Agile Strategy Management Recap
The corporate strategy is the reason behind the structure and the behavior of the corporation. The strategy comprises the corporate:
• Vision
• Mission
• Objectives
The corporate strategy is ongoing adapted to market condition by Strategic Initiatives that establish the WHY, the WHAT, the WHEN, the HOW, and the WHO concerned with sustaining, changing, and improving business procedures and infrastructure in support of the corporate strategy.
Strategic Initiative management uses the agile principles for handling teams, change, and continuously improved business quality (Figure 7.1).
A Strategic Initiative can be concerned with reaching many different objectives concerned with different business situations.
The corporate leaders provide the initial set of objectives in response to an identified need for change of business conditions. These objectives are an indication of what kind of business and stakeholders must be involved in the establishment and governance of Strategic Initiatives.
In order to establish a strategically aligned solution to be delivered through Strategic Initiatives, you deal with a multitude of stakeholders representing all the roles directly involved with development, implementation, quality management, usage, governance, etc. of the required solution as well as the not always visible stakeholders that potentially benefit or suffer from the Strategic Initiative and its solutions.
FIGURE 7.1
Agile strategy management process cycle.
When establishing a Strategic Initiative you make a serious effort to get to know all the stakeholders that are concerned, that is, to have a dialogue with key persons and organizations that potentially could benefit or suffer from it. This is especially true for the less visible and less obvious stakeholders such as unions, politicians, government, legal bodies, and potential competitive businesses and partners.
In several cases, leaving out potential stakeholders has led to the complete failure of the strategic effort.
7.2 AGILE TEAM BUILDING FOR STRATEGIC INITIATIVES
Agile team building is concerned with the establishment of the best possible organization to perform the Strategic Initiative and adapt it to changing situations and events:
• Selection of people to become key-stakeholders in the Strategic Initiative
• Establishment of the teams of people and the roles and responsibilities of the people in the teams
• Definition of the roles and responsibilities of the teams to perform the tasks required during the lifecycle of the Strategic Initiative
• Establishment of the physical and technological environment within which the chosen people can act and communicate in an optimal way
• Establishment of standards to be used for processes, documentation, and deliverables in order to manage the quality of work, deliverables, and final solution delivered by the teams
Team building is a way to generate synergy, that is, the teams are organized in such a way that the performance of any team is higher than the performance measured as the sum of the single team member’s performance.
Only if the chosen stakeholders feel that they contribute to something valuable can you keep them motivated. We keep this feeling alive by involving them in Strategic Initiative processes where they can and will contribute positively and visibly to the result.
7.2.1 Sponsor and Coach/Facilitator Roles
The Sponsor has knowledge about who the key-stakeholders might be and the Coach/Facilitator has knowledge and experience about how stakeholders can be treated and made happy.
7.2.2 Teams for Agile Strategic Initiative Governance and Management
The typical organization constructs involved with Strategic Initiatives from initial establishment to final implementation and governance are:
• A Project Office established in the line organization in support of all projects and programs in the corporation
• A Program Office established as an executive organization representing one or more governance teams
• Decision-making and executing teams established for the development and implementation of Strategic Initiative results under continuously changing conditions and risk.
The different types of teams have one set of capabilities in common (Figure 7.2).
FIGURE 7.2
Team Competences.
The different team constructs with which we have worked under Strategic Initiatives comprise:
• The Strategy Governance Team initiates a Strategic Initiative based on leadership decisions. It comprises the top level of Change Management, the top level PQA Team, and the Change Control Board.
• The Process Governance Team coaches one or more PQA Teams and is the second level of Change Management.
• The PQA Teams lead, manage, and plan activity in order to deliver agreed tangible and measurable results.
• The Workgroup Teams perform production and implementation of agreed solution components. They control the quality of delivered solution components. They report progress in the Project Management Information System that is supported by the Project Office. Problems, Risk Conditions, and Events are reported to the PQA Team that manages the Workgroup Team.
7.2.3 The “No Excuse for Failure” Principle
Your key-stakeholders are probably in high demand in many other activities and therefore they need to be informed of the importance of your Strategic Initiative in order for them to understand what benefits they can obtain from contributing to it.
Facing this stakeholder risk situation, your first response to the risk is to ensure that your Strategic Initiative complies with the “no excuse for failure principle”:
• You know why you need the key-stakeholder in your Strategic
Initiative and you have a list of arguments that show the value for this key-stakeholder to contribute to your project.
• You know which internal and external activity that will compete for key-stakeholders with your Strategic Initiative and you respect their importance as well.
