Agile Strategic Planning | Resources and Methodology

December 27, 2018

Our firm helps organizations move and execute faster based on market changes. We set upon creating a new agile strategic planning methodology based on these principles. Our goal is simple; make strategy actionable, accountable and measurable.

Ever since merging the principles of agile and strategic planning, we’ve received a lot of interest in the methodology. We’ve decided to share our method and contribute to the body of open source knowledge. Please find below detailed information on the methodology.

Part One: What is Agile Strategic Planning?

Make your company epic: using agile strategic planning for competitive advantage

The pace of change is accelerating rapidly, and this tectonic shift cannot be ignored. For organizations, this means that the market and competitors move increasingly faster. The key to counter this pace of change is to move faster than they are; thus, organizations must become much more agile to the world & their customers.

Ninety percent of executives in a recent survey by the Economist believe that organizational agility is critical for business success. One-half of all chief executive officers (CEOs) and chief information officers (CIOs) polled agree that rapid decision-making and execution are not only important, but essential to a company’s competitive standing.

This begs the question: how does one achieve business agility? We believe the answer starts right at the very top, with strategic planning.

Agility meets strategy

Agile has become the norm in software development as most technology organizations by now have understood the benefit of employing this model. We strongly believe that an agile method should also be applied to management & strategy. So we have drawn upon the operating system for technology organizations and applied it to strategic planning. The goal is to achieve maximum velocity within your organization.

Quarterly planning is replaced by monthly sprints, ensuring that progress is tracked more closely and that each team can course correct in real time. By bypassing traditional waterfall decision making, this methodology ensures that organizations can move faster, fail at smaller scales and execute on what matters most. Most importantly, this method provides visibility on the velocity of execution.

Bridging the gap between strategy and execution

Traditional strategic planning processes were very useful in helping company leaders understand where they needed to go. And while this understanding will always remain relevant, the largest hurdle to success is the inability to link strategy to execution. Pretty PowerPoint slides confer a feeling of “being done”, but ultimately mean little if you can’t actually get things done. The goal of agile strategic planning therefore is not only to help you understand what the ideal end-state of your organization is, but also to create an adaptive path to get there.

Understanding agile strategic planning

The agile strategic planning method is broken into a specific formula that anyone can apply within their company.

Company Epics: description of the desired state of your organization by the end of the planning period from a strategy perspective.
Market Landscape: insightful discussions about your industry. You should discuss opportunities and threats your company needs to be prepared for.
Introspection: Deep dive into everything that is internal to the business, from financial capabilities to brand promise and values. This also includes an understanding of yearly revenue and profit goals. In addition, your purpose, brand promise, unique selling proposition and bhag are written down.
Creation of Backlog: A reverse engineering what needs to be done to optimize your chances of realizing your epics. The rules are simple: backlog items must be achievable in one sprint, and must apply the smart principle. The backlog engenders difficult conversations because the what is clear but the how is a different story. Strategy is not only a choice of what to do but also a choice of what not to do.
Sprint Planning: sprints are timeboxed effort containers (generally one month), during which each team member will voluntarily commit to accomplishing a set number of backlog items. Track your velocity as a team, learn from past mistakes, get better, repeat.
Monthly Sprint Reviews: sit down (or stand) with your management team to validate progress and course correct.

Agile strategic planning is one method that can lead to business improvement by aligning and empowering the team, by deploying the right resources and by being adaptable enough to allow faster decision making and execution. However, before applying any methodology, it is critical to understand its roots and evolution across time.

An History of Business Agility

By itself there is nothing new to the concept of agility. Different kinds of organizations has been adapting to internal and external forces for centuries. However, in any field, there is a formalization of practice to theory and then a larger diffusion of knowledge that makes the theory and practice more widespread.

History/roots in software dev
- IBM 1957
- 1990 push RAD, Scrum, XP,
- 2001 Agile software manifesto
- Continuous development afterwards
- From software to business

The Agile Manifesto

Individuals and Interactions more than processes and tools
- Self-organization and motivation are important, as are interactions like co-location and pair programming.
Working Software more than comprehensive documentation
- Working software is more useful and welcome than just presenting documents to clients in meetings.
Customer Collaboration more than contract negotiation
- Requirements cannot be fully collected at the beginning of the software development cycle, therefore continuous customer or stakeholder involvement is very important.
Responding to Change more than following a plan
- Agile software development methods are focused on quick responses to change and continuous development.

