning and goal-setting across a company’s life cycle — I joined as its first employee in 2007, took it public as CEO in 2014 and grew it to ~$450M of annual revenue before we were acquired in 2020. Sometimes we outperformed, and sometimes we didn’t, but I came to believe that the act of planning itself is a vital part of creating a successful company and culture. 

Now, at BCV, I work with founders at all stages of the journey as they think about strategy and goal-setting for their teams. Some founders naturally take to it and get it done well in advance; for others, it is a process that gets procrastinated, procrastinated again and then done over the winter holidays in a mad dash. I was the latter type, but eventually the company’s growth forced me to become more of the former. 

In this article, I will lay out some of the key considerations as you design a planning process that is right for your startup. There is no one right way to do it, and what worked at Airbnb or Stripe will not necessarily work for your company and culture. But with some up-front thought and intention, adjusting as you grow, well-run planning processes will help you achieve higher levels of performance while building a cohesive, aligned culture.  

OK, but why is planning so important?

“Everyone has a plan until they get punched in the mouth.” — Mike Tyson, American boxer 

“Victorious warriors win first and then go to war, while defeated warriors go to war first then seek to win.” — Sun Tzu, the Art of War.

So who’s right, Iron Mike or Sun Tzu? I believe that even if you get punched in the mouth, you are better off having a plan than not. And, broadly speaking, in the BCV portfolio, we see the leaders that lay out clear objectives for their teams each year outperform the leaders who don’t. 

Startups are always executing against short-term demands — engineering sprints, sales and fundraising cycles, and building out new processes. But these efforts are often reactive in nature and, unchecked, can lead teams away from the North Star of the company. Planning is fundamentally proactive — it allows us to take stock of what choices the company has to make about how to compete and grow, and allocate resources towards those ends versus fighting the latest fires. 

Goal Horizons vs. Time Horizons

In the earliest days of building a company, especially when you are pre-revenue and focused on developing your first product, it can be hard to timebox activities. One way to counter this is to make the planning horizon based on a singular objective for the company and all the supporting work required to achieve that objective. 

For example, in the earliest days of OnDeck we created an objective around building the MVP version of our product and selling our first loan. Everything that rolled up to that objective was itemized and divided among our very small team. While we had an estimate of how long that work would take, a lot of what followed was only “unlocked” once we achieved that milestone, and it made sense to drive everything towards one goal. 

As your company scales and starts earning revenue, it usually makes sense to move to some kind of time-based planning window, especially as you have sales targets or financial objectives you are managing to. But annual plans for an early stage company can be dangerous — things are changing fast, punches in the face happen and you are constantly learning. 

At OnDeck, we tried a quarterly planning window, but as we scaled, we felt that it was too short a window to achieve step function changes in the business. We wound up standardizing a six-month planning window, which worked for us for many years, well into our life as a public company (much to the chagrin of some of our board members). It allowed us to maintain “goal relevance” and recalibrate mid-year if we were substantially off in our assumptions. When the business hit hundreds of millions of revenue, we moved to an annual planning cycle. 

Inputs and Outputs of a Good Plan

Let’s break it down:

Inputs: “North Star” + Strategy + Constraints

Outputs: Goals/OKRs + Financial Plan + Accountability

It is the responsibility of the leader of the planning process to provide the right inputs to the team working on the plan.

  • The “North Star” is ideally driven from the company’s mid- to long-term vision statement, perhaps with some updates or tweaks but likely not wholesale changes. The accomplishments you are targeting in the next planning cycle should bring you closer to the end-state described in the vision.
  • The Strategy lays out the means and choices/tradeoffs by which your company reaches the “North Star” end state. The process of setting strategy is beyond the scope of this article, but ideally the strategy is well-defined enough going into the planning and goal- setting process to be seen as a stable foundation by the team.
  • Constraints are critical to the planning process. Without them, teams with even the best intentions can start to drift outside the realm of what is possible or desirable for the business. Constraints are often financial in nature: e.g., maximum burn rate, revenue targets, margin objectives and so forth. But, I also have found it useful in the past to specify constraints that get to what is “out of bounds” for the planning process: e.g., we might focus on launching and scaling a new product to hit certain revenue targets, but two other contemplated products are out of bounds for this cycle.
    • Note: Some might read the above and think that the approach of constraining the team from the outset is draconian or somehow dismissive of the team’s input. Not the case! By explicitly listing out constraints, healthy debate can be sparked with the team on whether the constraints listed should indeed be constraints. But if you don’t list out constraints on the plan, it becomes a lot harder to reconcile and synthesize the work the team does during the planning process and a lot of time is lost synchronizing assumptions after lots of work has been done. 

