Toward Agile Strategic Planning

Agile , Strategic Planning Add comments

By Linda Parker Gates
Senior Member of the Technical Staff
Acquisition Support Program

Linda Parker GatesThe appeal of Agile or lightweight development methods has grown steadily in the software development community.  Having spent a number of years investigating strategic planning approaches, I’ve recently been thinking about whether Agile principles can be—and should be—applied to strategic planning.  This blog post examines the applicability of Agile principles to strategic planning.

Strategic planning is the process of defining an organization’s plans for achieving its mission. The purpose is to outline a broad approach to achieving mission-aligned goals derived through a process of analyzing the full organizational environment, taking into account the organization’s vision, goals, objectives, enablers, barriers, and values. Although descriptions and analysis of the present situation are included, a strategic plan doesn’t merely endorse the status quo; it is directional in nature and directs change of some kind. As such, strategic planning is a critical foundation for executing work. It sets the stage for division- and unit-level planning, as well as enterprise architecture, process improvement, risk management, portfolio management, and any other enterprise-wide initiatives.

Strategic planning typically follows this type of sequence:

  1. Scope the strategic planning effort.
  2. Build a foundation of organizational information.
  3. Define goals and objectives in terms of the organizational need and desired outcome.
  4. Identify potential strategies for achieving the objectives.
  5. Develop action plans.
  6. Identify project measures.
  7. Execute the work.
  8. Track progress.

My February 2011 blog post, Strategic Planning with Critical Success Factors and Future Scenarios, proposes the integration of the Critical Success Factor (CSF) Method and future scenario planning into the strategic planning process. CSFs are a group of factors that determine group or company success, including key jobs that must be done exceedingly well. Future scenarios are a tool for exploring multiple, possible “futures” and developing decisions or strategies that will serve the uncertain future well. Together, these two techniques help foster strategic thinking, which is a strong complement to strategic planning. They also provide some leverage points for making strategic planning more nimble.

The values presented in the Agile Manifesto focus on the following four principles:

  • individuals and interactions over processes and tools
  • working software over comprehensive documentation
  • customer collaboration over contract negotiation
  • responding to change over following a plan

The manifesto is careful to point out that a balance is required; that is, the counter values cannot be ignored. So a key question becomes: Can organizations benefit from pursuing strategic planning approaches that embody these Agile values?  The rest of this blog posting addresses this question.

Individuals and Interactions over Processes and Tools
A strong process is vital to effective strategic planning. Nonetheless, placing value on interactions between leadership and staff and on face-to-face conversations certainly enhances the value of the strategic planning process. Both the CSF method and scenario planning rely heavily on individuals and interactions. These conversations themselves bring value to strategic planning.

Working Software/Tangible Results over Comprehensive Documentation
A common criticism of strategic planning is that it over-emphasizes deconstruction of the past and present while creating the illusion that we can anticipate the future. If we replace “working software” with “tangible results” (to accommodate the strategic planning domain), I contend it is productive to focus strategy efforts on short-term accomplishments over thoroughly documented commitments about the future.

Customer Collaboration over Contract Negotiation
While contract negotiation is not particularly pertinent to strategic planning, a strategic plan serves as an informal contract with the organization. The idea of involving customers is also intriguing. In my technical report, Strategic Planning with Critical Success Factors and Future Scenarios, published in November 2010, I recommend involving customers in scenario planning since they bring an external perspective that can be critical to getting quality results. There may even be a greater role for customers in the development of strategy.

Responding to Change over Following a Plan
This principle offers great potential for improving the way strategic planning is conducted and the results realized in implementation. A good strategic-planning process has always done more than just produce a plan—it supports ongoing strategic thinking, discussion, and behavior. Strategic thinking focuses on finding and developing organizational opportunities and creating dialogue about the organization’s direction—these are the foundation of an organization’s readiness to respond to change. Strategic planning is enhanced by strategic thinking, which makes planning adaptive and in sync with an evolving environment. So is the planning activity itself still needed? Yes! Effective strategic work cannot be accomplished without it. If nothing else, the divergent results of strategic thinking must be operationalized through a convergent planning activity.

So, the next question is, how do we adjust the strategic planning process to make it more agile? 

The most effective adjustments to make are to apply the Agile values to steps 3 and 8 of the strategic planning process outlined above. Step 3 (Define goals and objectives) benefits from a focus on the first value (individuals and interactions) and the third value (customer collaboration).  Step 8 (Track progress) is enhanced through a focus on the second value (which I am calling “tangible results”) and the fourth value (responding to change). 