• Because you are involving people with very different skills, experiences, and competences, you know that conflicting interests are inevitable. You have organizational elements and procedures in place to avoid conflicts becoming personal with a negative impact on the Strategic Initiative progress.
• By using professional coaching and facilitation, you ensure that conflicts only result in lateral thinking (out of the box) and synergy on workshops and during other types of teamwork,
• At any point in time teams and key-stakeholders have access to all pertinently needed and available resources and knowledge constrained only by accepted limits to their availability,
• You plan to ensure that all required resources to be involved in an activity are available and allocated to the activity before the activity is initiated with assignment of these resources,
• You do not initiate an activity if you know that any required resource is not available to be assigned to the activity.
You incur important risk by not complying with the “no excuse for failure” principle:
• Biased strategy focus because important knowledge or competence is left out initially might lead to development and implementation of solutions that do not comply with stakeholder needs—you will lose capital and time.
• Key-stakeholders might lose confidence in the Strategic Initiative because the not involved but required resources raise pertinent critiques of the chosen initiative scope and objectives—you will lose time and key-stakeholders might leave the initiative.
• If the involved resources do not have the competence to reach a conclusion about critical success factors and the way forward to an agreed solution, then the key-stakeholders waste time and lose confidence in (your) management.
• Important processes might be performed with interruptions because of lack of important resources, which leads to waste of time and bad results.
• The initial enthusiasm of the key-stakeholders can disappear very fast if you do not keep them motivated by immediately involving
• Important processes might be performed with interruptions because of lack of important resources, which leads to waste of time and bad results.
• The initial enthusiasm of the key-stakeholders can disappear very fast if you do not keep them motivated by immediately involving
• The initial enthusiasm of the key-stakeholders can disappear very fast if you do not keep them motivated by immediately involving them in pertinent Strategic Initiative activity, where they get a chance not only to prove their competences, but also to use this competency directly in cooperation with peer stakeholders.
• If the key-stakeholders lose interest in your Strategic Initiative, then the initiative might already have failed.
• If the key-stakeholders get into negative conflict with you or with each other while conducting the Strategic Initiative activity, the initiative is probably already doomed to fail.
• If some resources accuse other resources of failure, it creates stress and negative conflicts that are the reason for delays that could have been avoided by better selection of resources, better team building, and better working conditions.
7.3 STRATEGY PROCESS QUALITY ASSURANCE
In order to succeed with the solution delivery, the teams establish a complete set of plans that with the highest possible probability lead to solutions accepted by the stakeholders.
Planning and plan execution of Strategic Initiatives is not just Project Management, it is to an even higher degree Risk Management:
The objective of strategic initiatives is to reach FUTURE situations and conditions with high PROBALITY that will provide the IMPACT wanted by the involved stakeholders.
Strategic Initiatives are risk. They can fail or succeed. In order to optimize the chance or probability of success we apply risk management to the Strategic Initiatives. Project Management on its own will not do the job.
Risk Management performed efficiently can allow the teams involved with Strategic Initiatives to build plans that with higher probability achieve the solutions and results (the impact) demanded by the stakeholders.
In this respect, Strategic Initiative PQA is Risk Management and in the work that we have performed Risk Management is PQA.
Please remember that we are always faced with pertinent unknown unknowns and unknown knowns that are ready to surface at any point in time in the future of our Strategic Initiative.
Risk responses are always built into the plan. You respond to risk by adapting your plan to:
• Accommodate the best possible resources
• Utilize the best possible procedures, standards, and techniques
• Adapt the solution to be SMART (Specific, Measurable, Achievable, Realistic, Time bound)
• Ensure satisfactory funding by efficient stakeholder communication
PQA is the method for Strategic Initiative establishment and planning based on intensive teamwork in the PQA Teams with brainstorming that documents the agreed Strategic Initiative for implementation.
PQA is used to ensure the quality of the initial plans, but it is also used to ensure the quality of changed plans, especially in connection with PQA review workshops that are used to respond to risk and to adapt the plans to required changes decided by the Strategy Governance Team.
PQA ensures:
• Identification of the strategy sponsors and other key-stakeholders
• Establishment of the agreed strategy with detailed objectives,
Strategic Initiatives, teams and team organization, management, and communication that can ensure the success of the strategy under fast changing conditions and high risk
• Establishment of standards for processes and documentation that can answer the basic questions about:
• Where we are
• Where we want to go
• Why we want to go there
• How we want to go there
The answers are given in terms that can be easily interpreted and agreed to by all involved stakeholders:
• Implementation of the strategy with timely execution of decided strategic initiatives, timely measurement and approval of results and benefits, and efficient change management in support of strategy governance.
