Sound strategy starts with having the right goal. Strategy is about making choices and trade-offs; it’s about deliberately choosing to be different.
—Michael Porter, paraphrased from “What Is Strategy?” [1]
Strategic Themes
Definition: Strategic themes are portfolio-level business objectives that provide competitive differentiation and strategic advantage. They provide business context for portfolio strategy and decision-making, representing aspects of the enterprise’s strategic intent.
Strategic Themes are a vital tool for communicating critical business objectives to Agile Teams and ARTs, aligning their purpose with the purpose of the broader enterprise. They provide much of the organizational clarity that fuels effective decentralized decision-making and ensure that Value Streams are driven by measurable business outcomes.
This article describes strategic themes and explains the process of formulating and operationalizing them within a SAFe Portfolio.
詳細
Strategic themes connect the enterprise strategy to a portfolio, as shown in Figure 1. They distill strategic factors such as the enterprise vision, competitive environment, and existing portfolio context into concise, actionable, measurable goals. Strategic themes are best stated in Objective and Key Result (OKR) format. Written in plain business language, these OKRs say what the portfolio will pursue, thus providing decision-makers and contributors at all levels the clarity needed for decentralized decision-making.
Portfolio leaders use strategic themes to steer the portfolio and to communicate to ARTs and teams the value of Solutions to the enterprise. Similarly, ARTs and teams maintain alignment with business objectives by referencing strategic themes as they define and deliver work in the form of Epics and Features.
Keeping strategic themes prominent ensures all decisions are connected to the enterprise strategy, preventing portfolio outcomes from drifting away from intended business results.
Collaborating on Strategic Themes
Enterprise executives, Enterprise Architects, Lean Portfolio Management (LPM), and portfolio stakeholders—such as advisers, strategists, and financial fiduciaries—collaborate on developing strategic themes (Figure 2). Together, they have the strategic, commercial, and technical expertise required to translate the enterprise strategy into a winning portfolio strategy.
These leaders gather key inputs, synthesize a portfolio strategy that enables the enterprise strategy, and craft strategic themes to guide the Agile teams and ARTs in the portfolio. The group meets regularly to measure, adjust, and refine strategic themes. Many organizations formulate new strategic themes annually, as well as decide which ones should persist for another year.
The leaders noted above are responsible for the success of the portfolio. Thus, their participation in creating strategic themes is an essential leadership responsibility and should not be delegated.
Formulating Strategic Themes
Strategic themes have their genesis in enterprise vision and strategy. Though the primary focus of SAFe is building solutions rather than crafting enterprise vision and strategy, the SAFe delivery organization must understand both to be an effective partner in achieving them. Strategic themes are aligned with enterprise vision and strategy through the process of portfolio strategy formulation.
Figure 3 shows the six key inputs that provide the strategic, commercial, and technical insight needed to formulate a portfolio strategy. A description and example for each is provided below.
Enterprise Vision – This is the north star that ensures all parts of the organization are aligned. It answers, “Why do we exist?” For example, Amazon exists “to be Earth’s most customer-centric company.” Netflix exists “to entertain the world.” The organization’s highest-ranking executives craft the enterprise vision. It is long-lived, typically only changing after a significant event, such as a new CEO, a merger, a major acquisition, or a business model shift.
The enterprise vision includes the overarching core values, purpose, and mission. Core values are the uncompromising beliefs that serve as a foundation for the organization. The purpose is the long-lasting reason an organization exists. The mission is the compelling, clear, challenging, yet achievable goal that creates energy and focus across the enterprise. Together, these establish a strong ‘why’ for the company.[2]
Enterprise Strategy – Outlines how the company will achieve its mission through its products and services, customers, financial position, people, business model, and partnerships. It is a directed course of action to put a company in a better position to win than its competition or, if a public or non-profit organization, to deliver on its mission. The enterprise strategy answers, “What will we do to win the market?” For example, a strategy to expand into new markets could be expressed as “increase market share by 3% in targeted emerging markets through strategic partnerships and innovative product offerings.”
Enterprise executives craft and periodically refine the enterprise strategy in response to changing business needs. The strategy can be developed internally or with trusted advisors. It will generally persist for several years and manifests as OKRs or another format that suits the enterprise. Typically, a subset of the enterprise strategy relates to delivering digitally enabled solutions, which is the domain of SAFe. This subset must be identified and incorporated into portfolio strategy formulation and its related strategic themes.
Portfolio context – Describes the current state of the portfolio’s solutions and its performance as measured by value stream KPIs. This is the baseline for developing new epics and features. Portfolio leaders are the experts able to answer, “What is our starting point?” For example, the portfolio context for a health insurance company would likely be its ecosystem of solutions supporting selling insurance products, enrolling new customers, administering investment vehicles, servicing accounts, and processing claims.
