Planning Horizons: Decision-making within Agile Frameworks

Organizations need to plan, it’s not a “nice-to-have option”, and they need to do it effectively at multiple levels. In the end, this planning needs to feed an enterprise’s ability to do financial forecasting of costs, cash flows, budgets, etc. A company that cannot plan will most likely not understand what it’s doing with its assets, and inviting a lot of waste in its processes. Yeah, planning IS essential.

As we help our clients through their transformations, we must keep their planning horizons in mind and always in our sights.

Planning Horizons

A planning horizon is the time period over which effective decisions can be made to support organizational activities, for instance delivery of features, customer support, market-reporting requirements/filings, R&D investment, even budgeting and financial planning. Each horizon operates on a different time scale, which is why we talk about multiple horizons, but in my experience companies tend to operate in 3:

  1. Tactical horizon – what I need to know to enable decisions in a timeframe measured in weeks, immediate future
  2. Product/Project horizon – what I need to know to enable decisions in a timeframe measured in quarters
  3. Strategic horizon – what I need to know to enable decisions in a timeframe measured in years, green field of ideas

Clearly the level of detail needed to enable effective decisions for each horizon is different. I am purposefully not defining the exact number for each one. That really does depend on the company in question.

If we are talking about agile organizations working in some kind of time-boxed framework (like Scrum for instance), then the horizons can be defined in terms of those time boxes using concepts of iterations, releases and years, respectively.

When implementing agile frameworks sometimes we lose track of the need for organizations to plan ahead in the cloak of allowing that information to emerge over time. We understand that eventually it will, but often some information is really needed much earlier. We talk about trust, and a leap of faith that it will come, but we don’t meet our client’s need where they are right now: in a state of flux between change states.

I want advocate not losing sight of what is important to the client (organization, division, department) right now, to help them through the change they have undertaken. This is a basic coaching tenet we hold: meet the client where they are now, so we can help them move to where they need/want to go.

3I/3R/3Y Model

To that point, I usually think in terms of a simple 3I/3R/3Y model, where a tactical horizon extends from now to about 3 iterations (3I) and deals with what I’m trying to get done in the now. A yearly product horizon in most organizations lines up with a quarterly release schedule, so that is about 3 releases (3R) in the future. Finally, the strategic horizon deals with what is the next new thing we have to consider to remain competitive for the next few years. Some companies try to plan 5 years in advance, but given the current rate of technological change, I think 3 years (3Y) turns out to be more realistic (and that can be argued should be shorter still! – not going there).

How many times have we heard in companies that “we don’t know what we are going to work on the next sprint until sprint planning”?

This simple 3I/3R/3Y model gives us nice horizons for the tactical, product and strategic planning that needs to take place. All healthy organizations are able to forecast with confidence along those timeframes.

Your Effective Planning Horizons

So next time you look, ask yourself, what are my effective planning horizons? And, how do they support the enterprise? How long can it wait for the emergence of the information really?

I am curious to find out from folks out there if they observe these same trends, and how they have shaped their companies.