7.3.1 Other Strategy Quality Management Tools
PQA cannot ensure the quality of the entire strategy on its own. If you want to know where you are compared to where you want to be while executing a Strategic Initiative, you need procedures and tools other than PQA:
• Project and program tracking is based on a number of performance indicators that can tell you if an activity is delayed, if the project or program is delayed, and quite often if this delay is curable, that is, if changes to the baseline are needed.
• Analysis of information system requirements and solution design is a strong foundation for time and cost estimation. The developers and implementers of the solution can give you reliable feedback about solution quality progress related to usage of resources and funds that can be used for change management, where PQA comes back into the picture.
• Breaking the delivery down into manageable Work Packages based on easily verifiable use cases that are not started, in production, or delivered makes it possible to build Work Breakdown Structures (WBS) for agile solution development and implementation that ensure visible progress and fast and reliable reactions to change requests.
7.4 SOLUTION PROVIDER PROCUREMENT
This is an example of a relatively complex procurement of COTS systems and solution provider services that went well under specific conditions.
Procurement establishes a future required situation, in our case:
• New COTS systems delivered and implemented
• Solution provider service level agreements
• User training
• System operation
In order to succeed with procurement you need to manage the risks involved with this process. Some of the more important risks are:
• If you buy a COTS system before you have a detailed requirements specification, you will probably waste time and money because setup and implementation to fit your (unknown) needs will be a trial and error process until a feasible solution is established with very low probability of success.
• If none of the potentially available COTS systems can contribute to your Information Systems needs without major changes or additions to their functionality, you might get important cost increases and solution delivery delays. In this case, we do not talk about parameterization and setup changes, but about changes not supported by the delivered COTS functionality.
• A chosen COTS vendor always obtains a de facto monopoly once chosen and installed in your IT environment. You will be very weak in negotiations and might incur long lead times and high costs for adaptations in support of your business operations, especially facing business needs that are particular to your business if you do not foresee and include the conditions of these changes in the vendor contract.
• If the COTS vendor goes bankrupt or in other ways ceases to do business, you lose support of your COTS system and you might need to procure another one. This is the background for the escrow clause in the vendor contract. The escrow does not prevent you from losing money and time, but it might help you to protect your business information.
• If the chosen solution providers and the COTS vendors do not have enough competent resources to set up the COTS systems and integrate them into your IT environment, you will encounter big delays in implementation and increased cost that you cannot recover.
• The installation test performed by you and the COTS vendor is made on the COTS vendor’s contractual terms—you get what you see and that is all that the COTS vendor will guarantee. However, this does not rule out serious errors seen from your point of view that the vendor looks at in a different way. This can create conflicts, delays, and increased cost.
• If the best COTS solution does not use the same IT infrastructure that you have installed, the acquisition of this COTS system will require that you add to or change your IT infrastructure, which will add costs to not only new technology, but also the knowledge and organization necessary to run the new technology.
7.4.1 Procurement Lessons Learned
• If a project comprises many sub-projects and broad organizational involvement, you establish such a project as a program with a Strategy Governance Team and a competent Change Management Board. In our case, the vendors were invited to participate on the Change Control Board, which avoided all conflict.
• Do not procure anything without a good requirements specification.
• If you are faced with a monopolistic vendor and you have a weak service level agreement (SLA) seen from your point of view, you ensure access to competent knowledge on your side before you negotiate any further conditions with this vendor. If not, you risk losing even in court.
• Trust your partners only if this trust is based on a good contractual foundation (SLA). This is the best way to avoid litigation and complete program failure.
• Internally delivered Work Packages are agreed to in writing with the internal “solution provider” just like the external ones.
• Internal solution provider personnel prove their competence based on pertinent CV data just like the external ones.
• Demand weekly tracking of progress from both internal and external
• Internal solution provider personnel prove their competence based on pertinent CV data just like the external ones.
• Demand weekly tracking of progress from both internal and external
• Demand weekly tracking of progress from both internal and external
Workgroups based on reliable WBS and estimations of time to complete (cost tracking is not an issue because delivery is on fixed price).
• Use a project management COTS system in support of WBS registration, planning, and tracking.
• Any program and project is risk and has to be governed by risk management (PQA) in order to ensure efficient risk response.
• Risk originates from solution, process, and organization elements, and risk response encompasses management of the quality of these elements.
