It's that time of year. As 2018 winds down, businesses everywhere are doing their 2019 planning. The type A personalities probably already have it done, while the rest of us are either squeezing it in before the holidays or blocking off days in January. I don't think there is a best time to do annual planning, so long as you do it.

While I don't care when you do it, I do care how you do it. I see many companies setting aside time for annual strategic planning and all they do is map out quarterly sales targets or forecast their key metrics. I hate to break it to you, but that's not strategic planning. That's forecasting.

Strategic planning involves carefully considering where you are as a company, the current state and future of the market, and making hard choices about how and where you'll apply your limited time, energy, and resources. It's more about making decisions, and less about setting targets.

My annual planning agenda is a two-day process. Day one is reflective and focused on generating options and possibilities for the future based on insights and trends. Day two does the hard work of prioritizing and focusing the organization to select a limited number of moves to execute over the coming year.

Here are the key highlights from that agenda you can use to up your annual strategic planning game. Even if you don't have two days, running through these in just one is better than skipping them.

1. Take the time to reflect deeply

Start with a review of the previous year. I like to structure this as a retrospective with a twelve-month timeline and a generous data gathering process. Gather input from the entire organization about what they recall from the last year. Make sure to include the good, the bad, and the ugly. Try not to edit at this stage, just let things come up.

Once you have the data, begin to look for insight, patterns, correlations, alignment, and disagreements about what happened, and if it was good or bad. Look for areas that need focused improvement. Select areas that are critical to your business and will impact your success.

2. Dig into issues to find root problems

Once you've identified areas that need to be worked on, dig below the surface of the issue to find the root problems. This is a two-part process:

First, you need to repeatedly ask why. This helps identify the underlying cause to the surface-level issues. If you're struggling with your accounts receivable, you might need to look at your delivery process or how you structure your engagements, not just how many times you email your client hounding them for payment.

Second, you can't blame people, you need to look at the system. People are only as good as the system they operate in and you can only address errors by creating a system that prevents them from happening. Take blaming people off the table; focus on what underlying processes need to be fixed.

3. Review your strategy and positioning

Once you have identified the changes you need to make, review your strategy. This will help you decide which one you really need to focus on. You might find ten areas that need improvement and come up with ten more changes that need to be made to them. You won't have the time to energy to do all them.

Assuming you have a good strategy framework in place that clarifies where you see the market going, how you will respond, and the key moves you need to make, update the strategy with current information around the market and the competitors. Make the necessary adjustments to your plans and update your moves.

4. Choose a handful of priorities for the year

Using your updated strategy, focus on making changes to the the areas that are critical to your strategic positioning and core capabilities. While you might have found several areas that need improvement, prioritize those that impact your strategy most directly. Choose three to five to put in your annual plan.

5. Communicate your plan to your stakeholders

Most importantly, after you've analyzed and identified the key changes you're prioritizing for the year, communicate everything to each of your stakeholders. You internal employees are the most obvious, but don't forget contractors/freelancers, vendors, partners, current customers, suppliers, and investors. These groups need to know you plans (at varying levels of detail and specificity) for the year.

If you haven't put together your 2019 annual strategic plan, it's not too late. Just remember that it's more than setting numerical targets, it's about making tough but important choices that you'll stick with over the coming twelve months.