The accuracy trap

The annual planning process is somewhere between "broken" and "a farce.”

In most companies, the planning process is somewhere between "broken" and "a farce.” One big reason: the accuracy trap.

We agonize and argue over what precise contribution each department can make, 3 or 4 quarters out. We build fancy spreadsheets with single-dollar-precision estimates in month 10.

Just one problem: the future is unpredictable, and increasingly so the further out the forecast.

We use the false precision of complicated spreadsheet models to paper over the discomfort of an inherently uncertain future. It’s a waste of time and energy. Anything past 70-80% accuracy is seriously diminishing returns. Even reaching 70% accurate is hard.

So what should you do? Adjust your expectations.

**Explicitly aim for 80% accuracy, and 100% alignment.**

Building shared coherence and getting everyone rowing in the same direction is far more important than accuracy.

Next quarter we should have a darn good line of sight on. Anything past that, plan on a range of outcomes and expect to course correct at least quarterly. As the DevOps saying goes, "if it hurts, do it more often."

Perhaps one day our approaches to planning will accept and account for a constantly changing reality. Until then, let’s stop expecting a crystal ball.

(NB: I am *not* saying that planning is a waste of time. Planning is very useful. But the more useful part of planning is the alignment created by going through it together—not the resulting plan. Planning is useful. Plans are brittle.)