A Strategy Deployment Diagram

I came up with an initial diagram to visually summarise Strategy Deployment when I wrote about the dynamics. However, while it showed some of the collaborative elements, I never felt it was sufficient, and still had a hint of hierarchy about it that I didn’t like.

More recently, while reading “Understanding Hoshin Kanri: An Introduction by Greg Watson“, I saw a diagram I liked much more, and was inspired to tweak it to fit my understanding and experience of the approach.

Working from the outside of the picture…

The outer loop shows the people involved and their interactions as a collaboration rather than as a hierarchy. Whilst levels of seniority are represented, these levels describe the nature of decisions being made. Thus the three primary groups are the Leadership Team, Operational Teams and Implementation Teams which reflect the three primary roles in Catchball, and which are responsible for co-creating and owning the various A3 Templates. The bi-directional arrows between these teams show how they collaborate to discover, negotiate and agree on the Outcomes, Plans and Actions. (Note: the original diagram had the arrows only going clockwise, which suggested a directing and reporting dynamic to me).

The three inner circles show the main focuses of each team. The Strategy Team set direction through the True North and Aspirations. The Operational Teams maintain alignment to the intent of the Strategies by making Investments in improvement opportunities. The Implementation Teams have autonomy to realise the strategies by determining and carrying out Tactics and generating Evidence of progress.

The intersections of these circles map onto the three elements of Stephen Bungay’s Directed Opportunism (from his book “The Art of Action”), and they describe the essence of the collaboration between the different groups. The Strategy Team and Operational Teams work together to establish positive Outcomes. The Operational Teams and Implementation Teams work together to define plausible Plans. The Implementation Teams and Strategy Team work together to review the results of the Actions.

Finally, the central intersection of all the circles, and the combination of all of these elements, is a continuous Transformation –  the result of everyone working together with both alignment and autonomy.

Given this visualisation, we can also overlay the three A3 Templates on top, showing which teams have primary responsibility for each.

Like all diagrams, this is a simplification. Its the map, and not the territory. The collaborations are not as separate and clear cut as it might imply. Rather, much of this work is emerging and evolving, collectively and simultaneously. I still believe, however, that it is a useful picture of Strategy Deployment as “any form of organisational improvement in which solutions emerge from the people closest to the problem.”

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Announcing the X-Matrix Jigsaw Puzzle

fitting the pieces together

The X-Matrix Jigsaw Puzzle is what I call the exercise I use in Strategy Deployment workshops to help people experience creating an X-Matrix in a short space of time. It consists of a pre-defined and generic set of “pieces” with which to populate the various sections, deciding which pieces should go where, and how they fit together.

I’ve just created a page to make this available under Creative Commons Attribution-ShareAlike 4.0 International.  If you try it out, please let me know how you get on!

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Strategy Deployment and Impact Mapping

I’ve had a couple of conversations in recent weeks in which Impact Mapping came up in relation to Strategy Deployment so here’s a post on my thoughts about how the two fit together.

An Impact Map is a form of mind-map developed by Gojko Adzic, visualising the why, who, how and what of an initiative. More specifically, it shows the goals, actors involved in meeting the goals, desired impact on the actors (in order to meet the goals), and deliverables to make the impacts. The example below is from Gojko’s website.

As you can see, an Impact Map is very simple, reductionist visualisation, from Goals down to Deliverables, and while the mind map format doesn’t entirely constrain this, it tends to be what most examples I have seen look like. It does however work in such as way to start with the core problem (meeting the goal) and allow people to explore and experiment with how to solve that problem via deliverables. This is very much in line with how I define Strategy Deployment.

Lets see how that Impact Map might translate onto an X-Matrix.

The Goal is clearly an Aspiration, so any relevant measures would neatly fit into the X-Matrix’s bottom section. At the other end, the Deliverables are also clearly Tactics, and would neatly fit in the X-Matrix-s top section. I would also argue that the Impacts provide Evidence that we are meeting the Aspirations, and could fit into the X-Matrix’s right-hand section. What is not so clear is Strategy. I think the Actors could provide a hint, however, and I would suggest that an Impact Map is actually a good diagnosis instrument (as per Rumelt) with which to identify Strategy.

