When I joined Amazon in 1999, we did not build good operating plans. By the time I left in 2015, our plans were world-class. Here are the components of a great plan so you can skip the 15 years of work that it took us to figure it out:
1) Introduction
The Introduction is very short and factual. Many readers may not be familiar with your organization’s size, scope, impact, and charter. Describe the business or function, the team, and their responsibilities and scope. If the team has established or wishes to propose any tenets, include them here. This should fill about one quarter of the page.
2) Metrics
This is a table of the most important metrics (> 5, < 20) for measuring and understanding the business. Of course, the list should include standard output metrics like revenue and gross profit. But more importantly, the majority of the metrics listed are what you deem to be the key controllable input metrics for your business unit and your proposed numerical targets for each. I would argue that this is the most important part of your plan. If you invest the time to define and select the right controllable input metrics and goals for each, then you establish a set of north stars that will guide your team's actions throughout the year.
3) Review of Prior Year and Market Trends
We looked for a candid assessment of what worked and what didn’t. A strong plan explains how the past year’s results shape the coming year’s priorities. It also shows awareness of changes in customer behavior, competitive dynamics, or regulatory shifts.
4) Problems and Opportunities
To drive meaningful improvement each year, you must first honestly reflect on what worked and did not, and what external trends like technology, competitor progress, and customer expectations are noteworthy. This section convinces you (the writer) and the reader that your plan is grounded in real data that matters. It will help you decide where to double down on what’s working and where to change.
5) Initiatives
Initiatives are where you explain what you plan to do. Initiatives include new business, product, or feature launches, projects to reduce costs or gain speed, plans to implement a new process, and more. Good plans differentiated between one-way door and two-way door initiatives. They also highlighted how each initiative is connected to the defined input metrics.
6) Resourcing Plan
Headcount and budget must align with the scope of work. Include hiring plans and changes in fixed and variable expenses. The allocation of these resources should be described in the prior initiatives section. A clear accounting of resources by project or type of work makes it possible to evaluate whether you have too many or too few resources to accomplish the projects outlined in the plan.
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