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To do planning right, it needs to be both continuous and adaptive.

Written by Ben Chamberlain on March 3rd, 2021 at 2:01 pm

Click here to read the previous post in this series, or start from the beginning

A series of blogs about Strategic Portfolio Management (SPM) wouldn’t be complete without a post stressing the importance of continuous or adaptive planning.  You may think you’ve heard it all before, but you really haven’t.  Because what is being promoted as the concept of continuous planning, and what many organizations have tried to embrace, isn’t continuous planning at all.  And it certainly isn’t adaptive.

Most organizations just use the same annual planning processes and apply them more frequently – usually quarterly, with business cases that are more sales pitch than objective analysis.  Reviews assume that prior decisions will be validated unless things are a long way off the rails because it takes a long time to shift focus and direction.  And there’s insufficient understanding of the larger operating environment to drive significant change anyway.

Rethinking what planning really is

But if you truly want to adopt continuous planning, then you’ll need to actually change how you plan.  This of course assumes that you’ve already embraced the trimodal reality of traditional, agile and informal project delivery, and you’re ready to expand your delivery models from traditional projects and programs to include products and capabilities.  Because there’s a lot of work being done in a lot of different ways and it all needs to be planned.

But there’s no point in simply applying the same kind of planning you’ve always used with an accelerated cadence, because that’s just prioritizing a list of projects that may or may not align with your strategic priorities, but that still doesn’t provide a comprehensive view of all your investments.  Effective planning today must be a little more complex, because when it’s done right, it’s becomes far more relevant and will deliver improved performance – which is, after all, the point.

Envisioning A Continuous Planning Process

An effective continuous planning model doesn’t simply do annual planning more frequently. It adapts continuously as realities change, ensuring investments are aligned with strategy.

Your budgeting may remain an annual exercise.  But that doesn’t mean it can’t be adjusted during the year as circumstances change.  Indeed, there’s no reason why you can’t continue to set discretionary investment budgets annually to align with your existing budgetary process for the entire organization.

Bulk funding and governance at the product or program level

There’s also no reason why you can’t allocate some of that money on the same basis.  Portfolios don’t magically end because the year changes, they continue with ongoing investments from the previous cycle.  If those investments were important on the last day of the previous year then they’re still important on the first day of the next year and can be funded accordingly.  Similarly, there will be mandatory initiatives that you have to fund whether you like it or not.  Regulatory and compliance work, maintenance and upgrades, etc.  You have to do the work no matter what happens, so you may as well fund it.

What will happen with funding is that you’ll achieve a fairer distribution.  Instead of allocating pockets of funds to business units to be used at their discretion, you allocate funds to major products and programs.  This product and program driven approach more closely ties the funding of work with the strategic priorities of the business and also helps to elevate oversight and governance to the product / program level instead of being lower down in the business at the project level.

That in turn provides greater control makes the adjustment process much easier – as project or epic funding is directly tied to performance and driven by product and program level funding.  Then, as variables change – which is the very reason why you need continuous and adaptive planning in the first place, it’s easy to reallocate funds directly at the product / program level – and less issues trying to ‘claw back’ departmental level funding.  And make no mistake, when it comes to the truly discretionary investments – those work items you choose to pursue to achieve your strategic imperatives – your planning approach must be constantly evolving.  Situations are always changing and you can’t assume that previous decisions are still valid.

As variables change, funds should be reallocated

Your business has limited capacity and capabilities.  There are only so many parallel pieces of work that you can undertake, so many initiatives that you have the people to work on, the skills to be successful with, and the funding to invest in.  Understanding these limitations will help you ensure you are only approving work that can be carried out immediately.  And that’s all that should be funded and committed to, even at this program and product level.

There’s no point in funding work that can’t start for three months because resources won’t be available.  Three months from now a lot of things could have changed – shifting priorities, shifting capacity and capability, changes in the operating environment, etc.  All of those things could, and should, impact the decision about whether to fund those other investments.  To be sure you are always funding work that has the best chance of delivering strategic value, you have to make the gap between approval/funding and work delivery as short as possible.

A continuous process that must also be adaptive

That’s where continuous planning comes in.  Not quarterly, not monthly, continuous.  Which means embracing the process of constantly asking yourself whether circumstances have changed and altered your investment decisions:

  • Do the currently funded initiatives still make sense?
  • Are the highest priority items in the portfolio backlog (work awaiting funding) still the right ones?
  • Are the goals and objectives still appropriate and realistic?

Sometimes, the answer to those questions will be “no”.  And that’s where the adaptive element comes in.  Continuous planning can’t be a feel-good exercise – an opportunity to confirm previous decisions.  It has to be a real opportunity to adjust the work you’re doing and the priorities you have – as realities on-the-ground change – to ensure total alignment with what you need to achieve and what is actually happening.

So, there you have it, real-world continuous and adaptive planning that will deliver meaningful improvements.  It’s a great theory, but it only happens when your resources are constantly optimized.  And that’s the next area of SPM we’re going to discuss.

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