Whenever a team takes the time to look back at the strategic initiatives that they launched a year two ago, it becomes obvious. Too many initiatives were launched.
Strategic initiative plans typically have tens if not hundreds of projects folded within in their full scope. It’s indeed tempting to plan, budget and launch most of at the beginning of the year. And with the quick wins–the very obvious projects that everyone knows are an improvement–showing success early, it’s an easy mistake to believe that progress will continue to be so simple.
But realistically, there is a maximum work capacity in any organization. Because so many of these projects are launched on top of day-to-day activities, instead of replacing business as usual, there is a maximum ability to digest change. Without the right incentives, that digestion metabolism is even slower. And as this volume of work increases far beyond capacity, both new and regular work processes break down.
Aside from the need to stay agile, what are the best ways to avoid this outcome?
- Define a maximum concurrent number of projects that your organization can digest
- Whether it’s 20, 50, 100 at a time, commit to the number and keep the rest in a backlog
- Create budgets only for the first set of projects that you launch, and keep an envelope for the rest of the backlog
Remember that agility is not just about velocity. It’s also about reaction and being able to quickly, intelligently change direction. Agility means that if a project is really successful in one region or business unit or category, you can repeat it in other like countries/regions or teams. It means you leverage success and you duplicate it. You could not have planned for this because you can’t predict your best recipes.
And the other side of that reaction time? You need to stop when it doesn’t make sense to continue the work. If one project is not performing as expected you must decide to fail fast and move along. When you stop the wrong work, everyone is more focused, and budget can be re-allocated for another initiative in the backlog.
Only when one strategic initiative is completed do you budget for a new one. Rarely is the required, optimal budget at the middle of the year similar to the theoretical budget that would have been on a whiteboard 6 months before.
If you shift budgets according to the maximum initiative number and plan to decide on investment as you learn, that is the most nimble form of agility. Plus you save the effort of defining budget and wasting resources on work that you will never really be able to do.
It is a big leap of faith to not created detailed budgets and forecasts, and to instead create a backlog and pool for future funding — but if you manage to create this system, then you really become agile. Learn more about how to manage Strategic Initiatives in our free ebook!