In the dynamic landscape of modern business, agility and adaptability are prerequisites for success. As organisations grapple with evolving market conditions, fluctuating customer preferences, and rapid technological advancements, traditional long-term planning often proves inadequate. Enter Adaptive Planning Horizons, a strategic framework gaining traction across industries. In this article, we explore the concept of Adaptive Planning Horizons and provide an insightful breakdown of three key horizons: 1-3 months, 4-18 months, and 19-36 months.
You might ask, what about beyond 36 months?
Planning for more than 36 months necessitates continuous refinement due to the inherent uncertainty and rapid pace of change in today’s business environment. While long-term plans are essential for providing a sense of direction and overarching goals, their extended timeframes can make them susceptible to obsolescence.
🔍 What is Adaptive Planning Horizons?
Adaptive Planning Horizons is a forward-thinking methodology that recognises the need for flexibility in long-term planning. It empowers businesses to align their immediate actions with broader strategic objectives while staying adaptable to evolving circumstances.
By continuously refining long-term plans, organisations ensure that they remain relevant and adaptable to emerging trends, market shifts, and technological advancements. This iterative approach allows businesses to pivot as needed, seize new opportunities, and effectively mitigate risks, ultimately increasing their chances of long-term success in an ever-evolving landscape.
Embracing Adaptive Planning Horizons
Adaptive Planning Horizons represent a paradigm shift in how businesses strategise for the future. It offers a structured yet flexible approach to align short-term and long-term goals, allowing organisations to swiftly respond to changing circumstances. With this practice, companies can enhance their agility and responsiveness, thus capitalising on emerging opportunities and mitigating risks. Adaptive Planning is an integral practice of Adaptive Value Engineering.
Adaptive Planning Horizons – A better way to project and corporate planning
Horizon 1 (1-3 months) – High Confidence, High Value
Confidence in Strategy : Clear understanding of “What”
Horizon 1, encompassing the immediate 1-3 months, necessitates a keen focus on executing established plans and responding to short-term market dynamics. Choosing and prioritising high value items which creates high confidence in strategy. This also means the teams have better understanding of “What” to build or do which enables shared understanding.
Confidence in Execution: Predictability
Statistics indicate that businesses operating within Horizon 1 exhibit a remarkably high confidence level (approximately 90%) in executing co-created plans. This heightened confidence stems from the granular focus on operational excellence, where teams are meticulously aligned to achieve defined objectives.
Within Horizon 1, the scope of work remains well-defined and stable, boasting an 85% certainty rate. This high level of scope certainty empowers teams to make precise decisions and commitments, reducing the likelihood of costly deviations. It doesn’t mean everything is fixed and can’t change. It simply means we know the scope we are delivering and we can adjust if required with known tradeoffs.
Many organisations use quarterly planning events to plan their Horizon 1, however, they lack adaptive planning tools. They simply think once done, they will get those plans delivered. Even though Horizon 1 gives an impression that we are almost certain, we must utilise bottom-up planning events such as Sprint Planning (if you are using scrum) or Weekly Planning / Release Planning etc. to ensure the plan continues to stay relevant and value driven.
Horizon 2 (4-18 Months) : Moderate Confidence, Moderate Value
The Strategic Landscape
Extending the planning horizon to 4-18 months, Horizon 2 demands a strategic mindset. Organisations employ inception workshops or strategy workshops during this phase to chart the course for the mid-term future. Key initiatives and projects are identified to seize emerging opportunities and navigate evolving challenges.
Confidence in Execution
MASSIVUE’s research suggests that confidence in Horizon 2 hovers around 70%. While organisations possess a clear strategic direction, this horizon’s longer timeframe introduces a modicum of uncertainty. However, by consistently reassessing strategies and maintaining adaptability, businesses can sustain this confidence level.
Horizon 2 presents a moderate scope certainty rate of approximately 70%. Organisations must recognise that scope within this horizon may experience some changes due to evolving market conditions and customer preferences. Thus, flexibility remains paramount.
Horizon 3 (19-36 Months)
The Visionary Quest
Horizon 3 casts a gaze into the distant future, spanning 19-36 months. Organizations in this phase engage in workshops such as the North Star Workshop or Product Strategy Workshop to define aspirational goals and overarching strategies. This horizon centers on innovation, long-term market trends, and emerging technologies.
Confidence in Execution
MASSIVUE’s analysis indicates that confidence in Horizon 3 is comparatively lower, averaging around 50%. This lower confidence arises from the extended timeframe and the increased uncertainty associated with long-term predictions. Yet, maintaining a vigilant eye on external factors and the flexibility to adapt strategies allows businesses to uphold this confidence.
Horizon 3 is characterized by significant scope uncertainty, approximately 40%. The distant future inherently implies greater fluctuations, necessitating an adaptive approach to accommodate evolving trends and nascent opportunities.
The Value of Adaptive Planning
Adaptive Planning Horizons offer a profound value proposition to businesses. According to MASSIVUE’s recent survey, organisations that embrace Adaptive Planning experience the following benefits:
- 40% Faster Decision-Making: The agility fostered by Adaptive Planning allows organisations to make critical decisions 40% faster, translating into a competitive edge in dynamic markets.
- 25% Increase in ROI: By continually aligning strategies with market realities, businesses report a substantial 25% increase in return on investment compared to traditional planning approaches.
- 60% Better Risk Mitigation: Adaptive Planning equips organizations to identify and address risks more effectively, resulting in a 60% reduction in the impact of unforeseen challenges.
Adaptive Planning Horizons – Value for Leaders
Partner with MASSIVUE for Consulting and Coaching
Incorporating Adaptive Planning Horizons into your strategic framework is pivotal in thriving amidst uncertainty. For comprehensive guidance and expert coaching throughout your planning events and broader product organisational needs, look no further than MASSIVUE. Our seasoned professionals are well-versed in adapting strategies to dynamic environments.
Contact MASSIVUE today to harness the transformative power of Adaptive Planning and ensure your organization remains at the forefront of innovation and resilience.
Statistics are based on a MASSIVUE’s survey conducted in 2023, encompassing a diverse range of industries and organisations. Results may vary based on specific contexts and implementation strategies.