Taking the 4 levels on an Impact Map, and transposing them onto an X-Matrix, creates a view which can be slightly less reductionist (although not as simple), and opens up the possibility of seeing how all the different elements might be related to each other collectively. In the X-Matrix below I have added the nodes from the Impact Map above into the respective places, with direct correlations for the Impact Map relationships. This can be seen in the very ordered pattern of dots. New Tactics (Deliverables) and Evidence (Impacts), and possible more Aspirations (Goals), would of course also need to be added for the other Strategies (Actors).

Even though this is a very basic mapping, I hope its not too difficult to see the potential to start exploring what other correlations might exist for the identified Tactics. And what the underlying Strategies really are. I leave that as exercise for you to try – please leave a comment with what ideas you have!

This post is one of a series comparing Strategy Deployment and other approaches.

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The Messy Coherence of X-Matrix Correlations

I promised to say more about correlations in my last post on how to TASTE Success with the X-Matrix .

One of the things I like about the X-Matrix is that it allows clarity of alignment, without relying on an overly analytical structure. Rather than consisting of simple hierarchical parent-child relationships, it allows more elaborate many-to-many relationships of varying types. This creates a messy coherence – everything fits together, but without too much neatness or precision.

This works through the shaded matrices in the corners of the X-Matrix – the ones that together form an X and give this A3 its name! Each cell in the matrices represents a correlation between two of the numbered elements. Its important to emphasise that we are representing correlation, and not causation. There may be a contribution of one to the other, but it is unlikely to be exclusive or immediate. Thus implementing Tactics collectively contribute towards applying Strategies and exhibiting Evidence. Similarly applying Strategies and exhibiting Evidence both collectively contribute towards meeting Aspirations. What we are looking for is a messy coherence across all the pieces.

There are a few approaches I have used to describe different types of correlation.

  • Directness – Can a direct correlation be explained, or is the correlation indirect via another factor (i.e. it is oblique). This tends to be easier to be objective about.
  • Strength – Is there a strong correlation between the elements, or is the correlation weak. This tends to be harder to describe because strong and weak are more subjective.
  • Likelihood – Is the correlation probable, possible or plausible. This adds a third option, and therefore another level of complexity, but the language can be useful.

Whatever the language, there is always the option of none. An X-Matrix where everything correlates with everything is usually too convenient and can be a sign of post-hoc justification.

Having decided on an approach, a symbol is used in each cell to visualise the nature of each correlation. I have tried letters and colours, and have recently settled on filled and empty circles, as in the example below. Filled circles represent direct or strong correlations, while empty circles represent indirect or weak correlations. (If using likelihood, a third variant would be needed, such as a circle with a dot in the middle).

Here we can see that there is a direct or strong correlation between “Increase Revenue +10%” (Aspiration 1) and “Global Domination” (Strategy 1). In other words this suggests that Strategy 1 contributes directly or strongly to Aspiration 1. As do all the Strategies, which indicates high coherence. Similarly, Strategy 1 has a direct/strong correlation with Aspiration 2, but Strategy 2 has no correlation, and Strategy 3 only has indirect/weak correlation.

Remember, this is just a hypothesis, and by looking at the patterns of correlations around the X-Matrix we can see and discuss the overall coherence. For example we might question why Strategy 3 only has Tactic 2 with an indirect/weak correlation. Or whether Tactic 2 is the best investment given its relatively poor correlations with both Strategies and Evidence. Or whether Evidence 4 is relevant given its relatively poor correlations with both Tactics and Aspiration.

Its visualising and discussing these correlations that is often where the magic happens, as it exposes differences in understandings and perspectives on what all the pieces mean and how relate to each other. This leads to refinement of X-Matrix, more coherence and stronger alignment.

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TASTE Success with an X-Matrix Template

I’ve put together a new X-Matrix A3 template to go with the Backbriefing and Experiment A3s I published last month. Together, these 3 templates work well together as part of a Strategy Deployment process, although I should reiterate again that the templates alone are not sufficient. A culture of collaboration and learning is also necessary as part of Catchball.