Competitive environment – Strategies for evolving products and services cannot be formulated in a vacuum. Portfolio leaders answer the question, “What competition do we face?” by drawing on competitive analysis that identifies the most significant threats to the business and opportunities to grow existing market share. For example, analysis for a financial services company might reveal that a robust in-person agent network supports its position in suburban communities. Yet, the lack of digital capabilities limits its ability to compete in rural communities.
Financial goals – Whether measured in revenue, profitability, market share, or other metrics, financial goals used to evaluate portfolio solutions are an explicit input to portfolio strategy formulation. Every enterprise is guided by a defined set of financial targets that answer, “How do we measure company performance?” For example, a financial goal might be to “achieve a 10% year-over-year increase in revenue.”
Distinctive competence – Effective strategies naturally leverage the unique advantages that differentiate the organization’s solutions from other solutions in the market. The enterprise’s competitive edge is clarified by answering, “What are we better at than anyone else?” Portfolio leaders should consider how the portfolio strategy can leverage competitive strengths while addressing gaps. For instance, a telecom company may have unparalleled expertise in building and maintaining next-generation network infrastructure but a comparative weakness in customer support capabilities.
Synthesizing the Portfolio Strategy
Based on the above inputs, enterprise and portfolio leaders and stakeholders establish the portfolio strategy and write strategic themes. While there is no set way to facilitate these discussions, arriving at these differentiated business objectives often involves an iterative cycle of ideating, refining, and finalizing.
Strategic themes are written in plain business language, with clear measures. If achieved, they will deliver business results that advance the enterprise strategy. They can be written as a simple phrase or using the preferred approach of OKRs as per the example in Figure 4. OKRs provide a simple, structured approach to creating alignment and engagement around measurable and ambitious goals. Every objective is accompanied by three to five key results that often represent a mix of leading and lagging indicators. For further guidance on writing strategic themes in OKR format, please see the OKR article.
In addition to strategic themes, initial value stream budgets result from portfolio strategy formulation. These budgets fund and support the people who build the solutions that bring the strategy to fruition. Further information on value stream budgets can be found in the Lean Budgets article. Strategic themes and value stream budgets provide the people, resources, and clarity to deliver strategic outcomes.
Steering the Portfolio
“Without a strategy, execution is aimless. Without execution, strategy is useless.”[3]
Strategic themes guide behavior and decision-making throughout the portfolio, ensuring that Agile teams and trains are aligned with the portfolio and enterprise strategies. That influence begins with portfolio-level decision-making and events, as illustrated in Figure 5, which in turn steer all aspects of the SAFe implementation.
The following sections describe how strategic themes steer each of these portfolio elements.
Portfolio Vision and Backlog
Strategic themes are direct inputs to the Portfolio Vision. They may influence the solutions, partners, key activities, customer segments, revenue streams, and other business model elements in the portfolio canvas. They also provide insight into the epics necessary to achieve the vision, serving as decision-making criteria in the portfolio backlog.
ソリューションビジョン
Strategic themes influence the Solution Vision and backlogs at every level. They help determine the values of Weighted Shortest Job First (WSJF) and epic priorities. The current strategic themes also influence epics that flow from the portfolio or arise locally. Due to their importance, Business Owners present them during PI Planning. Moreover, strategic themes provide vital conceptual alignment across ARTs and Solution Trains.
Value Stream Budgets and Guardrails
Strategic themes profoundly influence value stream Budgets and Guardrails, determining the investment and allocation of people needed to accomplish the strategic outcomes. They help to ensure that budgets are allocated according to their value to the business and that portfolio investments address the right mix of short-term opportunities and long-term strategies.
Measuring Progress against Strategic Themes
Strategic themes should be frequently measured and evaluated, whether written as OKRs or in another format. Figure 6 offers an example of the progress of each key result measured and graded over time.
Typically, strategic themes are measured quarterly, often in the Strategic Portfolio Review. Thus, strategic themes offer a way to continually monitor progress, allowing the organization to amplify successes or take necessary corrective action.
まとめ
Strategic themes provide business context for portfolio strategy and decision-making, connecting value stream efforts with the intent of the broader enterprise. They are carefully crafted through the collaborative process of portfolio strategy formulation. This process synthesizes the current enterprise and portfolio contexts into measurable objectives that reflect the portfolio’s most important strategic, commercial, and technical goals. They then steer the thoughts and actions of Agile teams, ARTs, and stakeholders throughout the portfolio toward realizing compelling business outcomes.
詳しく学ぶ
[1] Porter, Michael E. What Is Strategy? Harvard Business Review, November-December 1996. Retrieved October 12, 2023, from https://hbr.org/1996/11/what-is-strategy [2] Collins, Jim. BE 2.0 (Beyond Entrepreneurship 2.0): Turning Your Business into an Enduring Great Company. Portfolio, 2020. [3] Widely attributed to Morris Chang, founder and former CEO and Chairman of Taiwan Semiconductor Manufacturing Company. [4] Doerr, John. Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Portfolio, 2018.Last Update: 30 October 2023