Strategic Planning in Agile

What does strategic planning in agile look like? Do we need to fully understand and agree on a strategy before we proceed to deliver new products and outcomes?

Traditional strategic planning is very wasteful

Gartner [1] notes that while traditional portfolio strategic planning “sounds simple enough: Define the organization’s strategy and make resource allocation decisions to pursue it”, executives and their teams waste up to 56% of their time trying to come to terms with what a strategy should look like.

56% of executives’ time is wasted on strategic planning

Many people then measure “activity rather than effectiveness” [2] of their strategies as teams action the plan. The result of these more traditional ways of strategic planning is a focus on completion of tasks. This reduces both a) the ability of executives to assess whether work contributes toward the vision, and b) the ability to pivot and create a new , more effective path.

Change the focus from working backward to iterative forecasting

Rather than spending time defining and agreeing on a set of strategies, working backward, and then creating tasks to achieve the entire “to be” state, agile executive teams take an iterative approach. They start with the “as-is”, and work forwards in small steps. The result is less waste due to “just in time” planning.

Iterative strategic planning

1.  Describe the vision as a ‘Postcard from the Future’

Envisioning exercises tend to come up with motherhood statements, one liner catch phrases, and jargon riddled slogans that can confuse and alienate the very people its intended to motivate. Instead, describe the vision in very real terms as if you’re actually there. “Postcards from the future” is a useful exercise to frame people’s thoughts about a vision in a very tangible way.

A description of what a capability building strategy has produced as a post card from the future

2. Focus on the next 3-months in detail over the whole journey

Rather than starting with the vision and then working backward to create an entire strategic roadmap, consider:

  • The future is a journey. When you set out on a road trip you know your destination, but there might be incidents along the way, traffic congestion, roadside accidents, and even an unexpected need for a toilet break, that mean you have to take alternate routes. Expect to change your plans as you take steps to realise the vision.
  • Describe where you are now in relation to the “post card from the future” and what impediments or blockers need to be overcome right now. Expect that the journey to realise the vision will evolve and change as you’ll need to learn whether each step has been effective or not in realising the vision.
  • What are the first few steps? Executive agile teams describe 6-Sprints (3-months) worth of steps. Each step forms part of the Increment each Sprint. The steps are realistic enough to achieve but challenging enough as a constraint to encourage innovation.
  • Treat each step as an experiment. Experiments are highly structured and driven by hypotheses. That is, a set of actions are thought to be needed to produce an outcome, but we also need some metrics — quantitative or qualitative — to understand whether we will get the result we expected. It could be as simple as doing a “fist of five” activity to describe the current state and what the expected result is after the experiment is complete.
  • Describe “target states” over “goals”. Each step is made toward a target state. These are similar to goals, but they also describe the obstacles that need to be overcome – things that you might not yet know how to do that will reinforce the need to learn as you go.

This is the basis of iterative learning frameworks such as Toyota Kata — designed to operate in, and support, any context from IT to HR, business change and strategy.

The Toyota Kata

3. Treat each step as an opportunity to learn, not a problem to solve

Target states promote reflection and learning. Learning helps inform subsequent steps. After each step has been completed, retrospect and reflect on:

  • The step taken: What you’ve learned about the step just taken. Did you land where you thought you would?
  • The next step to take: What does that step mean in terms of taking the next step? Do you need to pivot? Are there new obstacles in your way? Do you need to do something else now to make progress toward the target state? What do you need to change? What do you expect to happen once you take the next step and make the next change?

Reinforcing opportunities to learn and holding people to account is a key aspect of the psychological safety of high performing teams [3].

4. Multiple Steps. Multiple Target States. Multiple Planning Horizons.

Many steps may be needed to reach a target state. Many target states may be needed to reach a vision.

You might need to take many steps, and have many target states, to reach the vision

With the first 3-months described, consider what target states are likely in the following 6-months and 12-months. The steps should provide:

  • Clarity: on the now regarding where you think you need to go.
  • Sufficiently detailed: to have a discussion and for people to confirm what that target step is.
  • Motivation: so that the target state is both achievable and is a stretch so there’s some pressure to perform (as per psychological safety).
Break steps into 3-month, 6-month, and 12-month horizons

Importantly, each target state beyond the first 3-months should be considered just a placeholder for a conversation. As you learn from each step and reaching each target state:

  • Adjust immediate future target states. This provides some comfort regarding the next steps of where you’re headed, sufficient clarity and purpose to motivate people, but avoids the waste usually associated with updating an entire strategic roadmap. This reinforces just-in-time planning.
  • Remove any target states that are no longer relevant. Fortunately, you’ve not spend lots of time predicting the whole strategic roadmap. There’s very little rework now. So, there’s little attachment to discarding targets that are either no longer relevant or don’t contribute any value to the vision.

Conclusions

Agile frameworks are effective because they rely on teams to inspect outcomes and adapt future work to achieve a vision. Iterative strategic planning in the form of Toyota Kata can assist executives to decrease the waste in big, up-front planning exercises, and turn abstract, strategic themes into tangible opportunities to learn what steps are actually needed to achieve an executive’s vision.

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1. Gartner (2018). A full 56% of the time spent on strategic planning is wasted.

2.  ANAO, Management of Learning and Development in the Australian Public Service, Report No. 64 2001-2002

3.  Edmondson, A (1999) Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, Vol. 44, No. 2 (Jun., 1999), pp. 350-383.

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