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A Step-By-Step Guide to Quarterly Product Planning

Quarterly product planning, or quarterly alignment, is an integral part of a responsive organization to connect OKRs with execution. Quarterly planning has become even more critical in today’s distributed environment to align teams to row in the same direction, as highlighted in the Medium post, “The Cadence,” by David Sacks, PayPal’s first COO and the founder of Yammer and Craft Ventures.

The key driver for quarterly alignment (or bi/monthly for fast-moving companies) is the evolving product focus responsive to business needs. Goals such as conversion, retention, or market expansion are almost always present for every company but vary in importance at different times. Therefore outcome-driven product operations need to adjust prioritization frameworks and associated resource plans.

Effective quarterly product planning starts with strategizing based on goals and then allocating responsively. This is critical in enabling the rest of the teams to make their prioritization decisions with this big picture context.

During quarterly product planning, product leaders and their teams align on the next phase of focus within product functions and their engineering, business, and other key stakeholders.

How Do You Perform Quarterly Product Planning/ Roadmap Alignment?

To perform quarterly product planning well, follow these 4 (+2) iterative steps:

  1. Define key goals (you could try setting product OKRs) for the upcoming quarter and their respective resource allocation.
  2. Brainstorm and prioritize product ideas against these goals.
  3. Create high-level estimates / T-shirt sizes to identify resourcing needs or bottlenecks.
  4. Break the pod to work or bring work to the pod.

Steps 2 and 3 may happen iteratively (back and forth continuously).

Then, make sure to follow these ongoing steps:

  1. Communicate.
  2. Check-in and adjust.

Let’s look at these steps in more detail below.

Step-by-Step Quarterly Product Planning

1. Define Your Key Goals and Metrics (OKRs) for the Coming Quarter

Smart companies change their focus from one bottleneck area to another due to the diminishing return on investment in previous areas. For example, in one quarter, you may be focusing on growing new accounts, and a few quarters later, the focus needs to move to retention because churn has started to affect overall growth. Using data from your business review is a good starting point in identifying goals for the coming quarter.

Here are the common questions to ask when setting goals:

  • What are the most pressing needs for the upcoming period? How should we balance the needs of new customers (sales) and existing ones (customer success)?
  • Which long-term goals should we not forget to start?
  • What are the must-have goals vs stretch goals?
  • How much are we willing to invest in each goal, e.g. 50%, 30%, 20%? A goal without resource allocation will not succeed.

Setting OKRs without associated allocation creates gaps between executive wishes and the team’s ability to deliver.

Once your product goals are defined, it’s time to prioritize.

2. Brainstorm, Align, and Prioritize Ideas to Goals

This is the time to pull your ideas out from “backlog storage” to planning. Prioritizing ideas can be done through multiple views and should always include the dimension of goals.

Other dimensions include product themes and investment categories. Adopting quantitive prioritization is a bespoke way for product decisions so everyone can have the context of why a certain initiative or feature is ranked higher than others. Some common product prioritization frameworks include RICE, ROI, the Eisenhower Matrix (Urgent vs. Important), and MoAR — metric over available resources, a more tangible proxy for ROI.

When prioritizing ideas, evaluate constraints such as commitments to clients to hit revenue/ reduce churn. Although it’s not generally the best practice to commit features by date, it’s a fact of life we often face. Having these ideas “out of place” in prioritization is a good learning tool for future behavior changes.

Brainstorm, Align, and Prioritize Ideas to Goals
Brainstorm, align, and prioritize ideas to goals in Dragonboat

3. Collect a High-Level Estimate to Identify Resourcing Needs or Bottlenecks

There are two sets of estimation – top-down (aka t-shirt size) and bottom-up (aka breaking down epics into stories and estimating each story and adding them up).

Bottom-up estimation is a waste of time at this stage because you will likely only move forward with a small subset of initiatives, if the planning is done right.

However, high-level estimation, in the unit of sprints or weeks is very important. Here are some key benefits:

  • Prevent major misalignment/ understanding between product and engineering.
  • Help identify resource needs (or bottlenecks) from within your team, other teams (including other scrum teams), UX teams, and marketing teams to secure support.
  • Allow your team to come up with a different solution to achieve the goal if it costs too many resources, takes too long, etc.

Having only part of the feature completed does not deliver value. If there is not enough support from all teams required to bring the idea to market, consider switching to a different idea that does not require bottleneck resources. Alternatively, change your product approach or find a way to complete it without engineering effort.

Use the MoAR method to further prioritize ideas competing for the same resources.

Providing estimates allows you to check your plan against your goal allocation. This is critical, but how often do we actually do it when using spreadsheets?

4. Create a High-Level Portfolio Roadmap Plan

Once you have the priority and estimate, you can put together a high-level product roadmap. It can be a good idea to create a few roadmap scenarios to compare side by side or share with stakeholders for alignment.

What if there is a resource shortage or imbalance? Then one pod (scrum team) may end up with more work and another pod will have fewer roadmap items.

Normally, business demands fluctuate for each engineering pod (one or a few scrum teams supporting a product roadmap area).

