This is article 1 of 3 in a series on Business Agility, stemming from talks and client work over the past few months. The following will be covered:
- Managing Value Stream with OKRs, Scrum, and Flight Levels
- Focusing on Value in Scrum with OKRs
🤔 What is Agile Strategy?
Business strategy involves deciding what products and services a company should offer at any given time to pursue its mission, achieving the set goals of customer satisfaction and business profit.
As Martin and Lafley claim "strategy is about choosing where to play and how to win." Thus, it's about understanding in which sectors and types of products/services it's appropriate to compete, and how to make the company's offer at least as good for the customer as the others.
Strategy is about choosing where to play and how to win. Playing to Win: How Strategy Really Works. Martin and Lafley
Traditional strategy is based on detailed analysis and rigid, long-term planning on how to deploy the strategy. Although this was effective in the second half of the last century, the continuous acceleration in product and service innovation brought about the digital economy, making this type of strategy unviable today.
In contrast, agile strategy starts from the premise that it's necessary to learn and adapt quickly to technological evolution, customer tastes and needs, and the actions of competitors.
Agile strategy is based on adaptability, cross-functional collaboration, and continuous learning. This approach promotes experimentation, quick feedback, and iteration, allowing companies to pivot as needed and seize emerging opportunities.
💪 The challenge of strategy is often in its execution
Creating strategies can be an exhilarating process, based on data analysis, creative brainstorming sessions, and grand aspirations. This creates plans with a typical time horizon of 1 to 5 years.
But the difficulty lies in the execution of the strategy for two reasons:
- It must be proven that the decisions about the winning products and services were correct.
- Aligning the organization to work on strategic objectives considering its legacy and also adding the day-to-day work is very difficult.
“Creating the strategy is easy, executing it is an art.” Peter Drucker.
Agile strategy aims to mitigate these challenges by:
- Validating assumptions made in an increasing and frequent manner. Assumptions about how products and services will be winners must be tested as quickly and cheaply as possible, and depending on the result, pivot to another idea or continue investing in the current one.
An example is the development of a feature for an app. Developing it for months and then delivering it is slow, costly, and risky. Starting by conducting experiments like interviews and mockups helps to reduce the risk of failure more quickly and cheaply.
- Creating organizational transparency and alignment. Strategic initiatives involve the collaboration of many people, teams, and departments. All participants must have a clear vision of the objectives and the degree of progress achieved, their necessary contribution, the need for collaboration with other parts, and also provide ideas to optimize the path to the objectives.
↕ Agile Strategy Execution with OKRs, Flight Levels, and Scrum
The combined use of OKRs, Flight Levels, and Scrum allows for deploying the strategy with transparency, alignment, increasing validation, and continuous learning. Let's see how.
🏁 OKRs (Objectives and Key Results)
OKR is a method that allows defining clear and measurable goals, establishing what is aspired to achieve and how progress will be quantified.
The beauty of OKRs lies in their simplicity and flexibility, allowing teams to maintain vertical alignment in their contributions to strategic objectives, and horizontal alignment to coordinate among themselves.
For example, an objective (O) could be "This quarter, increase user satisfaction with GymTonic gym activities," while the Key Results (KR) that would allow measuring its achievement could be:
- The client manages to book 80% of their preferred activities.
- The activities have more than a 50% occupancy rate.
The company's overall goals are usually set annually, while team objectives are set quarterly. Key results are usually measured weekly or bi-weekly. Additionally, all team OKRs are public.
👉 Thus, public OKRs allow transparency both in setting objectives and in their execution. Moreover, team OKRs are explicitly and consensually aligned with management and the rest of the involved teams.
Finally, the weekly measurement of key results allows for the increasing validation of the execution of the strategy, learning what works and what doesn't, and pivoting if necessary.
✈ Flight Levels
Flight Levels helps visualize how strategic objectives are interconnected with daily activities, ensuring all teams are working towards common goals.
The levels of Flight Levels are:
- Level 3: Strategic objectives and initiatives, possibly defined with Flight Levels.
- Level 2: Coordination of the work of strategic initiatives among all participants.
- Level 1: Management of teams' daily work.
👉 The Flight Levels allow maintaining the transparency of ongoing initiatives and the work to carry them out, and limit both to a sustainable limit (WIP). It also allows visually aligning the strategic initiatives with the teams' work, and learn/validate what works with frequent level 3 meetings.
🏉 Scrum
Scrum enables teams to manage complex work by breaking down strategic objectives into Product Goals that direct work at a high level, and Sprint Goals on the scale of days and weeks, which facilitates work planning.
Each Sprint allows for planning and coordinating tasks, tracking the daily adaptive progress of work and partial results obtained, and learning at the end of the Sprint to optimize work for the following Sprints.
👉 Scrum maintains transparency and alignment with its Product Goals and Sprint Goals, Product Backlog, and the results of the Sprints, visible to the involved parties. The team's daily meetings, as well as the end-of-Sprint meetings, allow for validating the results and learning how to optimize work for the next Sprints.
🧭 The Strategic Level of Flight Levels
To conclude this first article in the series, we'll review the level 3 of strategy of Flight Levels.
As seen in the diagram, this level allows us to align the company's long-term strategic objectives (one or more years) with the intermediate objectives of the teams.
Moreover, we can plan the teams' initiatives in the short and medium term, with results before 90 days, and most importantly, track the progress between teams and management frequently (e.g., weekly or bi-weekly).
👉 This level and its frequent tracking allow for transparency and alignment between teams and management. Additionally, in a few weeks, we learn what works and what doesn't, enabling the validation of the achievement of objectives and pivoting when necessary.
👣 Next Steps
Now we have an overview of how OKR, Flight Levels, and Scrum work together.
In the next article, we'll see how the level 2 of coordination of Flight Levels works, which maintains a sustainable workload, achieves horizontal alignment of teams, and quickly reacts to unforeseen discoveries regarding the risks of achieving the objectives.
Don't miss it!
🤔 To Learn More
- Scrum courses from ITNOVE (most in Spanish), if you want to understand how Scrum works professionally.
- OKR courses from OKRmentors (both English and Spanish) They will explain everything you need to know about OKR, from a 2-hour introductory course (OKR Boost) to courses for leaders (OKR Lead) and change agents in teams (OKR Champion).
- Rethinking Agile book to get introduced to Flight Levels.
Flight Levels System Architecture course, both in Spanish and English, from the PST and official trainer FL José Casal if you want to delve deeper into Flight Levels.