• Do not be afraid of doing what no one has done before if this is the way you can respond to your risk situation.
• Things are never so urgent that you do not have time to do what has to be done right.
• Make sure that all victories are victories for all involved parties.
• Get the key-stakeholders activated even though they claim that they have no time to offer.
Strategy implementation is doing what has been planned in order to ensure that the Strategic Initiatives deliver the expected benefits to the organization.
The Strategic Initiative Teams know their roles and responsibilities to deliver the expected quality of all agreed results. They have the capacity to fulfill the roles and live up to their responsibility and objectives taking into account the conditions of the Strategic Initiatives.
The Strategy Governance Team with the Change Control Board and the Process Governance Teams all know how to initiate and perform PQA to improve success factors and change direction of the Strategic Initiatives if and when this is required.
However, how does this organization become aware of the need for change?
For strategy implementation, we will look at the method elements from a process point of view with development, implementation, and project and quality management that bring us all the way from the original idea and need for change to the final use and operation of the developed and implemented solution (Figure 7.3).
The idea behind the coffee bean strategy of simultaneous Development and Implementation coordinated by Quality and Project Management is to promote systems and lateral thinking and synergy leading to results that exceed the expectations of the stakeholders. It is an agile strategy.
The method that we have been using comprises the following elements:
• All Strategic Initiatives produce their results based on a requirements specification that is sufficiently detailed to guide the Workgroups in their development, implementation, project management, and quality management work.
FIGURE 7.3
The Coffee Bean Model.
• All Strategic Initiative-work close out with Accept-Testing that proves that the latest version of the requirements specification, which is the one comprised in the latest baseline, has been adhered to.
• Communication:
• Progress measured by KPI.
• Deviations from baseline measured by KPI, but also measured by result quality, changed conditions, and pertinent events.
• Strategy and Strategic Initiative evaluation with Process Governance Team and with Strategy Governance Team ensuring ongoing sponsor support.
• Development of functional (error free) fully normalized databases and processes using agreed technology and ensuring the availability of a feasible information system operation and support.
• Implementation of fully functional solution elements ensuring availability of business operation support facilities such as user guides and training material.
• Project and quality management that ensure availability and efficiency of resources for development, implementation, and ongoing simulated Accept-Testing of solution components delivered from development and implementation. Project and quality management survey and evaluate the Strategic Initiative progress primarily based on simulated Accept-Test results, but also looking after organization and process issues.
We have planned and initiated our Strategic Initiatives with a solid requirements specification and documented result expectations agreed to by sponsors and other key-stakeholders, but how can we make sure that we actually get what we want?
Our plans and our requirements specifications are predictions; it is pure luck if we get a solution that fits the requirements specifications unless we manage the solution delivery.
The Strategic Initiative does not only plan and execute projects; it also changes business behavior, re-organizes organizations, and invests in the development or acquisition of new products and improved methods where the outcome depends on how the market and the internal stakeholders accept the change.
This makes the outcome of Strategic Initiatives random and for both forecasting and tracking we need to apply statistical methods in order to understand the magnitude of variance with which we are faced.
In the Strategic Initiative world of random outcomes, agile planning and tracking of our activity allow an easier to understand follow-up on progress. By measuring progress only by user- and management-accepted solution components delivered, installed, and ready for production we know for sure what we have and we have a steadily improving foundation for estimation based on the gained experience.
The benefits from agile solution delivery in terms of solution quality, process efficiency, and cost reduction far outweigh the planning effort and the scenario establishment investment for their realization.
Strategic Initiative governance is communication and negotiation. The Governance Teams and the Workgroup Teams get and deliver information that indicates that planned activity is not executing the way it was planned:
• Resource availability is not as promised.
• Resource skills and experience are not what was contracted so important activity does not yield the result quality expected and it takes too long to get the results.
• Critical activities cannot start because they wait for resources to be released from other activities.
• Critical activities are interrupted because important resources leave or because development components from the COTS vendor do not work as expected.
I have never been involved with Strategic Initiative projects and programs that do not have these problems.
Risk management can just tell you the threats might happen and that you need to plan for this eventuality with appropriate risk response.
To avoid these threat events is only possible if you double or triple the involved resources and with them the cost of the project and the required budget.
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By allowing a little more time for delivery, you might have time to adapt to the problem without major cost increases and still have happy stakeholders.
These alternative possibilities for avoiding or mitigating the risk demand that the Strategic Initiative sponsor and Governance Teams negotiate with solution delivery Workgroups of internal and external resources in order to find the best possible way to handle the risk situation.