Agile software development principles – The Manifesto for Agile Software Development is based on twelve principles:
- Customer satisfaction by early and continuous delivery of valuable software
- Welcome changing requirements, even in late development
- Working software is delivered frequently (weeks rather than months)
- Close, daily cooperation between business people and developers
- Projects are built around motivated individuals, who should be trusted
- Face-to-face conversation is the best form of communication (co-location)
- Working software is the primary measure of progress
- Sustainable development, able to maintain a constant pace
- Continuous attention to technical excellence and good design
- Simplicity—the art of maximizing the amount of work not done—is essential
- Best architectures, requirements, and designs emerge from self-organizing teams
- Regularly, the team reflects on how to become more effective, and adjusts accordingly

Speed and trust

The real recipe for success in any-sized organization is its agility to effectively respond to its market and to its customer. You need to align your team, deploy the right resources and technology; this should start with tough decisions. Agile strategic planning is not a panacea and will not miraculously improve your strategy. It will, however, give you an adaptable method that can empower your team to find the right path.

Part Two: Preparing for the Offsite

This section explains how to run through the Agile Strategic Planning platform.

Gather your team

Close Facebook. Shut off Slack. It’s time to get serious. Gather your team over a one or two day offsite session and invite everyone to log into the platform.

Company Epics

Describe the desired state of your organisation by the end of the planning period from a strategy perspective.

Market Landscape

Generate insightful discussions about your industry. You should discuss opportunities and threats your company needs to be prepared for.

Introspection

Dive into everything that is internal to the business, from financial capabilities to brand promise and values.

Creation of backlog

Reverse engineer what needs to be done to optimize your chances of realizing your epics. The rules are simple: Backlog items must be achievable in one sprint, and must apply the S.M.A.R.T principle.

Item prioritization (1 to 5)
Item effort weight (exponential scale 1 to 13)

Sprint Planning

Sprints are timeboxed effort containers (generally one month) for which each team member will voluntarily commit to accomplishing a set number of backlog items.

Track your velocity as a team, learn from past mistakes, get better, repeat.

Part Three: Offsite Session

What to expect during your session

The purpose of the offsite is to prepare a strategic plan. The day will be focused on aligning your entire team around a plan that you can execute over the coming 12 months.

Here is some additional information on what to expect during the day.

Getting the team together

We will be working in PNR’s platform (available here) – look out for an email invitation to join your company account.
The platform is very user-friendly, but don’t worry, one of the PNR team members will moderate the day’s session anyways.

Choosing potential objectives/goals to achieve during the year (Candidate Epics)

At this point, we are brainstorming your objectives and will end up with a list of 5-20 objectives; at this stage, the more, the better.
Examples of Epics: Create a product team, Transition to a SaaS model, Open an office in New York, etc.
The idea is to stay high level with objectives that will take the whole year to achieve and to avoid listing short-term projects. If several projects help you achieve one broad objective, list the latter.

Discussion on the Market Landscape (your company’s threats and opportunities)

We will create a list of threats that are external to your company and that may put you at risk in the coming year (examples include: a change in legislation, new competitors entering your market, suppliers no longer supporting you).
We will also create a list of opportunities that you can capitalize on in the coming year (examples include: new consumer segments and new technologies that you can leverage).

Organizational Introspection

The purpose is to realign the team on major goals and to reveal the tools at your disposal to achieve your long term vision.
We will be discussing your Yearly Revenue, Yearly Profit, Dividends and Cash on Hand objectives.
We will also list your company values, purpose, BHAG (10-year goal) and your USP (unique selling proposition).

Finalizing the Objectives (Final Epics)

Now that we have identified potential objectives and taken into account our threats, opportunities and goals, we can finalize the objectives we want to achieve for the year.
We go back to the original list of 5-20 objectives and narrow it down to the top 3 to 5 that we can realistically achieve and rank them in order of priority. This step is important because when running out of time and resources, you should always focus on completing tasks related to your most important objectives.

Creating Tasks, assigning Effort and Prioritizing

This portion will take approximately half a day and here is what to expect for each portion of it. We will be essentially deconstructing what needs to be done to optimize your chances of realizing your 3 to 5 epics into smaller steps.

