Your Strategic Planning Should Be Agile, Too

What has agile taught us about trying to plan everything up front? It usually doesn’t work. So why does your company still use a yearly strategic planning approach that takes six months to develop and requires significant time and effort to pivot to new opportunities and challenges? We need to rethink strategic planning to incorporate design thinking, collaboration, and agility.

What if I were to tell you that your corporate strategy consists of a three- to five-year plan, decomposed into one-year objectives, based on an analysis of the world as seen by a very small group of people? That it was probably created six months prior to year-end, essentially locking your organization into delivering on a goal more than eighteen months away? Executed by a cohort of MBAs who have never cut a line of code or worked with a team to solve real-world business problems?

I have taken some artistic license, but this is probably not far from how your organization executes its real strategic planning process. What you might hear as the rationale is that defining a company’s strategy is complex and requires vast amounts of research, or that external influencers (investors, suppliers, etc.) expect to see long-range plans.

But what’s one thing agile has taught us about trying to plan everything up front? It usually doesn’t work.

Life—and strategic planning—is a constant game of trying to make decisions based on incomplete information. The goal of strategic thinking, or the thought process for deciding which markets to compete in and how, is about trying to assimilate boundless information and make decisions that ensure the company's survival.

The Problem with Long-Term Strategic Planning

A yearly strategic planning approach that takes six months to develop and requires significant time and effort to pivot to new opportunities and challenges is no longer tenable. It’s not timely, nor does it deliver value. We need to rethink the art of strategic planning and how that plan can then flow seamlessly to an aligned execution capability.

I am working with a major nationwide infrastructure builder, a company where many believe there is little need for "true" agility. They have an annual strategic planning model that leads to allocation of investment spending across multiple business units, then subsequent team sizing and work prioritization.

In a conversation with some of their executives on the need for more dynamic, strategic prioritization and business agility, one acknowledged that the need for this year’s major component of work actually arose three months after the completion of their annual planning process and allocation of fixed yearly funding. Their strategic plan was out of date as soon as it was finished.

In the modern world, the customer is the boss, and they expect instant responses from the services they use. And those expectations are transcending industries, so what they expect from their digital native music streaming company, they now expect from their bank or network service provider, utility company, and even from their government. How often do you hear someone ask, “Why can't they just do that?”

This modern world is moving so fast we can't keep up, and competition can come from anywhere at anytime. Think about Pokemon Go. It launched in July 2016 and had more than five hundred million global downloads by the end of they year. It brought location-based and augmented reality technology into the mainstream in less than six months from launch. That was unheard of, but it will happen again.

What Needs to Change

Organizations that grew up in slower, more stable times need to adopt a more agile, dynamic strategic formulation process that learns and evolves. We need a model that allows us to take in more information and insights from across the organization and our market environment more regularly.

We need a model that allows us to shrink the planning batch and deliver it more frequently so it is always useful and always relevant; that allows us to set up and encourage synchronous information flows from all corners of the business, so when we sense changes in the market, that information can be channeled; and that allows people who build the solutions we provide to contribute ideas. We need to rely less on consulting firms telling us what our strategy should be and more on our people who engage with our customers.

Here are some ideas on how to get started.

Start with Intent

All change starts with recognizing you have a problem and establishing an intent to do something differently. A useful beginning is to form a question that helps your organization frame a problem statement, testing your assumptions and creating alignment of the activities you may do toward changing how you plan your strategy. It could be something like this:

How might we change the way business and IT strategy is conceptualized, developed, articulated, and relayed to stakeholders in a manner that allows for ongoing dynamic evolution and constant revision and relevance?

Such a question allows you to use elements of design thinking and human-centered design to solve your strategic planning problem in a more customer-centric, whole-system approach. The framing of your goal as a question to test instead of an output or objective to achieve gives you the space to not have all the answers and to spend more time working out the “why” of what you do, rather than diving straight into the “how.”

Once your hypothesis is created, design thinking techniques can be used to approach developing a strategic operating model that is fit for purpose, making sure we contextualize for the organization and solve the right problems. It also provides the rationale for conversations with others on why you are changing and how you are approaching that change iteratively, learning and adjusting as you go.

