Why Your Annual Operating Plan Is A Lie and What To Do About It

WHERE THE PLAN GOES WRONG

  • Projects that you targeted did not start when you planned.
  • Unplanned events, outages, and work eat at the money you planned to invest in a new value.
  • Projects you started in prior years do not finish on time, and an ever-increasing body of work carries into the new year. Since this work is already committed, it erodes the amount of money and effort that can be applied to new, high-value products and features.
  • You are met with a barrage of requests-large and small-from your customers, and their need outstrips your capacity to deliver. It’s difficult to prioritize these requests because there is no consistent definition of value, and nobody believes the business cases anyway.
  • At some point, one or more frustrated customers will come to you with a pile of cash to execute their latest priority. But being given funds doesn’t magically make skilled, trained, and experienced resources appear to do the work. Inevitably you move around the same people who always get the job done, leading to more things being started but not finished.
  • You are given unfunded mandates related to risk, compliance, and cyber security.

HOW DID WE GET HERE?

This sounds like a terrible fate. Unfortunately, it’s a fate that many companies struggle with every year.

  • Everyone agrees on priorities
  • A year is defined by a set of projects
  • The projects can be planned in detail
  • The full scope of each project can be delivered on time
  • The business will not change what it wants over the course of the year
  • People can be moved around to address gaps
  • People can be added on demand when funding becomes available

WHAT DO WE DO ABOUT IT?

First, it is necessary to believe that a year is not defined by a list of projects but rather by an Investment Strategy: an organization of stable, cross-functional teams with aligned value, funded for reasonable intervals against strategic objectives.

  • Are we growing our most important markets?
  • Do we understand our customers and their problems?
  • Can we provide solutions to those problems?
  • Do we have effective designs for those solutions?
  • Can we deliver those solutions?
  • Are there feedback loops all along the way to listen and respond?

ESSENTIALS FOR AGILITY: TEAMS, BACKLOGS, AND WORKING TESTED PRODUCT

At LeadingAgile, we have distilled the concepts of agility down to the very essentials: Teams, Backlogs, and Working Tested Product. The fundamental unit of agility is a stable, cross-functional Team that has everything it needs to deliver. Backlogs provide clarity on what the team needs to accomplish so that it is always working on the most important things. A high-performing team with a clear backlog can frequently deliver Working, Tested Product.

IMPLEMENTING YOUR INVESTMENT STRATEGY & INVESTMENT TEAM

This is where the investment strategy comes to play. When we are mature enough in this system, we can fund it based on products and not projects. Fundamental to this is creating an Investment Team (larger organizations may have more than one).

  • Implementing OKRs at the top level of the organization to establish business goals and outcomes rather than solutions and outputs to drive the conversations.​
  • Establishing a capability-based foundation for knowledge, decisions, and feedback.​
  • Utilizing asset allocation mix strategies to respond to market demands and achieve business outcomes.

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The Path to Agile Transformation Starts Here | www.leadingagile.com

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LeadingAgile

LeadingAgile

The Path to Agile Transformation Starts Here | www.leadingagile.com