Creating the Task list (Backlog Creation)

We will create the task list for every epic. Don’t worry about when an item needs to be done – it is enough to know that it needs to be achieved in the next year.
All the items we create have to be achievable within one sprint (approximately one month), so we often create multiple tasks for a single, large project. For example, launching a new website takes longer than a month, so we will create multiple tasks as follows:
- Choose agency for website development;
- Design the website;
- Code, test and launch the website;
- Prepare and launch a marketing campaign for the new website.
All tasks must apply the S.M.A.R.T principle (Specific, Measurable, Assignable, Realistic, Time-Bound); in other words, write them out clearly so that everyone can remember what the task is a few months down the line.
Don’t worry about coming out with the list for the full year; the process we are going through is iterative: we will review this list every month and, as things evolve in your organization, we can either remove items that are no longer relevant, or add other ones.
Don’t add any items that are part of regular operations. For example:
- Good backlog item: Set up a formal process to share info between marketing and sales;
- Bad backlog item: have a bi-weekly meeting between sales and marketing (this is not a good backlog item because this task can never be completed – it is an ongoing activity).

Determining the Effort of each Backlog item (Weight Voting)

This session will have us voting on the effort required to complete a task.
A few things you need to know:
- Everyone votes on their own laptop or tablet so that we don’t influence each other.
- Once all the votes are in, one of two things will happen:
  - We are all somewhat in agreement on the effort of a task: the vote passes and we vote for the next item;
  - We have wildly diverging opinions on the effort required to complete a task; then the platform will stop us and ask us to discuss as a group so that we may reach a consensus;
- Voting is on an exponential scale of 2 to 13, following the Fibonacci sequence because humans tend to exponentially underestimate the actual effort required for larger tasks. A task that is rated a 2 is quick to execute and simple; a task that is ranked a 13 is complex and time-consuming (but still under a sprint!).

Determining the priority of each Backlog item (Priority Voting)

This session will typically have the CEO or the most senior person in the room determining the priority of each item – it is still important for the team to discuss the priority of items if they disagree with their CEO.

Part Four: Guide to Writing Strategic Epics and SMART Backlog Items

Sometimes it’s hard to differentiate between strategic and operational goals.

That’s a common question during strategic planning sessions because they are different for each company and can even transform from strategic to operational over time depending on the stage and maturity of the business. Here are a few tips on how to differentiate both and make the most of your strategic planning session:

STRATEGIC	OPERATIONAL
Strategic goals focus on transforming the business.	Operational goals focus on running the business.
Questions you are asking yourself when thinking about strategic goals: Where do we want to go with this business? What can strengthen our positioning? What are the problems we are trying to solve and how will we do that better than anyone else? What are the strengths or weaknesses we need to work on? How must our business look, act, and feel like in order for it to compete successfully in the changing markets?	Generating income, along with all of the operational, financial, and management tasks that will support that are operational goals. They include interacting with customers, manufacturing your product, delivering your service, preparing and reviewing financial reports, keeping your facilities functional, training and supporting employees, and more.
These goals affect the company as a whole to survive and grow in its industry, market or customer base. They’re above and beyond what each department needs to deliver on a day-to-day basis. Think about strategic goals as new actions to take that influence the direction of the company.	These goals usually belong to a specific department and are set and reviewed every year. Think about operational goals as optimizations or improvements on actions already implemented and processized.

Guide to writing SMART backlog items

Not sure about your backlog items and would like some guidance? Don’t sweat, here’s some tips on how to write SMART backlog items. First, let’s start with an example:

