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, author and Harvard University Professor
Strategic Themes
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.
Details
Enterprise executives and Lean Portfolio Management (LPM) work together to analyze various inputs to establish a set of strategic themes (Figure 1) for each SAFe Portfolio. These differentiated business objectives communicate aspects of strategic intent from the enterprise to the portfolio.
Strategic themes align the business strategy of the Enterprise (or Government agency) to a SAFe Portfolio, as Figure 2 illustrates. Since they reflect enterprise strategy, they tend to be somewhat stable for a period. Annual or twice-annual updates seem to work for most enterprises.
The Influence of Strategic Themes
Since strategic themes influence portfolio strategy and provide business context for portfolio decision-making, they affect many aspects of the SAFe implementation, as illustrated in Figure 3.
The following sections describe how strategic themes influence each aspect shown in Figure 3.
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 Kanban system, where they:
- Guide the identification, success criteria, and prioritization of epics in the funnel and ready states
- Warrant reference and consideration in the Lean business case
- Influence the definition of the Minimum Viable Product (MVP)
Vision and Solution, ART, and Team Backlogs
Strategic themes influence the vision and backlogs for development at every level. They help determine the values of Weighted Shortest Job First (WSJF) and epic priorities. Solution and Agile Release Trains ARTs epics that flow from the portfolio, or arise locally, are also influenced by the current strategic themes. Due to their importance, they will often be presented repeatedly by the Business Owners 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, which determine the investment and allocation of people needed to accomplish the strategic intent. They trigger the following kinds of questions:
- Do the current value stream investments reflect changes to the business context?
- Are the current value streams the right ones? Should we create a new value stream or decommission an existing one?
- Do the guardrails provide the proper guidance for investments?
- Is there sufficient funding for operations, infrastructure, maintenance, and support activities?
- Are solution investments aligned with the time horizon guardrails to prevent starving the future by over-investing in today or missing near-term opportunities while pouring too much money into the future?
Defining Strategic Themes
Strategic themes are a vital tool for communicating aspects of the strategy to the entire portfolio. LPM can define strategic themes with a simple phrase or using the preferred approach of Objectives and Key Results (OKRs). These themes should be a simple, memorable message that influences everyone involved in solution delivery.
Below are a few examples of strategic themes objectives:
- Appeal to a younger demographic (retail clothing manufacturer)
- Cloud and mobile-first (a financial institution)
- Implement product support for trading foreign securities (a securities company)
- Lower warehouse costs (an online retailer)
- Implement single sign-on across applications (independent software vendor)
OKRs help “provides a simple approach to create alignment and engagement around measurable and ambitious goals.” [2]. Figure 4 provides an OKR example.
There are two primary fields in the OKR template:
- Objective – a memorable description of what the portfolio wants to achieve. These objectives should be short, inspirational, and challenging.
- Key results – are measurable success criteria for tracking progress towards the objective. Each strategic theme should have two to five key results.
The goal of using OKRs for strategic themes is to define and track their progress through concrete, specific, and measurable actions. “OKRs are frequently set, tracked, and re-evaluated, usually quarterly. OKRs exist to create alignment and to set the cadence for the organization. The goal is to ensure everyone is going in the same direction, with clear priorities, in a constant rhythm.” [1]
Measuring Progress against Strategic Themes
When strategic themes are defined using OKRs, it offers a way to continually measure progress, allowing the organization to take the necessary corrective actions or amplify successes.
Each key result is measurable and should be gradable on an explicit scale, typically a percentage. However, because changes in strategy take time to apply, a quarterly or monthly cadence for measuring and reporting against the key results is recommended.
The Strategic Portfolio Review is the ideal event to reflect on the progress of themes. Figure 5 shows a set of OKRs measured quarterly.
Learn More
[1] Castro, Felipe. The Beginner’s Guide to OKRs. https://felipecastro.com/en/okr/what-is-okr/
Last update: 14 November 2022