Outputs from the planning process are then cascaded to the entire company, board, and in some cases, trusted partners. They include:

  • Goals/OKRs: I generally think of these goals in terms of magnitude goals and zero to one goals. Magnitude goals usually involve metrics like quantities of revenue, customers, partners and installs. Zero-to-one goals typically are centered on launching new programs, products or capabilities/features.
    • Note: Most plans have both types of goals, but I often see founders conflate the two and try to both launch a new initiative and hit a magnitude target for that initiative in the same plan. (e.g., “We will launch our new bank account product and get 5000 customer accounts opened.”) There is nothing wrong with this inherently, but leaders often underestimate what it takes to get a new initiative live and then scaling well, which leads them to wildly miss on these types of goals. Where possible, I recommend “two-stepping” this. Try to get to a launch and some modest number of customers in the first planning cycle, and then calibrate and start to set magnitude goals on the next planning cycle which will be much better informed.
  • Financial Plan: Usually a quarterly/monthly set of projected financials for the business, aligned with the goals that becomes the budget.
  • Accountability: A good planning process assigns accountability for the major goals and objectives to individuals (not departments) on the leadership team. Frameworks like RACI can be used to get more specificity on who is accountable for the work, who performs the work and what other departments need to be consulted or informed about the work. 

The Planning Process

With the plan inputs described above, you first need to review the inputs with the leadership team of the company to make sure everyone has shared context for the plan. Templates are useful to provide to each department to aid in the planning process and standardize the work each team is doing. Templates might have information on historical spend levels, financial performance or KPIs that allow teams to ground their work in the current trends in the business. 

Teams then go off and build bottom-up plans that map to the goals and constraints laid out by leadership. Senior leadership usually involves teams one to two levels down in the company to create these plans. In an early-stage startup that likely means even individual contributors will be involved as well. 

The plans are brought back to senior leadership for integration, which then reconciles discrepancies across departments and may adjust goals or re-prioritize objectives with the “reality check” of the planning work from each team. Finally, the reconciled and integrated plans are confirmed with the teams and (finally!) people can get to work.

  • Note: Founders sometimes wonder if they should do a “board plan” that is more conservative, and a “management plan” that is more aggressive for their teams. As the year plays out, this can often lead to a lot of confusion and extra work for the team to maintain and track actuals against both sets of plans. I am a bigger fan of having a single plan and financial projections for both the board and management, potentially with some “flex scenarios” around that core plan to show different possibilities (e.g., a core plan, a stretch/optimistic case, and a downside case). This keeps everyone speaking the same language.  

Rolling Out and Operationalizing the Plan

In a very early-stage startup, nearly everyone in the company gets pulled into the planning process. This makes operationalizing the plan easy: There is likely buy-in from the team and everyone is familiar with the details of the plan. 

But, as you scale, leaders need to roll the plan out to levels of the company that had little or no involvement in the plan creation process. This is a critical step — sometimes leaders are so relieved to be through the planning process, they don’t pay much attention to how the plan is communicated to the larger organization. 

All team members want to understand how their work connects to the critical objectives of the company, and this is one of the major determinants of retention. Accordingly, the plan can’t be seen as being “disconnected” from the reality of where the business is, or coming out of “thin air” with no context for why a particular objective was chosen.

At OnDeck, we would kick off each year (or earlier on, each half-year) with an all-hands meeting to roll out our key company-wide goals and financial objectives. Where appropriate, we would include context on how we arrived at key elements of the plan, or specifics on the process we went through. At subsequent all-hands meetings, usually every other month, we would do a check-in on how we were tracking against the key company goals, and use the same format with our board of directors in our quarterly meetings.

(Pre-COVID, we even made laminated cards with the company goals and themes for the year and sent them to every team member so they could refer to them all year long. Longtime team members collected the goal cards as a way of showing how long they had worked at the company, and displayed the collections at their desks!)  

Setting the tone

Every company is different, but planning is a universal opportunity for leadership teams to set the tone for upcoming work, achieve higher levels of alignment and performance, and build a more cohesive company culture along the way. 

Everyone gets “punched in the face” from time to time and has to deviate from even the most thoughtful plan, but in the long run, planning gets results.

Related Insights

The Head Start: Step-By-Step Guidance for Ambitious Founders

You’ve got a lot of hats. Here’s how to wear them well. As an early-stage founder, you’re doing it all. Recruiting a team, raising money, managing product, establishing a brand and culture, and telling the world why it should pay attention. Thankfully, our Investor and Platform team leaders have lived through it on both the…

Noah Breslow 1 min read
Bain Capital Ventures Business Building News Running Your Company

How To Hire an Expert When You’re Not an Expert

One of the hardest tasks an early-stage founder needs to confront is figuring out how to fill a role in an area that doesn’t fall into their expertise.

Leslie Crowe 6 min read
Running Your Company Early Seed