Agile Strategic Planning
Agile Strategic Planning
Is there a compelling in your organization to change to an agile strategic planning approach?
Failures in Strategic Planning
Various studies outline a myriad of reasons for strategic planning failures. Surveys results suggest:
- Most executive teams spend less than one hour per month discussing strategy
- Few employees understand their company’s strategy
- Most companies do not link compensation to strategies
- Few companies have effective strategic execution systems
Frustration Even in Well Run Organizations
When you look closely at the top long-term performing companies in any industry, you find outstanding strategic management systems (ability to develop strategies, plans and implement those). However, the frustration level with strategic planning processes, regardless of the strategic planning maturity of the company, is high. Eric D. Beinhocker & Sarah Kaplan report in McKinsey Quarterly:
Senior executives generally agree that crafting strategy is one of the most important parts of their job. As a result, most companies invest significant time and effort in a formal, annual strategic-planning process that typically culminates in a series of business unit and corporate strategy reviews with the CEO and the top management team. Yet the extraordinary reality is that few executives think this time-consuming process pays off, and many CEOs complain that their strategic-planning process yields few new ideas and is often fraught with politics.
Why the mismatch between effort and result? Some claim that the annual strategy review frequently amounts to little more than a stage on which business unit leaders present warmed-over updates of last year’s presentations, take few risks in broaching new ideas, and strive above all to avoid embarrassment… One executive told us. “There is a lot of dancing, waving of feathers, and beating of drums. No one is exactly sure why we do it, but there is an almost mystical hope that something good will come out of it.”
Why has strategic planning become in too many cases become so bureaucratic, inflexible, and unproductive? Could an agile strategic planning approach be of help to your organization?
Similarities Between Strategic Planning and Software Development
There are considerable similarities between software development and strategic planning. Opportunities for breakthrough improvements in both worlds are enormous. Both require a vision of the future, however, the specifics of how to exactly achieve the vision are generally fuzzy. Both processes require inordinate amounts of time in planning, communicating and achieving buy-in.
Software Development Failures
The failure rates of software projects are high. A Standish group reported that:
- 9% of their projects come in on time and on budget
- 52.7% of projects will cost 189% of their original estimates.
- 30% of software projects are so poorly executed that they are canceled before completion
- According to Info-Tech Research Group, only 11% of business organizations consider technology a “strategic weapon”
- According to National Institute of Standards and Technology, software defects cost nearly $60 billion annually; 80% of development costs involve identifying and correcting defects
- Projects completed by the largest American companies have only approximately 42% of the originally proposed features and functions
Why do Software Development Projects Fail?
The reasons that IT projects struggle according to survey results reported by Standish group include:
- Lack of User Inputs
- Incomplete Requirements & Specifications
- Changing Requirements & Specifications
- Lack of Executive Support
Best Practice in Software Development
IBM reports that the top best practice in software development is:
Development process – It is important to choose the appropriate development lifecycle process to the project at hand because all other activities are derived from the process. For most modern software development projects, some kind of spiral-based methodology is used over a waterfall process…
Agile development encompasses the different spiral-based development methods. According to several surveys over the last nine years, Agile has led to higher software productivity improvement, cost reductions, and reduced development time-frames. Moreover, the claimed adoption rate of agile development rates is high. The question today isn’t do agile methods work, but rather what are agile best practices and how do we apply them effectively?
So what is agile, and how could agile strategic planning help you?
What is Agile?
IBM describes agile development as:
a collaborative, incremental,
and iterative approach to software development that can produce
high-quality software in a cost effective and timely manner. Unlike
traditional software development, agile development emphasizes
flexibility, continuous testing and integration, and rapid delivery of
functionality.
Agile practices include:
- Simplicity
- Constant cooperation between business people and developers
- Customer collaboration over contract negotiation
- Recognize that you have a wide range of stakeholders
- Turn stakeholders into developers
- Adopt stakeholder terminology
- Individuals and interactions over processes and tools
- Working software over comprehensive documentation
- Model storm details just in time (JIT)
- Treat requirements like a prioritized stack
- Responding to change over following a plan
- Working software delivered frequently to customers
- Create platform independent requirements to a point
- Smaller is better
- Keep it fun
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