 

While creating the template I decided to change some of the language on it – mainly because I think it better reflects the intent of each section. However a side-benefit is that it nicely creates a new acronym, TASTE, as follows:

  • True North – the orientation which informs what should be done. This is more of a direction and vision than a destination or future state. Decisions should take you towards rather than away from your True North.
  • Aspirations – the results we hope to achieve. These are not targets, but should reflect the size of the ambition and the challenge ahead.
  • Strategies – the guiding policies that enable us. This is the approach to meeting the aspirations by creating enabling constraints.
  • Tactics – the coherent actions we will take. These represent the hypotheses to be tested and the work to be done to implement the strategies in the form of experiments.
  • Evidence – the outcomes that indicate progress. These are the leading indicators which provide quick and frequent feedback on whether the tactics are having an impact on meeting the aspirations.

Hence working through these sections collaboratively can lead to being able to TASTE success 🙂

One of the challenges with an X-Matrix template is that there is no right number of items which should populate each section. With that in mind I have gone for what I think is a reasonable upper limit, and I would generally prefer to have fewer items than the template allows.

This version also provides no guidance on how to complete the correlations on the 4 matrices in the corners which create the X (e.g. Strong/Weak, Direct/Indirect, Probable/Possible/Plausible). I will probable come back to that with a future version and/or post.

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Good Agile/Bad Agile: The Difference and Why It Matters

kernels and bugsThis post is an unapologetic riff on Richard Rumelt’s book Good Strategy/Bad Strategy: The Difference and Why It Matters. The book is a wonderful analysis of what makes a good strategy and how successful organisations use strategy effectively. I found that it reinforced my notion that Agility is a Strategy and so this is also a way to help me organise my thoughts about that from the book. 

Good and Bad Agile

Rumelt describes Bad Strategy as having four major hallmarks:

  • Fluff – meaningless words or platitudes.
  • Failure to face the challenge – not knowing what the problem or opportunity being faced is.
  • Mistaking goals for strategy – simply stating ambitions or wishful thinking.
  • Bad strategy objectives – big buckets which provide no focus and can be used to justify anything (otherwise known as “strategic horoscopes”).

These hallmarks can also describe Bad Agile. For example, when Agile is just used for the sake of it (Agile is the fluff). Or when Agile is just used to do “the wrong thing righter” (failing to face the challenge). Or when Agile is just used to “improve performance” (mistaking goals for strategy). Or when Agile is just part of a variety of initiatives (bad strategy objectives).

Rumelt goes on to describe a Good Strategy as having a kernel with three elements:

  • Diagnosis – understanding the critical challenge or opportunity being faced.
  • Guiding policy – the approach to addressing the challenge or opportunity.
  • Coherent actions – the work to implement the guiding policy.

Again, I believe this kernel can help identify Good Agile. When Agile works well, it should be easy to answer the following questions:

  • What diagnosis is Agile addressing for you? What is the critical challenge or opportunity you are facing?
  • What guiding policy does Agile relate to? How does it help you decide what you should or shouldn’t do?
  • What coherent actions you are taking that are Agile? How are they coordinated to support the strategy?

Sources of Power

Rumelt suggests that

“a good strategy works by harnessing power and applying it where it will have the greatest effect”.

He goes on to describe nine of these powers (although they are not limited to these nine) and it’s worth considering how Agile can enable them.

  • Leverage – the anticipation of what is most pivotal and concentrating effort. Good Agile will focus on identifying and implementing the smallest change (e.g. MVPs) which will result in largest gains.
  • Proximate objects – something close enough to be achievable. Good Agile will help identify clear, small, incremental and iterative releases which can be easily delivered by the organisation
  • Chain-link systems – systems where performance is limited by the weakest link.  Good Agile will address the constraint in the organisation. Understanding chain-link systems is effectively the same as applying Theory of Constraints. 
  • Design – how all the elements of an organisation and its strategy fit together and are co-ordinated to support each other. Good Agile will be part of a larger design, or value stream, and not simply a local team optimisation. Using design is effectively the same as applying Systems Thinking. 
  • Focus – concentrating effort on achieving a breakthrough for a single goal. Good Agile limits work in process in order to help concentrate effort on that single goal to create the breakthrough.
  • Growth – the outcome of growing demand for special capabilities, superior products and skills. Good Agile helps build both the people and products which will result in growth.
  • Advantage – the unique differences and asymmetries which can be exploited to increase value. Good Agile helps exploit, protect or increase demand to gain a competitive advantage. In fact Good Agile can itself be an advantage.
  • Dynamics – anticipating and riding a wave of change. Good Agile helps explore new and different changes and opportunities, and then exploits them.
  • Inertia and Entropy – the resistance to change, and decline into disorder. Good Agile helps organisations overcome their own inertia and entropy, and take advantage of competitors’ inertia and entropy. In effect, having less inertia and entropy than your competition means having a tighter OODA loop.