Interestingly, the CSF and scenario planning methods provide opportunities to integrate all four Agile values into a strategic planning process as follows:

  • In terms of individuals and interactions, CSFs are derived through interviews with managers, a critical aspect of the technique that involves one-on-one conversations with people very closely acquainted with operational issues.
  • Scenario planning is a team-based exercise that relies heavily on interactions among a representative cross-section of organizational staff.
  • The interview-based method for developing scenarios that Kees van der Heijden describes in his 1996 book, Scenarios: The Art of Strategic Conversation, can enhance the role of individuals in setting strategy. As noted above, scenario planning provides a good opportunity for customer collaboration. Scenario planning relies heavily on monitoring for early warning signs, which are indicators that a particular future is unfolding. These indicators help planners make adjustments to strategies or their execution. Combined with shorter cycles, monitoring techniques are critical for delivering short-term, tangible results and responding to change
  • It is important to understand the nature of planning.  The fourth agile value emphasizes responding to change over following a plan.  Without a strong plan, response to change is simply reaction, not agility. The Agile principles assert values in terms of preferences over the counter values. In the strategic planning domain, the ability to perform in accordance with Agile values requires significant strength in the counter values. Agility emerges from skill and strength in the counter values. It doesn’t replace them.

Agile strategic planning would best serve an organization that is applying agile methods.  If development teams are already using lightweight methods, leadership should consider adopting agile processes to move the organization toward its goals. In general, agile strategic planning can offer value to organizations that are complex or self-organizing and that focus on adaptive, iterative delivery.

Additional Resources:

To read or download a copy of the SEI technical report, Strategic Planning with Critical Success Factors and Future Scenarios: An Integrated Strategic Planning Framework, please visit
www.sei.cmu.edu/library/abstracts/reports/10tr037.cfm

To read the blog post, Strategic Planning with Critical Success Factors, please visit
http://blog.sei.cmu.edu/post.cfm/strategic-planning-with-critical-success-factors-and-future-scenarios

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4 responses to “Toward Agile Strategic Planning”

  1. IGNACIO MANZANERA Says:
    Excellent work
  2. Alan S. Michaels Says:
    Agile Strategic Planning - that's fabulous, Linda!

    This is a great blog (which I came across via your LinkedIn profile, which I came across via your excellent 2010 article on CSFs).

    One addition I suggest is to emphasize a little more that Step #1 in Agile Corporate Planning requires a clear, objective list of the company's Lines of Business (industries) it competes in at a granular (five forces) level to make the CSFs (especially Industry CSFs) most relevant.
  3. Alan S. Michaels Says:
    Agile Strategic Planning – fantastic idea, Linda!

    And thanks for the excellent summary of strategic planning above. You may even want to re-publish this article as: “Towards Agile Corporate Planning” because you correctly identify corporate, divisional, and business unit-level planning, where most other articles fall short.

    To quicken the move to agile, one insight we’ve learned over the years is that business unit plans (the building blocks of the corporate plan) have two parts. The first part is an objective understanding of the industry. (For example: a Michael Porter five forces industry analysis with competitor data, etc.) Increasingly, this analysis can be done outside the organization – and the analysis can be accessed on demand, which is as agile as one can get.

    The second part of a business unit plan – the internal strategy portion – can certainly be harder to make agile, although using a similar template across the company using component pieces can help a lot, because only a subset of the information requires frequent monitoring.

    Two articles that may be of interest for agile strategic planning:

    [1] “The Industry Graph” - A good summary of knowledge graphs, with a focus on line-of-business information http://discoverypatterns.com/assets/IndustryGraph20131014.pdf.
    [2] “Strategic Decision Making Using Real-Time News Patterns” – A good (but long) white paper on building an agile corporate planning system (with an automated Big Data feedback module). http://www.industrybuildingblocks.com/pdfs/Strategic%20Decision%20Making%20Using%20Real-Time%20News%20Patterns.pdf
    .
  4. Linda Parker Gates Says:
    Thanks, Alan, for the suggestions and references.

    I agree that a baseline understanding of an organization's competitive environment and strategic context are critical assets in a strategic planning effort, and solidifying that picture (step 2 above) actually enhances an organization's planning agility (i.e. ability to respond to change).

    You might want to look at the Baldrige Criteria for Performance Excellence. They provide an excellent framework for understanding both competitive environment and strategic context.

    Thanks again for your comments!

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