As an example, a year ago I did some work with the strategy team of a major financial services organization. They used systems thinking to create a visual, quarterly road-mapping concept where strategy was constantly validated against initiatives funded to deliver on strategic goals. This actually was a fantastic process, and it was the biggest change portfolio I had seen visually represented. The clarity of the work in progress, the linkage to outcomes, and the ability to regularly revisit initiatives for continued alignment to goals and progress were invaluable. Added to this was the ability to avoid duplication—work was stopped when it was discovered, reducing waste and increasing the return on investment of the change slate. The organization became better at globally optimizing its investment spend in place of locally improving.

Be Aware of Your Current Condition

When heading toward an agile planning strategy, an organization needs to consider how it goes about answering the following questions:

  • How do we keep an agile strategic plan relevant and timely?
  • How can we have synchronous information flow from all levels of the organization?
  • How do we allow teams to vary once they learn new things?
  • How do we maintain conceptual integrity?
  • How can we distribute strategy as broadly as possible?

But where do we start?

A lot of my work across different organizations implementing agile ways of working uses the heart of agile as a meta framework, and I use this same framework when helping to create an approach for agile strategic planning. (Thanks to Alistair Cockburn for the support and inspiration.)

The heart of agile consists of four quadrants that can be applied to dynamic strategy formulation, even alongside a design thinking framework:

Collaborate: "Independent of everything else, how will you engage the people you need to execute your strategy, rate that level of collaboration, and work with them to increase their commitment to the changed frequency, and then increase that rate of collaboration?"

Deliver: "Accounting for everything else going on, how will you increase the frequency of actual development and delivery of updated strategy to all stakeholders in a meaningful manner they can accept and absorb?"

Reflect: "How will you get people involved in the dynamic and ongoing development of your strategy to pause and reflect on what’s happening to and around them during and after the process without impacting the frequency of delivery?"

Improve: "What experiments will your people have the space and the capacity to do at different levels in the organization to make constant small improvements to all elements of strategy formulation and delivery?"

Using this as a framework will allow you to inquire of and hold conversations with your stakeholders, purposefully designing a strategic planning model that learns from everyone in the business and can sense and respond to changes in the environment.

Or you can keep thinking that once a year to plan your company's future is enough, remaining in blissful ignorance, safe that you have a plan. Which sounds more agile?

User Comments

Kathy Iberle's picture

Phil, thanks for the article.  It's very true that annual planning is often too slow to deliver good results.  Our Lean brethren sometimes use the Improvement Kata as an agile framework or method for strategic planning for improvement projects.  Here's a story you might appreciate about using the Improvement Kata to do more responsive "annual" planning in a software organization:   Kathy Iberle.

January 5, 2018 - 1:45pm
Phil Gadzinski's picture

Thanks Kathy, its a very fine line between strategy, planing and execution. but i think that line needs more blurring and and the ability to address more reguarly!  thanks for the share will read the article. phil .

January 6, 2018 - 7:56am
Allan Kelly's picture

The thing that has always struck me as odd about strategic planning is how it always seems to fall on the same dates each year, which funnily enough are also the dates for financial year end.

A few years back there was a great article in the Sloan Review (yes, a mag read by MBA-types) which described a company that ran strategy as three-month long iterations complete with co-located planning and reviews.  Its here, - behind a paywall but I think Google can find copies outside the paywall

January 9, 2019 - 10:21am
Phil Gadzinski's picture

Thanks for replying Alan.

yes odd isnt it?  Though not really when you consider that planing is aligned to funding which is aligned to accounting / reporting cycels. 

Thanks for the link will try and find a free copy!



May 31, 2019 - 1:49am
Katarina Gatwick's picture

Thank you for the article, very useful! And I agree that you can't rely on consulting companies for all 100% because you personally are involved more, you know better, sure. But I still believe that they can do a good job, give you a professional opinion about corporate strategy, a fresh point of view, you know. Just thoughts :)

December 2, 2019 - 6:19am

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