It's great to focus on the future as the year comes to a close, but don't forget to spend some time considering the past.
The old quote that “those who cannot remember the past are condemned to repeat it” has been heard by every student of history or consumer of political oratory after adolescence. The lesson of the quote, that past events hold relevant lessons for the future, is a good lesson that should not be lost on technology leaders.
As the year ends and a new year begins, the focus of most organizations is on letting go of the past as quickly as possible. Managers are struggling to close budgets, finalize projects, and hope that year-end reports and processes are completed successfully. Likewise, leaders are focused on closing the literal and figurative books on the past as quickly as possible so they can start the holidays and focus on finishing their strategy for the coming year.
A strategy without a past is no strategy at all
This zeal for the future often extends to the strategic planning exercises that accompany a new calendar year. Maybe it's human nature to close off the past. I've seen too many leaders ignore any introductory elements of their strategic plan that mention the past year's successes, failures, and ongoing efforts.
Whether it is a formal part of your strategic plan or an exercise that serves as input to it, you should begin your strategic planning with a formal and diligent review of the past.
This review must include at least 3 elements:
- An analysis of the market and the external environment over the last 12 months. What significant changes have occurred in technology, markets and society? Were these changes expected evolutions, like a new iteration of a technology, or profound and unexpected changes, like the COVID pandemic?
- How did your portfolio of strategic projects perform last year? Which projects were successful and which failed or were abandoned? What were the main causes of successes and failures? Were they due to an internal reason, such as budget, or to an external factor that you articulated in your analysis of the external environment?
- Are there any thematic elements in your analysis? For example, have you had a lot of success on some projects due to a new or existing partnership? Did you make a “big bet” on a program that assumed certain market conditions that later changed? Were there important resources missing that made it impossible to execute some projects?
Let's look at each of these elements in more detail.
Reflecting on the environment
Long-term strategies and plans cannot exist in a vacuum, a fact that has been dramatically illustrated over the past two years when COVID has imposed lasting changes on everything from how and where we work to the reliability and design of our supply chains. Spending time in your annual review to examine changes in the environment is not just a study of history, but an examination of how your strategy has fared in relation to environmental elements that were predicted and out of the question.
Understanding environmental events inside and outside your company also provides critical information to determine how your strategy is performing when accounting for these events. For example, a strategy to implement new technologies to support live in-person events, launched in early 2020, would likely not be successful, no matter how wonderful the technology or how skilled the implementation team.
However, it is often very easy to point the finger at external events as the reason why a strategy did not meet expectations. It's also easy to lose elements of a strategy that allowed you to progress despite unfavorable external circumstances.
By analogy, consider a racing driver who clocked a time 5% slower than the usual average. This may cause concern unless one considers that the race took place on a rainy day, the car was using a new tire compound, and the driver ended up winning the race. Without these historical references to internal and external environmental factors, the 5% decrease in performance could be considered substandard rather than a positive result and a proof point for new tire technology.
Analyzing Your Portfolio Performance
Most organizations already have tools and methods to track the performance of their strategic portfolio, but are unable to look much beyond financial and delivery time metrics. Ask yourself whether certain types of projects tend to perform differently than others or whether you are grouping your portfolio correctly.
Groupings based on organizational structure, such as grouping all marketing department projects together, may make sense organizationally, but they likely ignore other critical variations. For example, most of your cloud migration efforts may be struggling, but grouping them by organizational unit obscures this fact.
Try viewing your portfolio's performance from different angles, such as organizational unit, key technologies deployed, or risk levels. Ultimately, you are looking for a grouping factor that indicates an area where you have created internal “best practices” that can be scaled to other parts of the portfolio, or areas that are struggling and could be improved through common mitigations.
Search for themes
With the time-consuming efforts of the previous 2 steps completed, research the topics. You may find that certain elements of your portfolio have performed well, even if the internal or external environment has changed drastically. See if there is a common technology that has helped speed up delivery or if new management methodologies like Agile are delivering what they promise.
Even one or two main themes can provide critical information that will inform your emerging strategy for the coming year. These themes can also serve to identify deficient, missing capabilities, or perhaps emerging assets that should play a role in your next strategic plan.
This retrospective is not intended to serve as a “witch hunt” to find faults and punish those associated with them, but as a means of learning from the past. Ultimately, this learning allows your organization to improve its ability to deliver in the future. Just like an athlete who regularly reviews their training history and current performance, looking for themes to inform their next training cycle, your organization can also increase its performance through an annual review that supercharges the next planning cycle. strategic.
