More and more, there is a case being made for scaling agile in the enterprise. But before you jump on the scaling agile train, it’s important to think about everything that goes on above the portfolio layer, and to ask how these enterprise-level priorities change in an agile world. 

What’s new and what’s changed in SAFe 5.0

What does it mean to have an “agile” strategic planning process?

Planning above the portfolio level is central to a business’s ability to adequately respond to change. In other words, higher-level planning must evolve before business agility can be achieved. In fact, Scaled Agile Framework (SAFe) continues to evolve its approach to addressing enterprise scaled agile, which indicates that enterprise agile is here to stay. 

We can’t emphasize this enough: the most important component of agile success is strategic planning. And all strategic planning is not created equal. Here, we’ll take a look at the pitfalls of the traditional strategic planning process and how the agile version creates opportunities for modern organizations to execute as efficiently as possible and confidently meet corporate goals.

How traditional strategic planning falls short

Business-as-usual strategic planning typically includes a one-, three-, or five-year plan, with budgeting reviewed annually. There are three basic problems with this approach: 

Matching capacity to demand is costly and inaccurate

As a company moves through their budget planning process, executives put together their “wish list,” or projects they aim to tackle during the following year(s). But as you’ve probably experienced first-hand at one point or another, more projects are scoped than can realistically be completed. 

Each year, these newly funded projects must be supported, yet organizations’ resources are often incredibly restricted, meaning matching capacity to demand can be challenging. Cue the collective groans of development leaders tasked with “making the impossible possible” with finite resources and priorities that are subject to change.

These constraints and complexities make it difficult to come up with a reasonable projection of resource supply and demand against deliverables, resulting in a lack of confidence in the team’s ability to carry out the plan – no matter how good it is.

Budget allocation is excessive, which leads to irresponsible spending

The unrealistic scope mentioned earlier often leads to unused budget dollars from funded projects left uncompleted. This “extra” budget inevitably leads to an end-of-year scramble, as unspent funding can affect the next year’s budget allocations. We’ve all seen this happen. And we’ve all seen the most common solution: “Spend the money!” To prove to executives that the funding is necessary for the upcoming year, the remaining budget is spent on unnecessary items, rather than given back to the company.

Inflexibility makes it impossible to make quick investment decisions

Traditional strategic planning not only lacks a fluid, ongoing review of a projects’ relevance to a particular initiative, but also hinders your ability to change course without hitting major roadblocks. If, for instance, certain projects no longer make sense as the year nears its end, one of two things typically happens: you make a change or you maintain status quo.

If your team does, in fact, decide to pivot, and a change order is completed, you may be faced with high overhead, hassle, resource shifting, and the risk of losing budget the following year.

If you take the alternative approach and simply carry out the project just to avoid the hassle and other risks involved in making a late-stage change, the project you power through simply may not make sense based on the initiative at hand.

Neither scenario benefits the organization or its stakeholders.

Enterprise agility saves the day

Agile portfolio planning at scale means strategy is defined by the enterprise, and decisions on how much to invest are motivated by value measurement as projects are completed and products are steadily released. Teams complete work that strategically makes sense for the company on an ongoing basis, and resources are allocated according to what is paying off as expected, and what isn’t.

Given the complexities of resource allocation within the traditional framework of strategic planning, agile strategic planning shifts the focus to funding the value stream and executing projects from there. Put differently, agile strategic planning takes the overhead out of constantly having to refactor capacity/resource management, simplifying the process and empowering the portfolio level in decision-making. 

It also brings the lean portfolio management mindset to projects where it is required and allowed to build, measure, learn, and strategically pivot if necessary. This typically happens at two levels of cadence.

  • Planning cadence: 3 months/quarterly The length of each iterative cycle is typically three months, which is enough to create a long-term plan against initiatives that take six to 12 months to build out.
  •  Scaled agile planning: 12-18 months Scaled agile planning is a rolling annual planning process, comprising four to six program increments (each program increment is typically three months long, aligning with fiscal quarters), and each program increment is planned one at a time. This lends visibility to the strategic direction that should be achieved 12 to 18 months out. Near-term program increments are well defined, and medium- and long-term less so. 

With adaptability top of mind, the agile strategic planning process promotes flexibility and revisits long-term plans every three months to validate priorities and confirm that work to be completed in upcoming program increments is still the highest priority for the organization and aligned with the strategy.

There are regular opportunities to make adjustments to the nine to 12–month plan based on game-changers and lessons learned. Simply put, agile strategic planning boils down to funded value streams combined with a rolling long-term annual plan.

Why agile strategic planning is better for your whole team

Agile strategic planning empowers and encourages portfolio managers to decide for themselves which projects they work on, so long as there is regular communication with executives to make sure the organization is on track and in alignment. 

Imagine a monthly check-in where the conversation doesn’t stall in the “Where are we on this project?” phase, but instead moves forward to more meaningful questions, like “How much value have we captured so far?” If you’ve captured 80 percent of the value and only spent 50 percent of the budget, it’s worth considering whether you should stop there and go for something with a higher value-to-effort ratio. 

Strategic planning executed with an agile mindset can yield a transformational shift in an organization committed to scaling agile. Then, and only then, will you see improved operational effectiveness through the continuous alignment of business and technology teams.

Ready to take strategic planning to the next level? Atlassian’s enterprise agile planning platform, Jira Align, can help. Visit atlassian.com/align to learn more.

Strategic planning, the agile way