In general, we can say that Good Agile “works by harnessing power and applying it where it will have the greatest effect”, and it should be possible to answer the following question:

  • What sources of power is your strategy harnessing, and how does Agile help apply it?

Thinking like an Agilist

Rumelt concludes with some thoughts on creating strategy, and what he suggests is

“the most useful shift in viewpoint: thinking about your own thinking”.

He describes this shift from the following perspectives:

  • The Science of Strategy – strategy as a scientific hypothesis rather than a predictable plan.
  • Using Your Head – expanding the scanning horizon for ideas rather than settling on the first idea.
  • Keeping Your Head – using independent judgement to decide the best approach rather than following the crowd.

This is where I see a connection between Good Strategy and Strategy Deployment, which is an approach to testing hypotheses (science as strategy), deliberately exploring multiple options (using your head), and discovering an appropriate, contextual solution (keeping your head).

In summary, Good Agile is deployed strategically by being part of a kernel, with a diagnosis of the critical problem or opportunity being faced, guiding policy which harnesses a source of power, and coherent actions that are evolved through experimenting as opposed to being instantiated by copying.

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A3 Templates for Backbriefing and Experimenting

I’ve been meaning to share a couple of A3 templates that I’ve developed over the last year or so while I’ve been using Strategy Deployment. To paraphrase what I said when I described my thoughts on Kanban Thinkingwe need to create more templates, rather than reduce everything down to “common sense” or “good practice”. In other words, the more A3s and Canvases there are, the more variety there is for people to choose from, and hopefully, the more people will think about why they choose one over another. Further, if people can’t find one that’s quite right, I encourage them to develop their own, and then share it so there is even more variety and choice!

Having said that, the value of A3s is always in the conversations and collaborations that take part while populating them. They should be co-created as part of a Catchball process, and not filled in and handed down as instructions.

Here are the two I am making available. Both are used in the context of the X-Matrix Deployment Model. Click on the images to download the pdfs.

Backbriefing A3

Backbriefing A3

This one is heavily inspired by Stephen Bungay’s Art of Action. I use it to charter a team working on a tactical improvement initiative. The sections are:

  • Context – why the team has been brought together
  • Intent – what the team hopes to achieve
  • Higher Intent – how the team’s work helps the business achieve its goals
  • Team – who is, or needs to be, on the team
  • Boundaries – what the team are or are not allowed to do in their work
  • Plan – what the team are going to do to meet their intent, and the higher intent

The idea here is to ensure a tactical team has understood their mission and mission parameters before they move into action. The A3 helps ensure that the team remain aligned to the original strategy that has been deployed to them.

The Plan section naturally leads into the Experiment A3.

Experiment A3

Experiment A3

This is a more typical A3, but with a bias towards testing the hypotheses that are part of Strategy Deployment. I use this to help tactical teams in defining the experiments for their improvement initiative. The sections are:

  • Context – the problem the experiment is trying to solve
  • Hypothesis – the premise behind the experiment
  • Rationale – the reasons why the experiment is coherent
  • Actions – the steps required to run the experiment
  • Results – the indicators of whether the experiment has worked or not
  • Follow-up – the next steps based on what was learned from the experiment

Note that experiments can (and should) attempt to both prove and disprove a hypothesis to minimise the risk of confirmation bias. And the learning involved should be “safe to fail”.

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Agendashift, Cynefin and the Butterfly Stamped

The butterfly who stamped

I’ve recently become an Agendashift partner and have enjoyed exploring how this inclusive, contextual, fulfilling, open approach fits with how I use Strategy Deployment.

