Time to Value: 8 mins
A few weeks ago, I wrote about why Q4 isn’t about saving 2025. It’s about setting up 2026. The response was clear: everyone gets the mindset shift, but executing it while managing performance reviews, bonus decisions, and board updates feels impossible.
November and December bring real pressure. You’re closing deals, finalizing compensation, planning next year’s strategy, and trying to give your team a decent break. But this chaos is also when you build the foundation that determines whether 2026 starts with momentum or scrambling.
No one gets this perfectly. The difference between teams that hit the ground running in January and those still figuring things out in March comes down to three key areas: making informed decisions about your team, establishing a consistent operating rhythm, and aligning on the key metrics that matter.
Let’s break down what that actually looks like.
👥 People: Avoid the Recency Trap
Performance reviews at year-end are tricky. You’re evaluating an entire year while Q4 is still unfolding, which makes it easy to overweigh recent wins or losses.
That presentation that landed last week suddenly defines someone’s whole year. The project that hit a snag in October becomes all you remember about a solid contributor. This is a case of recency bias, which distorts your view.
Go back through the year. Pull up your one-on-ones from Q1 and Q2. Look at the goals you set in January. Review actual deliverables across all four quarters, not just the last two months. Your team deserves that rigor, and your business needs accurate assessments.
But year-end reviews aren’t just about looking back. They’re about positioning your team for what’s ahead.
What’s Actually Changing in Your Market?
Before finalizing reviews and compensation decisions, take the time to understand the external forces shaping 2026. I use the PESTLE framework (old school, but it works)
Political shifts: Any elections that just happened? New regulations coming? Tax policy changes? Regardless of the market you’re operating in, political transitions can significantly reshape your entire operating environment.
Economic pressure: Currency volatility, inflation forecasts, and interest rate changes. A 15% currency swing isn’t theoretical. It changes your pricing, your margins, and your hiring plans.
Social Patterns: How Are Customer Expectations Shifting? Where’s your talent market heading? Remote work changing where you can hire?
Technology disruption: What tools emerged this year that could change how you operate? AI isn’t coming. It’s here. How does it affect your product, your competition, and your efficiency?
Legal changes: New employment laws, data privacy requirements, and tax regulations. In fintech or healthtech, compliance shifts can shut you down or open new markets.
Environmental factors: Supply chain regulations, sustainability requirements from enterprise customers, and infrastructure reliability. If you’re importing or operating across regions, this affects your costs and timelines.
Not all of these carry the same weight. What matters most depends on your business model, where you operate, and the stage you’re at. Focus on the two or three that will actually shape your 2026.
Pair this external view with an honest internal assessment:
- Where did you actually outperform this year?
- What weaknesses keep showing up?
- What opportunities are you not pursuing?
- What threats are you not addressing?
Insight emerges from the intersection of external forces and your internal reality. Are AI tools maturing when your ops team is burning out on manual work?Opportunity.Rising customer acquisition costs when your retention infrastructure is weak?Urgent priority. These intersections tell you where to invest in your team for 2026
💡 Try this week: As you finalize 2026 plans, run PESTLE and SWOT to pressure-test which external forces actually matter and how they connect to your strengths and gaps.
⚡ Process: Lock in Your Operating Rhythm Now
Year-end works better when everyone is aware of what’s happening. Your leadership team usually has context. Your broader team doesn’t, and that gap creates problems.
Three Things That Break During Holidays
The weeks around year-end consistently reveal the same operational gaps.
Decision authority gets murky. Leadership is scattered across time zones and vacation schedules, but deals still need to be closed and customer issues still arise. When your team doesn’t know what they can decide without you, everything comes to a standstill.
Critical coverage isn’t clear. Someone books a flight, and suddenly you realize they’re the only person who knows how to handle something important. If one person’s absence stops a critical function, you have a dependency problem to address in Q1.
Financial alignment falls apart. Your finance, sales, and ops teams need to see the same picture before people scatter. When they don’t, you’ll waste January arguing about assumptions that should have been locked in December.