Specific – Consider who, what, when, where, why and how in developing the goal.	Original: Provide a good service to customers What’s wrong with it? It’s not very clear about what service we are talking about and how we are going t0o do this. Are we targeting the customer support team and their time to respond to requests or store staff NPS scores, or number of complaints on social media platforms.
Measurable – Include a numeric or descriptive measurement.	Better: Reduce complaints in stores by matching our competitors product purchase and return policies. What’s wrong with it? We can’t tell how much it has to improve by and therefore won’t be able to strive towards achieving it.
Achievable – Consider the resources needed and set a realistic goal.	Better: Reduce complaints in stores by 50% by matching our competitors product purchase and return policies. What’s wrong with it? Well we are not sure if this is reasonable. Our complaints levels are high and we need serious changes in our customer service approach that will take time and a lot of resources before seeing results.
Relevant – Make sure the goal is consistent with the mission.	Better: Reduce complaints in stores by 10% by matching our competitors product purchase and return policies. What’s wrong with it? It has to be aligned with our company’s overarching objectives. Is this where we need to focus on this year and does it move the needle and support our strategy. If we believe that customer service is number one, then matching our competitors is not enough.
Time-bound – Set a realistic deadline.	Better: Reduce complaints in stores by 10% by providing better purchase and return policies than our competitors. What’s wrong with it? We don’t know when this needs to be done. It needs to be time-boxed to have an impact on the team and allow them to distribute the effort needed over a period.
SMART	Final: By the end of the year, we will reduce complaints in stores by 10% by providing better purchase and return policies than our competitors.

SMART checklist :

When reading your item, can you imagine how it looks like when it’s done? Does everyone understand the final result the same way?

Can you easily tell if it’s done or not done? Would someone else be able to tell that it’s complete?

Are there available resources to achieve the item? Are there any time or money constraints that need to be considered?

Do you understand the impact of this item on the business objective? Is it a priority?

Do you know when this needs to be done by? Is there a deadline?

And some more examples of SMART backlog items:

Increase our active members online registrations by 25% through better incentives and marketing tactics by Q3.

Reduce our product manufacturing costs 5% by implementing better processes by March 2019.

Open 2 new concept stores in Montreal this month.

Part Five: Moderator Guide for the Sprints

This is a guide for moderators during the sprints

General Session Information

Recommended Duration: +/- 1 hour

Recommended Location: Conference room

Before the Sprint Review

Make sure all participants are invited to the platform.
To close a Sprint, on the top right, at the left of your name, click on the gear icon and then on “End Now”.

During the Sprint Review

Lobby

Click on “I’ll Moderate”.
Make sure all participants are connected to the platform (Green dot on their profile).
Click on “Start Now” at the top of the page when you are ready.

Confirm Items from the last sprint

One team member at a time, go over each action item and choose the proper state:
- Mark the item as completed if the owner can demonstrate it was really done; or
- Push the item to the next sprint if the item is still relevant; or
- Push the item to the backlog if the item is no longer relevant for the next sprint.

Parking Lot

Review each item in the parking lot; either:
- Delete if not relevant; or
- Leave as-is; or
- Assign them to an Epic if you want to add the item to the backlog.

Backlog Grooming

Go over each epic and ask yourself “what new information do we have which could have an impact on this objective” and make the necessary adjustments.
Make sure that all action items are still relevant and to be completed.
Add, delete or re-word backlog items according to the updated context of the company.

Set Weight

Discuss the effort of each new item (if any) and assign an effort to each item. Effort is ranked from 1 to 13, with 13 being the highest.
Now is also the time to change the effort of an existing item if new information has had an impact on the effort necessary to complete that item.

Assign Priority

Discuss the priority of each new item (if any) and assign a priority from 1 to 5, 1 being all “urgent & important” items.
Now is also the time to change the priority of an existing item if new information has had an impact on the priority of that item within the larger scope of the organisation.

Next Sprint Planning

Determine the planned end date and time of your sprint.
Assign backlog items to team members, on a voluntary basis to start with, then based on CEO’s judgment if there’s a conflict.
If this is not your first sprint, have a look at the last sprint velocity as well as your average velocity as a team, and try to improve. A team should constantly be pushing for increased execution velocity, while avoiding the pitfalls of overcommitment.
Start new sprint.

Part Six: End of Year Methodology

This one pager explains how to run through the End of Year process.

Gather your team

Close Facebook. Shut off Slack. It’s time to get serious. Gather your team over a one or two day offsite session and invite everyone to log into the platform.

Review last year – Sprint review

Discuss and close items that are fully completed. If not, the items will be pushed to next year.

Review last year – Confirm epics

Discuss and close epics that are fully completed. If not, it will be pushed to next year so that you can decide to include it or not in your next strategic plan.

Review last year – Financial review

Enter your financial results in order to compare your projections. Don’t wait on your official report, answer as best you can.

Review last year – Final overview

The year is now closed, take the time to analyse your performance in order to improve for next year.