How to Run an Effective Quarterly Planning Session for Empowered Teams

Empowered Teams Foundations

Before diving into quarterly planning, it's essential to have a strong organisational foundation in place. Here's what you need to have in place first:

1. A Product Team, comprising the Product Manager and functional leads, that is accountable for the success of a product.

2. A number of distinct and autonomous value-streams; end-to-end flows of value within the product

3. Metrics that will be used to determine the success of each value-stream.

4. A number of Stream Teams, each assigned one or more value-streams, and therefore inheriting their success metrics.

To help to put this in context, let’s consider an airline booking system. The Flights Product Team oversees the Catalogue, Search, Booking and Experience Stream Teams.

The rest of the article assumes that these foundational pieces are in place. However, you can always do planning with your current team structures, creating the metrics and the targets during the planning session. The challenge with this is that the teams will need to build the instrumentation of the metrics as well as the features to achieve their goals, which will slow down progress.

Pre-planning

The Quarterly Planning process begins one to two weeks before the main planning session with crucial pre-planning alignment activities. During this period, the Product Team review the strategy and vision to determine if any changes are required based on market conditions and business goals. This review also helps them to agree on the risk appetite for the Stream Team for the quarter: whether each Stream Team should target ambitious stretch goals with higher risk of failure or more conservative incremental goals.

This vision, strategy, and risk appetite is then shared with the Stream Teams, who analyse their past performance and use the opportunities they’ve identified in their research to create suggested targets for their metrics.

Quarterly Planning Session

The full Product Team and all of the Stream Team are required to attend the Quarterly Planning Session. This is an incredibly expensive meeting so every effort should be made to ensure that it runs as smoothly as possible.

The Product Team begins the meeting with a quick update on the product performance and progress against the annual plan and the key priorities for the upcoming quarter. Afterwards, each Stream Team presents their proposed objectives and key results (OKRs) for the quarter, accompanied by the opportunities they’ve identified that they intend to pursue to achieve the goals.

The Product Team will likely ask clarifying questions to ensure that they understand the approach each Stream Team is planning to take. If the Product Team believes a Stream Team's goals are too conservative, they will challenge them to aim higher. Conversely, if the goals seem appropriate or potentially too ambitious, the Product Team will probe further to ensure they're not being set up for failure.

Outcomes over Outputs

Wait. This is very output focussed. Aren’t we supposed to be all about outcomes over outputs? Yes, but you achieve outcomes with outputs. The goal is not to lock in the scope of what teams will work on. The goal is to confirm that the Stream Team have done the due diligence of research and that they have a potential path to achieving their outcomes. The Stream Team is free to pivot if their initial ideas fail to deliver the expected results.

Planning Challenges

Some common challenges can arise during a session that may impact the targets that teams define.

Cross-team initiatives

Some Stream Teams may identify promising initiatives that require support from other Stream teams. We need to set a very high bar for these initiatives. At times they will be required, but we need to ensure we are not falling into the same trap of big project thinking. The proposing team must show a significant amount of evidence from the testing that they have done and backed with solid customer evidence. Data is critical here.

In essence, what is being proposed is a project. One or more teams will lose their autonomy to support the initiative. Therefore, the benefits of this project need to exceed the benefits of the teams working independently. Having all of the Stream Teams in the planning session can be a benefit here. They can hear first hand what other teams are working on and have the opportunity to query a suggestion should another team request their assistance. This helps to get agreement as quickly as possible without wasting time on back-and-forths.

In cases where cross-team collaboration is needed, the Product Team will need to sponsor the initiative as a project. This means that one Product Team member will become a dedicated single-threaded leader for its duration, offloading other responsibilities for the duration of the project.

Teams have no research

When a team is freshly created, or when a new strategy or metric is proposed, a team might not have relevant research to back up any targets that they could set for their metrics. In such cases the Product Team will need to set initial learning goals for the first month and then schedule a follow up, dedicated session with the team to agree on targets for the remaining 2 months. The purpose is to avoid pressuring the teams to jump straight into delivery, which will increase their risk of failure.

Teams are not independent

Without independence, teams cannot be truly accountable. When a team is first created, it is likely that their code and scope was previously being looked after by another team. This means that they will not have code or release autonomy. Instead of giving these teams product metrics, they should be assigned processes metrics around lead time (being able to go from code to production applications as quickly as possible) and instrumentation (reporting on key metrics). This focus allows them to exfiltrate themselves from the old system and have the reporting in place to begin baselining their core metrics.

In the book Working Backwards, Colin Bryar and Bill Carr, give the example of when Amazon started experimenting with 2 pizza teams. They found that teams could take up to 9 months to isolate themselves effectively before they would start delivering business value. Other teams tried to start delivering value straightaway but the blockers in their process ultimately led them to fail. The teams that took the time to remove the blockers excelled.

Key Success Factors

Planning is only as successful as the execution. For this Stream Teams need to really own their targets. If the team feels like they are being forced to accept targets that they don’t agree with, then they won’t try as hard to achieve them as if they had set the targets themselves. Sometimes, people may actually even sabotage efforts to prove their point, whether intentionally or not.

The Product Team also needs to ensure that they are setting the teams up for success. If targets don’t align with the risk appetite then they need to be challenged. Equally, Product Teams need to validate that Stream Teams have everything they need to achieve success. In the book, Turn the Ship Around, David Marquet described this leadership style as Certify, Don’t Brief. What he means is that leaders shouldn’t tell teams exactly what to do, but they should not abdicate responsibility completely either. They should certify that the ideas that teams have are reasonable and have the best chance of succeeding.

Conclusion

Ultimately, quarterly planning in empowered teams requires striking a delicate balance between autonomy and alignment. The most effective planning processes define clear intent behind goals, encourage thoughtful trade-offs and prioritisation, and provide adequate room for learning, particularly for new teams. This approach enables teams to focus on what truly drives impact - moving beyond simple task completion to achieve meaningful progress toward product success.