Strategic programs and agile execution; can the divide be crossed?

November 26, 2019 Focus area: Digital Transformation , Strategic Flow

We came across research stating 67% of strategic programs fail to deliver as promised[1]. Over half of the top 10 reasons for lagging implementation point to a lack of alignment or understanding around common objectives. At BlinkLane we tend to look at this as a portfolio management issue first. Balancing scarce resources – time, people, budget – over multiple initiatives and effectively communicating these in itself is challenging. When such initiatives get the label of being strategic, more often than not they are perceived to be pushed top-down and ‘on top of’ the current business. This does little to engage your self-organizing, we-know-what’s-best-for-the-company (pun intended) agile teams and execution of the entire portfolio suffers because of it.

To be successful, your teams need to own your strategic direction. To connect strategy to execution, allow for iteration and in the process create something we call strategic flow. But think again if you feel the argument here is to curtail the autonomy of agile teams. Instead, it requires a break from the traditional strategic planning process from top to bottom. Methodologies such as OGSM (Objectives, Goals, Strategies and Measures) and OKR (Objectives Key Results) provide inspiration for such a different approach. Though in itself not new, we see wider spread adoption among organizations large and small that in recent years have built-up their agile team capabilities. And for good reason: OGSM and especially OKR's have the ability to motivate and guide relatively autonomous agile teams. Moreover, they help connect your less agile-infected units embark on a journey of short-cycled action as well.

The shortcomings of current solutions

Most organizations have already adopted agile delivery practices in their operating model. Some large companies will have scaled to form Tribes or Agile Release Trains (SAFe). Executed well, those steps already do much to improve time to market and decrease the portfolio orchestration need to get something done. Adopting agile portfolio management practices is a significant next step to improvement. But still, those give guidance for priority setting but fall short to properly address the issue of aspirational goal setting (see overview).

How strategic themes expressed as OKR’s complement other popular agile portfolio tools:

Supporting role of strategic themes in prioritization.png

And then there’s the tendency of strategic initiatives to upset the resource balance of the portfolio setup itself. Completely isolating people and budget from the existing business lines, project-style or as an incubator, in many cases is no longer an option or even desired. So instead, the strategic initiative needs to be integrated into your current business portfolio. But in the form of a multiyear-long program with little context or regard for organization and team dynamics, a large part of the organization is bound to resist. ‘Strategy’ with its not-to-be-challenged multiyear budgets risks being treated as “somebody else’s problem”. The resulting lack of urgency (multi-year, right?) and silent opposition can severely limit execution speed, make it difficult to prioritize and subsequently validate, and therefore likely: costly.

Create continuous conversations around strategic objectives

Whatever definition of strategy you might have – and there are many –, it’s easy to agree it is aimed to achieve more favorable results than perpetuating the status quo. If only management cares, it will reduce your teams and its larger equivalents to ‘feature factories’. Motivation and creativity will be lagging. But we also caution the kind of ‘loose projectile’ teams that have become detached from the company’s broader strategic direction. Instead, teams at any level need to understand the intent behind what it is they’re tasked to do so they can be alert and come up with alternatives when needed. Depending on how you look at it, this will either diminish or elevate strategy and attention to results to a continued series of conversations between teams. To highlight one increasingly popular tool, the earlier mentioned OKR’s can provide context and complement prioritization methods. OKR’s force you to articulate your team objectives clearly and reduce any ambiguity about what you mean by adding a mix of key leading and lagging indicators (Key Results). As Christina Wodtke argues in her recommendable book Radical Focus; OKR’s work because they can cascade, and move up again. Cadenced with your ART’s or Tribes’ quarterly cycles and ultimately the budget cycle, they inspire to immediate action and create the beginning of a feedback loop. Combined, this creates the type of strategic alignment all across we see as a key starting point for strategic flow.

It’s not THAT simple…

The above continuous process appeals to a ‘keeping-options-open’ type strategy[3]. Strategy as a journey, where many incremental steps lead to almost continuous pivot or persevere decisions[4]. It’s probable not every strategic course-correction can be tackled by relying on a steady set of rituals that align your company objectives to execution. But as with emergency breaks in cars, pushing strategic initiatives down with great force usually comes at a high cost. More likely, taking the more agile approach to strategy with OKR’s decreases the chance of ending up in such a situation in the first place.

To end with, achieving true strategic flow through your portfolio from strategy definition to execution, more than the above is necessary. Lean budgeting principles need to take away the built-in rigidity of traditional budgeting concepts based on projects and programs. And we already discussed the necessity of a structured feedback loop from promise to proof, preferably through short-cycled agile teams, Tribes or ART’s. Last, the required transparency and thus vulnerability of people involved requires a fair bit of courage, too. So come prepared!

A quick recap:

  • strategy execution suffers from poor portfolio management
  • to cross the divide, companies that embraced agile to improve execution need to move it beyond the delivery-side of the organization
  • Introducing agile portfolio management is a significant next step
  • In addition, OGSM and OKR have the ability to connect the strategic planning routine with the more execution-oriented portfolio routine.
  • Facilitating continuous conversations all across the organization around strategic intent this way fosters ownership
  • The aligned autonomy created in the process fuels creativity
  • Combined, it allows your organization to take a more agile approach to strategy

This blog might raise as many questions as it tries to answer. And we have lots to share on this topic too. For instance, you will have noticed we used the word routine in the recap just above. We will use a next blog to describe how these fit into a total of 3 routines organizations will need to embrace strategic flow.

Please let us know what you’re interested in more and we will use it to guide our future posts.

References:

[1] Bridges Business Consultancy, 2016; Strategy Implementation

[2] Christina Wodtke, 2015; Radical Focus. Cucina Media, LLC

[3] Rita Gunther McGrath, 2013; The End of competitive advantage. Harvard Business School Press

[4] Eric Ries, 2011; The Lean Startup. Crown Publishing Group