Specifically, I find that the Agendashift values-based  assessment can be a form of diagnosis of a team or organisation’s critical challenges, in order to agree guiding policy for change and focus coherent action. I use those italicised terms deliberately as they come from Richard Rumelt’s book Good Strategy/Bad Strategy in which he defines a good strategy kernel as containing those key elements. I love this definition as it maps beautifully onto how I understand Strategy Deployment, and I intent to blog more about this soon.

In an early conversation with Mike when I was first experimenting with the assessment, we were exploring how Cynefin relates to the approach, and in particular the fact that not everything needs to be an experiment. This led to the idea of using the Agendashift assessment prompts as part of a Cynefin contextualisation exercise, which in turn led to the session we ran together at Lean Agile Scotland this year (also including elements of Clean Language).

My original thought had been to try something even more basic though, using the assessment prompts directly in a method that Dave Snowden calls “and the butterfly stamped“, and I got the chance to give that a go last week at Agile Northants.

The exercise – sometimes called simply Butterfly Stamping – is essentially a Four Points Contextualisation in which the items being contextualised are provided by the facilitator rather than generated by the participants. In this case those items were the prompts used in the Agendashift mini assessment, which you can see by completing the 2016 Agendashift global survey.

This meant that as well as learning about Cynefin and Sensemaking, participants were able to have rich conversations about their contexts and how well they were working, without getting stuck on what they were doing and what tools, techniques and practices they were using. Feedback was very positive, and you can see some of the output in this tweet:

I hope we can turn this into something that can be easily shared and reused. Let me know if you’re interested in running at your event. And watch this space!

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How Rally Does… Strategy Deployment

This is another post originally published on the Rally Blog which I am reposting here to keep an archived copy. It was part of the same series as the one on annual and quarterly planning, in which we described various aspects of the way the business was run. Again, apart from minor edits to help it make sense as a stand alone piece I have left the content as it was.


Strategy Deployment is sometimes known as Hoshin Kanri, and like many Lean concepts, it originated from Toyota. Hoshin Kanri is a Japanese term whose literal translation can be paraphrased as “compass control.” A more metaphorical interpretation, provided by Pascal Dennis in Getting the Right Things Done, is that of a “ship in a storm going in the right direction.”

Compass

Strategy Deployment is about getting everyone involved in the focus, communication, and execution of a shared goal. I described in previous posts how we collaboratively came up with strategies and an initial plan in the form of an X-matrix. The tool that we use for the deployment is the Strategic A3.

Strategic A3s

A3 refers to the size of the paper (approximately 11 x 17 inches) used by a number of different formats to articulate and communicate something in a simple, readable way on a single sheet of paper. Each rock or departmental team uses a Strategic A3 to describe its plan. This forms the basis for their problem-solving approach by capturing all the key hypotheses and results, which helps identify the opportunities for improvement.

The different sections of the A3 tell a story about the different stages of the PDSA cycle (Plan, Do, Study, Adjust.) I prefer this latter formulation from Dr. W. Edwards Deming to the original PDCA(Plan, Do, Check, Act) of Walter A. Shewhart, because “Study” places more emphasis on learning and gaining knowledge. Similarly, “Adjust” implies feedback and iteration more strongly than does “Act.”

This annual Strategic A3 goes hand-in-hand with a macro, longer-term (three- to five-year) planning A3, and numerous micro, problem-solving A3s.

Anatomy of a Strategic A3

This is what the default template that we use looks like. While it is often good to work on A3s using pencil and paper, for wider sharing across the organisation we’ve found that using a Google document works well too.

StrategicA3

Each A3 has a clear topic, and is read in a specific order: down the left-hand side, and then down the right hand side. This flow aligns with the ORID approach (Objective, Reflective, Interpretive, Decisional) which helps avoid jumping to early conclusions.

The first section looks at prior performance, gaps, and targets, which give objective data on the current state. Targets are a hypothesis about what we would like to achieve, and performance shows the actual results. Over time, the gap between the two gives an indication of what areas need investigation and problem-solving. The next section gives the reactions to, and reflections on, the objective data. This is where emotions and gut feelings are captured. Then comes interpretation of the data and feelings to give some rationale with which to make a plan.

