Practical Agile Management — Value-Align your Strategic Planning capability

Remember the key aspect of a strategic plan is that it should be an ongoing process, which means this aligns very clearly with the tenants of lean-agile, which is to continuously inspect and adapt.

However, the most common advice on strategic plans is that they should provide a vision for the next three to five years. From an agile perspective, three to five years is an eternity given we commonly work in short iterative sprints aligned with quarterly planning. So, the question is how do you align frequent and fast delivery to longer-term strategic plans?

There are two primary things you need to do to update the strategic planning process to support both your long-term goals and objectives and your fast-paced delivery capabilities with Agile:

1. Establish outcomes that will be associated with your strategic plan. Align outcomes across the span of the plan so that you have short and long-term goals and objectives.

2. Leverage the QValue scoring model to quantity short-term outcomes aligned to the strategic plan via value factors identified in the QValue model.

Let’s look at areal-world strategic plan and translate that into the QValue scoring model, which when implemented will provide operational agility with respect to strategic planning.

Walmart — Strategic Plan:

Walmart’s strategic plan centers on delivering everyday low prices to customers while also investing in new technologies to enhance the customer experience. The company is also focused on expanding its online business and leveraging its vast network of stores to offer new services like curbside pickup and same-day delivery.

To start the process of updating our strategic planning operational model, we will develop the QValue scoring model. To start we will deconstruct the strategy to identify value factors that will provide value scoring for initiatives and projects that we will deliver in support of the strategic plan. It is important to develop quantitative value factors as that ensures during our quarterly planning, we are aligning outcomes to the longer-term strategic plan.

Let’s take Walmart’s strategic plan as an example of how to develop the QValue strategic scoring model. Their strategy centers on delivering everyday low prices to customers while also investing in new technologies to enhance the customer experience. The company is also focused on expanding its online business and leveraging its vast network of stores to offer new services like curbside pickup and same-day delivery.

Let’s extract the strategic outcomes from Walmart’s strategic plan:

These are the things that Walmart wants to focus on so that it can continue to deliver on its corporate mission, each of these strategies must then be translated into specific activities and efforts that will deliver quantifiable value.

The next step in developing the QValue scoring model is to translate strategies into value factors, which would look something like this:

Now that you have identified your strategic focus, which identified areas where we believe the investment is warranted to create and deliver value for our customers and business. The items on the right that designate our strategic focus will become our value factor quantifiers.

A key aspect of the QValue model is that we want to limit the number of value factors to no more than six (6). Keeping the quantifiers small ensures that our strategic focus is clear. We do this because if you have too many value factors, then almost everything will end up being approved because the difference in value scoring will be minimal at best. The purpose of QValue is to create separation between ideas that fill a backlog and those that deliver value.

At one organization where the QValue model was developed, the organization developed their own scoring model that consisted of fifteen (15) different value factors and their comment during the development of their model was that essentially everything that was presented for scoring ended up being approved because the scoring model provided little direction regarding value. QValue solves that problem by focusing on the key drivers of value and using those to quantify them. We will talk about how to scale this across larger organizations in our scaling focus chapter.

With the value factors identified the next step is to develop quantifiable outcomes for each value score range. The QValue model relies on four potential value outcomes, starting with 1 and moving to the highest outcome-aligned score of 4. Again, we keep the range of value scores small so that we aren’t splitting hairs on outcomes, each value factor score is aligned to an outcome range, and which are tied to the baseline metrics of that value factor score. For example, if the goal is to improve your NPS score and the baseline NPS score is 80%, then each of the value factor columns would be associated with a range of improvements, like this:

With all of the value factors and quantifiable outcomes identified, you now have a value-scoring model that can be used across the organization providing a way to score large and small initiatives.

One of the biggest challenges we have when we decide to invest in large multi-year transformation efforts is that we assume that we won’t realize any value until the very end. This approach is wrong in its thinking because you are essentially making a Las Vegas-style bet that the initiative will yield the results you expected at the very beginning, when you admittedly know the least about your investment, you have no history to review for value. QValue provides the mechanism to quantify the expected outcomes of incremental work.

If you would like to learn more about QValue and how you can develop it for your organization or about the Practical Agile Management approach to integrating agility into your business operational capabilities contact me at — michael@soundagile.com