The five-year business plan is rapidly becoming a dinosaur. Instead, companies of all sizes are prioritizing agility and rapid course correction in strategic planning. For this reason, many are beginning to use agile methodology—the gold standard for rapid software development—in their strategic planning processes.
“Strategic planning used to happen annually with months of ramp-up,” says Russ Finney, lecturer at the McCombs School of Business and an advisory partner with itmWEB Group, a strategic planning consultancy. “But if you’re growing fast and adapting to new competitors and customer expectations, you’re doing it every month. You’re constantly reevaluating, rethinking, and executing.”
In a recent conversation with Workflow, Finney explained how (and why) some companies are ready for a new approach.
What is agile strategic planning and how does it differ from traditional methods?
Becoming strategically agile boils down to replacing an organization’s intermittent, formal planning processes—which traditionally require many layers of review and approval—with a more frequent and informal series of meetings among small groups of stakeholders who are empowered to make strategic decisions faster.
A traditional planning process is rigid and usually happens once a year. An agile process is flowing and impactful, and generally gets repeated monthly or quarterly.
Practitioners of agile thinking are seeing traditional planning evolve into a continual, iterative process that generates a flow of potential initiatives. These undergo accelerated review, then prioritization and implementation.
How can companies get started with agile-based planning?
First, as with any strategic planning, you need to have a good, enterprise-wide understanding of the business mission and values. With that as a springboard, companies then create a faster planning cadence than in legacy planning frameworks.
A second rule of thumb is having the right stakeholders in the process, ideally the smallest group necessary so they can be nimble and not get bogged down in endless layers of review and approvals. You need a group that’s empowered to move resources against problems. That tends to depend on the size of the company. If the company is huge, then the correct group might be found at a divisional level. If it’s a midsized or smaller firm, the C-suite tends to control it all.
When you’re trying to transform quickly, you can’t do it with long-term, multi-year planning. You need to do it in sprints.
Third, you need to have an agile process to manage, document, and control the flow of information for each initiative. This can follow agile best practices, including breaking the process into smaller tasks with achievable, measurable outcomes, prioritizing what gets done first, enabling rapid review and buy-in from leadership, and fast-tracking implementation. Someone in the C-suite is usually responsible for shepherding the process and removing obstacles, not unlike how a Scrum master would in Agile DevOps.
Companies should also have a governance process in place to monitor the planning progress, modify it based on any unexpected changes, and revalidate the thinking.
One of the hallmarks of agile is a daily feedback loop. Is that level of communication necessary in agile strategic planning?
I’ve never seen daily standups in a strategic planning process. A strategic sprint tends to be a bit longer than a project development sprint, which could be every week or two weeks. The strategic process would probably be a month on the short end. But at the end, would you do a retrospective? Absolutely. When people come back into a governance meeting, they’re talking about what went right, what went wrong, what needs to be adjusted.
How widespread is agile strategic planning today?
I see it a lot in midsized businesses that are upping their game, and I’m seeing it more frequently in manufacturing. I just worked with one of the oldest manufacturers of industrial equipment, and their C-suite team has adopted an agile mindset.
Agile strategic planning is becoming muscle memory for a lot of organizations because that’s just how we’re doing things now. When you’re trying to transform quickly, you need sprints.