There are 3 potential solutions in this case:

  1. Each pod prioritizes work within their area — but this does not create the best value at the portfolio level due to local optimization.
  2. Break up the pods to meet the fluctuating demand — this works in theory but usually negatively impacts team dynamics and velocity.
  3. Quoting a VPE friend — “Don’t break the pod to work, bring work to the pod.” The same pod may work on different areas periodically based on needs, which is a compromise between the 2 options above.

If the planning is slightly long-term, e.g 6 months or more, a high-level plan also helps prioritize hiring or tap into on-demand resource partners if appropriate.

Now you’ve completed the first 4 steps of quarterly product planning and alignment – the next 2 steps are essential to continue the portfolio cadence to monitor outcomes and adjust to changes.

The Product Portfolio Cadence – Post Quarterly Planning

Confirm and share your plan with your team so they have the context and big picture for their decision-making.

Have product operations connect your quarterly roadmap with your team execution tools, e.g. Jira, Shortcut, Asana, or Github Issues, to gain real-time visibility of progress and forecast potential issues or risks that may warrant a revision of the current plan.

While you may build intricate spreadsheets for planning, and manually pull out data for reporting, a better option is to adopt an integrated product portfolio platform like Dragonboat. It offers CPOs, product operations, and teams the context and continuity from goals and strategies to execution, to enable effective decisions for all involved in designing, building, shipping, marketing, selling, and servicing products.

quarterly product planning in dragonboat
Portfolio Summary Report in Dragonboat

Check-in monthly (or bi-weekly) to evaluate progress, urgent requests, changes in the state of execution (delay or scope increase), or losing resources for one reason or another. The adjustment often results in a new alignment/ plan following steps 2 to 4 with “what-if scenarios” in step 3, to re-align and update your roadmap, team, and stakeholders.

Quarterly Alignment is Replacing Quarterly Planning

Is quarterly planning still relevant in today’s dynamic, fast-changing environment? The answer is a definitive yes, but with a twist. Quarterly planning should not occur only once a quarter, and its deliverable shouldn’t just be a list of projects. Instead, it should be an exercise of continuous alignment on a quarterly horizon.

Some may ask – why do you need a quarterly cadence? With Agile, couldn’t we just continue iterating on the product in sprints? This takes us back to the need for the three separate time horizons of strategy and execution within an organization.

Every organization needs a longer-term, mid-term, and near-term time horizon with their own goals and respective strategies. Quarterly planning focuses on connecting the longer-term vision (e.g. annual) with the mid-term focus (e.g. quarterly), which provides strategic guidance for the next level of iteration (e.g. bi-weekly). Quarterly alignment is for agile leaders to provide context for agile teams.

company quarterly alignment across three time horizons

Here are some of the common challenges for product teams lacking responsive quarterly alignment:

  • Disconnect – Let’s say a product or feature launched from the previous period and hit the market. The resulting business impact may or may not have been anticipated. So, the company must adjust goals and strategies subsequently. However, these strategic changes often won’t reach the team in time or with enough context, resulting in the team continuing to execute strategies from 1-2 quarters ago.
  • Poor allocation – Many companies adopt stable teams or a full-stack team model (think pods or tribes) without adjustment. However, as the business needs change, the previous allocation by team may not support current needs. Some teams end up under water with too many mission critical features while others may not have the same level of delivery pressure, leading them to focus on their locally optimized roadmap.
  • Incongruent UX – Without frequent alignment across teams and functions, silo’d decisions and prioritization happens. Dependencies are exposed. To avoid lengthy delays, teams have to create work arounds. This creates a suboptimal user experience and “products with an org structure”.

Quarterly Planning vs Quarterly Alignment

Traditional quarterly planning aims to address these challenges, but it focuses on the output of a committed list of projects. While there are merits to this deliverable, it does not fit into the fast-changing environment where the list of projects will change through the quarter.

This is why quarterly alignment emerges.

Quarterly alignment is the process of connecting the longer-term vision with sprints and activities responsively via collaboration between executives and leaders and across teams on what we want to achieve and the strategies to achieve them. The outcome is a set of initiatives (aka programs) with defined goals that empower further innovation without misalignment.

How Do You Perform Quarterly Alignment?

Here is a time-tested framework:

  1. Define the top 2-5 goals and target metrics for the upcoming quarter. An OKR framework (Objective and Key Result) is a good way to start.
  2. Brainstorm and prioritize product features, marketing and/or other initiatives to achieve these goals.
  3. Identify gaps and dependencies in achievability and/ or resources (check out how to use MoAR to prioritize).
  4. Iterate between 2 and 3 until a good enough game plan (a list of initiatives enabling your OKR’s) is in place. Learn more about the rock, pebble, and sand method.
  5. Track both work progress and OKR progress to responsively adjust your team’s focus.

Quarterly alignment is not a “build it once and rest forever” exercise. Frequently review (on a bi-weekly or monthly basis) the current trajectory against the desired outcome, and adjust the detailed activities responsively.

Clarity and alignment are critical to the success of any company. Quarterly alignment is a valuable cadence to enable it, giving your company the opportunity to align teams and products against the goals at the OVERALL company level (see the MoAR Method). This way, your teams can innovate and move fast in the same direction.

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