Strategic Planning & Strategic Agility
Strategic planning is the process by which an organisation defines the projects, initiatives and actions (the plan) that will achieve their corporate vision or mission. It is traditionally very time-consuming with lots of data collection and meetings amongst executives. Once the plan is complete, it is presented as a fait accompli to the rest of the organisation to implement. However, ask any executive (over beer) and they’ll admit that this process doesn’t work – there are very few real innovations and the plan itself is usually out of date before it begins.
I want to get one thing out of the way; forget the 5-year plan. And while you’re at it, forget the 12-month plan as well. As an agile organisation, we want to move away from the traditional & static planning process towards a dynamic & agile strategy that can adapt as the market changes. We might also call this a “learning organisation”; one that uses an “inspect and adapt” feedback cycle to continuously create and refine their corporate strategy.
A quick side note: a common misconception is that agile corporate strategy means dividing up the plan and incrementally delivering it using Scrum – this is not what an agile corporate strategy is about. At best, that is “doing” agile not “being” agile.
Business agility and the strategic planning process
An agile organisation starts in the same place as a traditional organisation – with the vision & business outcomes for the organisation. And while the vision may change to meet market demand, it usually changes very slowly. Executives come together to agree on, and align to, the vision and outcomes (and the part of it that they are accountable for) – but here’s where it diverges. Rather than spend months creating and agreeing to the plan – the executives agree on “how” to plan. The approach that they and their teams will use to;
- incrementally create & refine the specific initiatives that will work towards the vision
- embed continuous improvement into the process
- inspect and measure the impact the current iteration is having on the vision
- the budget for the initiatives – which, if we know the expected value (to the organisation) of the work, and continue to inspect and adapt, we don’t need to know what it will be spent on ahead of time.
We also want this to be an inclusive process; more agile organisations bring the entire organisation (or representatives for massive organisations) into the process. This doesn’t mean sending out surveys and asking for feedback – this is to get the teams deeply involved in the planning and decision making process itself. In some cases, the teams will decide on the vision rather than the CEO and board.
What is strategic agility?
Strategic agility is the capacity for your organization to sense change in the environment and adapt in a way that continuously builds value for your customer*. We have defined many categories of agility here. Strategic agility is an organizational “muscle” that unites all of them. It encompasses your market; sensing change in your industry, supply chain, and customers. It requires a different way of thinking and leading. It requires organizational flows spoken of as Structural Agility. These are traditionally areas that are referred to as strategy formulation. The other wing of the bird is strategy execution, and here is where an agile organisation requires Craft Excellence, Process Agility, and Enterprise Agility. So, strategic agility is a holistic perspective that brings together thinking and action in a continuous learning cycle that makes the organisation more adaptive. Learning from a continuous process of disciplined experimentation feeds back up to the high level elements of the strategy, such as the vision and the major priorities, and may lead to modifications of these.
* Definition taken from Start Less, Finish More: Building Strategic Agility with Objectives and Key Results by Dan Montgomery, to be published September 2018.
The strategic management process
Strategic management is a repeatable business process that links formulation and execution of strategy into a regular cycle of strategic thinking, planning, action, learning and adaptation. This term was developed in the 1990’s to address the disconnect between strategy formulation – the “sexy” part of strategy that typically involves highly paid consultants, lots of number crunching, and generation of new visions – and strategy execution. Execution was too often treated as an afterthought, leading to a high percentage of failed implementation.
Teams within an organisation are key to an organisations success. In an agile organisation decisions are made at the lowest level; by the people who are doing the work and have the most information. And the corporate strategy is no different; the teams will be accountable for its implementation. Executives have two options;
- The first is to retain control over the work and act as the “Product Owner” for their part of the corporate strategy. The executive would be responsible for creating and maintaining the product backlog and actively participating in the process. This follows the Scrum process closely.
- The second is to delegate the outcome to the team. Because the corporate strategy impacts the team directly, it’s a little different to a standard product. If they’re inspecting and adapting the team can act as their own product owner and decide on the specific activities to achieve the outcome.
I should note here that you must fund the teams (with money and time) to do this work. If it’s important to the organisation (and by definition it’s the most important things to do), then give the team the time to work on it. It’s not a stretch goal or something to be done alongside their day-job. This is the critical work needed to realise the corporate vision; and if the vision isn’t important, don’t waste everyone’s time.
Finally, the feedback cycle. Because we’re dealing with strategic initiatives, we usually don’t have the same instant validation that we would with a product. However, constant feedback is still needed – look for a combination of lagging and leading indicators that represent success (e.g. staff attrition or industry awareness). However, be alert for vanity metrics; those that, if you improved the metric there would be no meaningful improvement to the organisation (e.g. Increasing Facebook likes or team velocity).