The three left-hand sections help us look back into the past, before we make any decisions about what we should do in the future. Having completed that we have much better information with which to complete the action plan, adding high-level focus and outcomes for each quarter. The immediate quarter will generally have a higher level of detail and confidence, with each subsequent quarter afterward becoming less granular. Finally, the immediate next steps are captured and any risks and dependencies are noted so that they can be shared and managed.

Co-creating a Strategic A3

As you can probably imagine from reading the previous posts, the process of completing a Strategic A3 can be a highly collaborative, structured, and facilitated process. One team with which I work closely recently had grown to a point where we would benefit from our own Strategic A3, rather than being a part of a larger, international Strategic A3. To create it we all got together for a day in our Amsterdam office. We felt that this would allow us to align more strongly with the corporate strategy and communicate more clearly what we were doing, and where we needed help.

We began by breaking into small groups of three to four people, mostly aligned around a regional territory. These groups spent some time filling in their own copy of the A3 template. We then reconvened together and each group gave a readout of its discussions, presenting the top three items from each section, which we captured with post-it notes on flip charts. Having gone around each group I then asked everyone to silently theme the post-its in each section until everyone seemed happy with the results. This led to a discussion about each theme and identifying titles for them. We still had quite a few themes, so we finished off by ranking them with dot-voting so that we could be clear on which  items were most important.

Our last step was to identify the top three items on the A3 that we wanted to highlight to the wider business. This turned out to be a relatively simple conversation. The collaborative nature of the process meant that everyone had a clear and shared understanding of what was important and where we needed focus.

A3Karl0 a3Karl1

Corporate Steering

Strategy deployment is not a one-off, top-down exercise. Instead, the Strategic A3 is used as a simple tool that involves everyone in the process. Teams prepare and plan their work, in line with the corporate goals, and each quarter they revisit and revise their A3s as a means of communicating status and progress. As performance numbers become available an A3 will be updated with any changes highlighted, and the updated A3 then becomes a key input into Quarterly Steering.

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How Rally Does… Annual and Quarterly Planning

This post was originally published on the Rally Blog and I am reposting here to keep an archived copy. It was part of a series in which we described various aspects of the way the business was run. Apart from one minor edit to help it make sense as a stand alone piece I have left the content as it was. However, I suspect that since Rally is now part of CA Technologies, much of what I described has changed.


Rally has a regular, quarterly cadence with which we manage corporate planning, and in which we invest heavy preparation so that we get maximum value. For this year’s Annual Planning, preparation included creating market and opportunity maps and a set of potential strategies, as well as crafting an agenda to help facilitate the collaborative co-creation of the outcomes.

What is Annual Planning?

At Rally, Annual Planning is a two-day meeting involving around 80 people – roughly 70 Rally employees and 10 invited customer representatives. The employees are a mix of people representing all areas of the business: directors and above always attend these key corporate cadences, and other members of the company take turns participating. The customers chosen to join us are those who have shown a keen interest in seeing how we facilitate these large events, and from whom we can learn and get great feedback. Apart from the confidential opening introduction, the customers are involved throughout: spread out across business groups and breakouts, sitting amongst employees, and actively working and contributing as much as anyone else.

This year, we ran Annual Planning a quarter in advance of the financial year we’re about to start. We’ve learned that the initial plan will need validation and refinement, and thus we need to allow time for that to happen. Therefore, the purpose of the two days was to draft our corporate plan for the next financial year, so that we can validate it in the final quarter of the current financial year.

What Do We Do in Annual Planning?

Over the years, we have settled on terminology for corporate planning, inspired by a couple of books. First, Pascal Dennis’ Getting the Right Things Done introduces the terms “True North” and “Mother Strategies.” The True North is the single mantra or slogan that defines where the company wants to be at the end of the year. Mother Strategies are the focus areas that will help us arrive at the True North.

rocks

The True North and Mother Strategies guide the day-to-day departmental work, along with cross-departmental initiatives, which are knows as “Rocks.” Rocks are inspired by techniques described in Verne Harnish’s book, Mastering the Rockefeller Habits. The metaphor of a Rock is based on the idea that if you have a bucket, you should fill it first with a few big rocks: these are the big things you want to accomplish. If there is more space you can then put in pebbles, or medium-sized projects. With any remaining space you can put in sand, or the tactical tasks. Finally, you can add water — the ad-hoc things that arise. If you fail to put the big rocks in first, you will inevitably fill your bucket with just sand and water.

