Never before-disclosed oracle planning techniques by Jeff Walker

Never-before-disclosed Oracle planning techniques

Oracle background
Jeff was CFO from 1986-1991
Staff grew from ~200 to ~ 12,000
Jeff founded, designed products, Applications GM from 1985-91

Consequences of doubling
Next year revenues > total revenues all prior years
Spending 75% > biggest revenue year
Headcount doubles each year
Over ½ staff < 1 year with company
Over ¾ staff < 2 years with company
Hiring 1,000 staff means roughly 5 per day
Special processes for recruiting, hiring, training, new employee introduction, management processes

MOKRs (Top down planning)
Mission
Describe purpose of this organization
Objectives
Name 5 or 6 major objectives this year
Key Results
Identify 20 or so measurable results to demonstrate achieving each objective

MOKRs (Mission, Objectives, Key Results)
Larry’s mission
Become the largest database company
Objectives
Double revenues
Gain market share on each competitor (KR)
20% margins
Reduce G&A to 5% of revenues (KR)
Hire only the best and brightest
#1 recruiter at MIT, Cal Tech, Sloan …

MOKRs (Mission, Objectives, Key Results)
Accounts Payable mission
Pay vendors and keep them happy
Objectives
Return all vendor calls within 24 hours
Significantly improve staff productivity
Introduce key indicators
Measure staff productivity (invoices/staff)
Improve productivity quarterly
Slow growth in number of invoices
Count invoices per month
Eliminate major-supplier invoices by paying on receipt

Key indicators (Drivers)
In each cost center
Identify “drivers” to predict costs (and revenues)
# of invoices
# of applications products
# of sales staff
Average price per sale
Measure “drivers”
Plan to drive key indicators in desired direction
Plan objectives around influencing key indicators
Use key indicators in budgeting

Budgeting (Bottom up planning + buy-in)
In each cost center (May 31 fiscal)
Draft detailed monthly budget in March for next year
Divisional controllers lead process
Budget only what you control
Roll-up and review budgets at responsibility levels
Divisional controllers supply corporate finance
Finalize budgets in April
Finance loads spreadsheets to Oracle GL
Budgeting ensures that managers “buy-into” MOKRs for their organization (or super-organization)

Over-assign (set bar high; overachieve)
Typical goal is everyone meets plan
Better is opportunity to blow-out plan
Key indicators determine revenue plan
# of sales staff * average sales per person
Over-assign means hire > you need
Wall street revenues = 90% of budgeted plan
Sales EVP quota = 100% of budgeted plan
Sales VPs quota = 110% of budgeted plan
District’s quota = 120% of budgeted plan
Total sales quota = 130% of budgeted plan

Responsibility reporting (accountability)
Monthly, Oracle GL produces
Budget versus Actual report matching budget detail
Managers review of subordinate performance
Culture of under-promise, over-achieve
Keep expenses under budget
Drive revenues over budget
Move key-indicators beyond planned key results

Weekly forecast (world-wide Monday)
Larry Ellison led 3PM Monday meeting
Every Monday (7 people including note-taker)
Sales (Gary Kennedy)
Europe (Geoff Squires)
International (John Luongo)
Marketing (Peter Tierney)
Development (Bob Miner)
Finance & Applications (Jeff Walker)
Roll-up meetings start early Monday AM
Final spreadsheets to corporate finance by Noon
Consolidated by 2PM; handed out at meeting
Jeff reviewed before 3PM meeting
Executives report activities and current-quarter cost-and revenue projections

Quarterly re-budgeting (raise bar)
Before each quarter:
Update rest-of-year budget
Attend off-site planning meeting
Update executive team on MOKR progress
Agree on new rest-of-year budget
Name the budget (Coronado, London, Sonoma, Monaco, Kaui, ….)
During my tenure as CFO, each quarter we:
Raised our revenue goals
Built infrastructure for following year
Increased our capacity investments

Oracle planning techniques
MOKRs (Top down planning)
Key indicators (Drivers)
Budgeting (Bottom up planning + buy-in)
Over-assign (set bar high; overachieve)
Monthly responsibility reporting (accountability)
Weekly forecasts (world-wide Monday)
Quarterly re-budgeting (raise bar)

Future of planning
Moore’s law guarantees software innovation
Improved user interfaces
Instantaneous computational speeds
Prosumerism
Technology becomes a competitive advantage
Planning Maturity Curve predicts
Interactive top-down planning
Buy-in integrated with planning processes
Budgets as an output not an input
Planning making drivers part of your culture
Contingency planning part of your culture

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Never before-disclosed oracle planning techniques by Jeff Walker

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