7.6.2 Estimation and Forecasting
PQA is our first foundation for estimation and forecasting when we plan a Strategic Initiative and when we adopt major changes to the Strategic Initiative, that is, when we re-plan the initiative:
• The success factors give us targets of tangible and intangible nature that can be used for negotiation about where to go and for asking questions as to whether a success factor has been achieved.
• The success factors give us an idea about what to implement and why.
• By showing the expected tangible and intangible values of needed solutions and the planned activities to perform their delivery, the success factors provide a base of reference for prioritizing and evaluating the requirements specifications for the solution components to be delivered by the Workgroup Teams.
• The PQA activities with their outline estimated duration and resource usage give us the foundation for more exact estimation and establishment of milestones and baselines against which we can measure progress.
• The milestones tell us the expected delivery date of solution components so that we can have requirements, test scenario, and people ready for simulated and final Accept-Testing.
• Other baseline elements such as the critical path of Workgroup tasks can tell us about the probability of delivery of the final result on planned time.
The forecasting of the product quality is the requirements specification.
We measure the quality of delivered solution components against the requirements specification that has been broken down into very specific and tangible test cases and expected test results.
The breakdown of the requirements specification in use cases and workflows prepares for an agile delivery process with agile planning and tracking.
7.6.3 Strategic Initiative Key Performance Indicators
Once initiated, the progress of the Strategic Initiatives is tracked in order to be able to adapt to new knowledge and other changed conditions.
Over time the risk profiles change and with those the probability of opportunities and threats.
The tracking is based on KPI that can provide information about:
• Organizational condition changes
• Solution condition changes
• Process condition changes
Some KPI are specific for each condition type, while others look at cross-initiative environment indicators that indicate if duration or cost is under control for the Strategic Initiative.
You will also need KPI that can tell you whether your Strategic Initiatives perform as they should from a business perspective, that is, looking at all opportunities and threats known at a given point in time:
• Is what we are doing still attractive?
• Do we need to change the strategy and re-establish more valuable
Strategic Initiatives?
A KPI that can help with this tracking is the Compound Expected Value (CEV). Calculation of CEV per Strategic Initiative makes it possible to compare the initiatives mutually and to evaluate them in the context of overall strategy performance.
We need to communicate in order to keep all stakeholders happy all the time or at least to make sure that the stakeholders understand why they have a reason to be unhappy.
We have used several types of communication:
• PQA
• Meetings for initial scope definition
• Presentations for PQA and IRS participants
• IRS interviews
• OLA-based IRS consolidation
• 9:00 meetings for progress check and fast reaction to issues
• Change request tracking from Workgroup to Strategy Governance
Team
• Status meetings to announce major changes in direction and objectives
All of this communication is planned for and supported by standardized documentation and presentation formats that can be adapted to specific situations or improved over time as experience is obtained.
The objective of the Workgroup Manager communication is to ensure that “no excuse for failure” is obtained through communication and negotiation:
• With the Governance Team, you want to obtain whatever scope changes are needed with respect to funding, time, and solution quality. This negotiation is based on what you know from dialogues with team members, the issue and error documentation, and the Workgroup KPI.
• Within the Workgroup, you ensure that development and implementation teams communicate in an agile way.
• You listen to Workgroup resources in order to ensure efficient solution delivery.
• You call the Workgroup Team together to inform them about needed changes.
• On a daily basis, you meet the active Workgroup Team Members in person-to-person dialogues and in 9:00 meetings simply to keep the team spirit high, but also to discuss issues and problems of both personal and work natures.
• With internal and external stakeholders, you negotiate the resource needs and ensure that these resources are informed and motivated to work in or be used in your Workgroup Team.
IRS and operation of the Planning Information System can be left with other resources such as facilitators and coaches from the Project Office and a Program Office:
• Once the project plan has been estimated, the Project Office can make sure it is registered in the Planning Information System for correct tracking and reporting.
• The Project Office can ensure and control that Workgroup Team Members add task status information in the form of person-hours worked on tasks and work effort estimates in the form of person-hours to complete the task. As Workgroup Manager you are still responsible for reliable time and cost to completion forecasts because this is a result of negotiation.
• Project Office can ensure that the Workgroup Manager gets the pertinent information for plan adaptation and KPI generation as required by this manager.
• IRS and OLA are best performed by professional business analysts and facilitators in the Program Office, not by Workgroup Managers.
Management is about communication and negotiation in the context of planning and tracking of the Strategic Initiatives.