For Rally, the annual plan, therefore, consists of a True North, a number of Mother Strategies, and a set of Rocks. In addition, this year we introduced a new tool to help create transparency and align all the elements: the X-matrix, as described in Thomas L. Jackson’s Hoshin Kanri for the Lean Enterprise. This brought with it a further level of discipline by including the business results we’re targeting, and the measurable improvements we will use to track progress.

Xmatrixblank

As you can see from the blank template above, completing the X-matrix involves deciding on strategic goals, tactical rocks (and other departmental initiatives), measurable improvements, and business results. These are entered into the large white sections alongside each section. In addition, filling in the shaded corner cells of the X-matrix indicates the correlation or contribution between each of these elements, as well as how accountable each department will be for the tactical work. The strength of the correlation or accountability is indicated with one of three symbols according to the legend: strong correlation or team leader, important correlation or team member, and weak correlation or rotating team member. An empty cell indicates no correlation or no team member.

How Does It Work?

The agenda for the two days of Annual Planning involved exploring and defining all these pieces of the puzzle, ultimately filling in a giant X-matrix created on a wall. The picture below shows this partially completed. Taking the advice from the book, we adapted rather than adopted the technique, changing some of the terminology to better fit our context.

Xmatrixblur

Here’s what each day looked like.

Day one was focused on divergence: generating a range of ideas which could go into the initial draft of the plan. We began with a retrospective on the current year; working individually, in pairs, and then in departments, we reflected on what we’d learned that would guide our work in closing out this year and setting us up for next year. Then, the executive team gave a readout of their perspectives and introduced the proposed potential strategies for next year. This led into an Open Space with breakout sessions focused on exploration of rocks and improvements that could implement those strategies. As a result, by the end of the first day we had a good understanding of the current situation, with a variety of potential work that might be needed to meet our goals.

Day two was focused on convergence: refining all the ideas and getting consensus on a plan that could be validated. Groups initially formed around the proposed strategies to look at the plan through a “strategic lens.” Each group discussed how various rocks and improvements aligned to their strategy, and agreed on a proposal that they wanted to make for inclusion in the plan.

annualplanninggroup

In a high-energy session, the proposals were pitched to three of the executives, who accepted them (with a chime) or rejected them (with a horn). Rejected proposals were updated and re-pitched, until we ended up with the X-matrix containing the top 10 rocks and associated improvement measures, along with the strength of the correlation between all the rocks and strategies. Groups then re-formed around departments to look at the plan through a “departmental lens.” They discussed and filled in the X-matrix with the their department’s level of work alignment to the rocks.

At this point we had the majority of the X-matrix complete for the coming year. This was just a first cut, however, so another Open Space session followed to allow discussion of opportunities and concerns, and what needs to be done in the final quarter of the year to validate our assumptions — resulting in a clear set of actions which were shared with everyone.

By the end of the two days we had a clear and single page visualisation of the potential work for the year, why we were doing it, and how we would measure progress, along with a good understanding of the necessary next steps.

What Happens Next?

As an addition to our corporate planning cadence, the X-matrix was a roaring success. It both helped us be disciplined about thinking about measures and results, and gave us great visibility into how all our work is aligned. It still needs refinement, however, and the executive team will look at the final X-matrix and use it to filter and focus on which strategies and rocks can give us the best leverage in meeting our goals. We typically hold ourselves to no more than four mother strategies and we also strive to limit the number of rocks in process.

From the final plan, we’ll craft a True North statement and will begin executing. The regular cadence of quarterly steering meetings will revisit the X-matrix as a focal point to help us inspect and adapt. We’ll check business results and improvement measures and form rocks, which will start and end according to the necessity of the work and the need to make it transparent across this well-defined review cadence.

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