To be agile-ready the operational plan must meet these criteria:
- A logically sound causal tree of conditions to be met
- Conditions to be expressed as results (DoDs), not action
- Ready for execution = delivery of key projects
- Ready for agile adaption = review and modofication of each element
Agile business management
- To manage a business in short operational sprints, adjusting content of the operational plan continuously.
- Sprints driven by the PEC (plan-execute-check) cycle.
Traditionally we view the relationship between strategy and operational plan in pyramidal and top-down fashion: first you need strategy, the you implement it.
For agile business management we need to abolish the traditional view. Instead, the relationship changes to “non-pyramidal”: first, you need the operational plan, and then the elements of strategy provide (on request) information required to design effective operational plans.
- DoDs by which we will overcome an obstacle.
- "If all commitments are delivered, then ..."
- Focus the operational plan on the vital few actions required to achieve the operational goal.
- Competitors are those businesses with whom customers compare us to make a purchasing decision.
- In essence, they create hindering factors, obstacles, for our successful flow of income.
- We must understand these obstacles and include them in our plan - to either neutralize them or ignore them (if we believe we can do so)
- When defining our plan's necessary conditions we must include how these will cope with our competitors' initiatives
Critical success factors
- The vital few conditions under which the operational goal will be achieved.
- "If all critical success factors are achieved, then we will reach our operational goal".
- Focus the operational plan on the vital few factors to address.
Multiple unit plans
- Many however need more than one plan - for instance by product line or by geographic unit.
- Each of these will have their specific critical success factors, competitive obstacles and key projects to achieve their goal.
- Plans designed for agility are specific by business unit.
- The only link to the business in its entirety is by the goals, which need to be tracked locally, and summed up for the business
Necessary conditions (NC)
- Definition of Done (DoD) of a key project.
- "If all necessary conditions are achieved by their key projects, then the critical success factor will be reached, so we will achieve our goal."
- Focus the operational plan on the vital few operational results (changes in the business systems) to be achieved.
- Somethings that prevents us from delivering a necessary condition.
- Must be overcome, eliminated or “walked around” to be resolved.
- "If all obstacles are overcome, then we will deliver all our key projects, so then we will achieve our critical success factors and in return will achieve our goal."
- Focus the operational plan on the vital few actions within key projects.
- One single indicator measuring the flow of energy coming in from customers. In accounting terms either income or contribution margin.
- For effective and efficient agile business management we must focus on one and only one overriding goal.
- For a business this typically is contribution margin – income minus variable cost.
- The centerpiece of agile business management.
- Comprising the list of vital few initiatives required to achieve the operational goal.
- Formatted as logic (causality) tree of critical success factors, competitor's initiatives, necessary conditions (DoDs of key projects), obstacles to deliver these projects and commitments to deliver to overcome these obstacles.
- Best practice is to summarize the entire operational plan on one single page.
- Shows everyone in the team their contribution. "No I finally know how I can contribute to the company"
Top-down planning fails
- In traditional management we plan top-down: strategy is defined at the top and then deployed downwards to units.
- This approach ignores the operational specifics of units, for instance constraints
- "local" unit management faces two options: "Say yes and do nothing" or "Follow top command". In both cases the outcome are waste and failure.