What Good Looks Like
Teams that move smoothly through year-end do a few things differently.
They’re explicit about decision authority during holiday weeks. People know what can move forward and what needs to wait.
They map their coverage before people book flights. Everyone knows who to reach if something breaks, and no one comes back to preventable fires.
They align on the numbers that matter. Q4 close, 2026 assumptions, board reporting metrics, runway, and burn. When leadership sees different versions of reality, you lose weeks trying to sort it out.
Three Conversations Worth Having
Your board needs to know how you’re handling year-end. Not the details, just enough to see you’re ahead of it.
Your team needs clarity before they leave. What’s the timeline for reviews and bonuses? Who’s handling what during the holidays? What does closing 2025 strong actually mean? Vague answers create anxious teams.
And you need to define what “done” looks like for yourself. If you’re not clear on that, you can’t help anyone else get clear.
💡 Try this week: Align your leadership team on when 2025 closes – what counts toward this year, what rolls to 2026, and where you’re landing.
📊 Data: Model What’s Next
Once you’ve agreed on when 2025 ends, the next step is modeling what 2026 could look like based on how your business actually performed this year.
Why Scenario Planning Matters
Most teams build a single forecast for 2026 and treat it like reality. When Q1 numbers don’t match expectations, no one knows what to adjust.
Strong scenario planning utilizes multiple versions of next year, including optimistic, realistic, and conservative scenarios, all built from actual 2025 data. Not what you hoped would happen, but what actually converted, how growth really trended, and where execution took longer than planned.
When Q1 data starts coming in, you’ll recognize which path you’re on and know what to adjust.
What Good Models Look Like
Use real performance patterns. Your actual conversion rates from pipeline to close. How growth accelerated or slowed through the year. Where hiring, sales cycles, or product releases took longer than expected.
Build three views: what happens if things improve, if trends continue, or if the market tightens. Each scenario presents different revenue outcomes, varying investment capacities, and distinct runway calculations.
You’re not trying to predict the future. You’re preparing to respond when reality diverges from your plan.
💡 Try this week: Work with your finance lead to model three versions of 2026 using your actual 2025 performance data. Focus on directional clarity, not precision.
🧠 Tonio’s Corner: The Question Most Leaders Skip
The leaders who enter 2026 with aligned teams didn’t just plan better. They asked better questions.
Specifically: When’s the last time you asked your leads what their function needs to become in 2026?
Not their quarterly targets. Not their project roadmap. What does sales need to look like in six months? What does the product need to evolve into? What does ops need to build?
Most leaders assume functional planning happens naturally. Sales figures out sales. Product figures out product. Ops figures out ops. However, when the new year begins, the plans don’t align.
Your job isn’t to plan for each function. It’s to see how they depend on each other.
Sales wants to move upmarket, but the product is currently focused on features for the existing customer base. Ops is building systems for scale, but finance is planning for efficiency. Each plan makes sense in isolation. Together, they don’t add up.
Smart leaders use year-end differently. They ask each function lead to articulate their 2026 vision, then they surface the dependencies. Where does sales need product to be? What does the product need from ops? Where does Ops need clarity from Finance?
That’s where the misalignment lives: in the assumptions each function makes about what others will deliver.
One conversation that connects these dots before year-end saves months of friction after. You don’t need perfect alignment. You need to identify the gaps and determine how to address them before the year ends.
This is what year-end planning actually requires: seeing the whole picture when everyone else sees pieces.
You avoid recency bias in performance reviews because you’re looking at the full year and what’s ahead. You create an operating rhythm because you see where misalignment will break things. You model scenarios because you understand the difference between what you hope will happen and what your business can actually deliver.
And you ask your function leads what 2026 looks like for them because you’re the only one positioned to see how those visions either reinforce each other or pull in different directions.
The frameworks matter. The data matters. However, leaders who started January ready, versus those who caught up through March, recognized the connections earlier than anyone else.