Innovation distinguishes between a leader and a follower. —Steve Jobs
Strategic Themes Abstract
Strategic Themes are specific, itemized business objectives that connect a SAFe Portfolio to the evolving Enterprise business strategy. They provide business context for decision-making within the portfolio and influence investments in Value Streams and serve as inputs to the Economic Framework, Budgets, Portfolio, Solution, and Program Backlog decisions.
Strategic themes need not restate the obvious, as most elements of a portfolio vision are understood by context; portfolio stakeholders generally know quite well what the portfolio is for, and they establish and manage their own mission and Visions. Rather, strategic themes provide the enterprise with the differentiators going forward from the current state to a future state. They help drive innovation and competitive differentiation that is achievable only via effective portfolio solutions. Strategic themes are best created as a result of a structured and collaborative strategic planning process—one that involves enterprise executives and fiduciaries as well as key stakeholders from each portfolio.
Strategic Themes are business objectives that provide strategic differentiators that highlight changes to the Enterprise strategy that affect a particular solution portfolio. They provide one of the major communication protocols between the enterprise and its solution portfolios, as highlighted in Figure 1.
Formulating Strategic Themes
Defining strategic themes is an exercise in strategy formulation, but in the individual SAFe portfolio context. In accordance with the guidance from the enterprise, strategic themes are an output of a collaborative process, a process whereby the enterprise portfolio stakeholders work with portfolio stakeholders to systematically analyze a set of inputs before arriving at conclusions, as is illustrated by Figure 2.
Inputs to that process typically include the business mission, financial objectives and constraints, competitive environment, portfolio context and more. (This is described further in Enterprise).
Some examples of strategic themes are:
- Appeal to a younger demographic (online retailer)
- Implement product and operational support for trading FOREX securities (securities company)
- Standardize on three software platforms
- Lower warehouse costs (online retailer)
- Establish single sign-on from portfolio applications to internal enterprise apps (independent software vendor)
Strategic themes are an important tool for communicating strategy to the entire portfolio. They provide a simple, memorable reference frame and should permeate the thinking of everyone involved in Solution delivery.
Strategic Themes Influence the Portfolio Vision
Strategic themes are primary inputs to the portfolio vision and serve as elements of the Economic Framework, affecting Value Streams and Agile Release Train budgets, the Portfolio Backlog, and individual ART vision and Roadmap, as is illustrated in Figure 3.
Each of these aspects is described in the paragraphs below.
Strategic themes may have a significant impact on the economic framework, where they can affect any of the major parameters, including development/cycle time, product cost, product value, development expense, and risk.
Strategic themes heavily influence value stream budgets, which provide the spending and personnel allocations necessary to accomplish the portfolio vision. In making these allocations, these questions should be considered:
- Do the current investments in value streams, and ARTs within the value streams, reflect the changes to the current business context?
- Are we investing the appropriate amounts in a) new products and services, b) extension of the capabilities of current products and services, and c) maintenance and support activities?
- What adjustments should be made given these new strategic themes?
Strategic themes provide decision-making filters in the Portfolio Kanban system, thereby influencing the portfolio backlog. Alignment to strategic themes:
- Impacts the identification, success criteria, and prioritization of Epics in the funnel and backlog states
- Warrants consideration and discussion in the lightweight business case in the analysis state
- May impact how epics are split and implemented in the implementation state
Vision and Priorities
Lastly, value streams and trains also operate fully within the context of the portfolio vision, so evolving strategic themes may directly impact them. Here, Product and Solution Management applies strategic themes to influence the vision and roadmap and to drive attributes of WSJF prioritization for items in the Value Stream and Program Backlogs. Solution and ART epics that flow from the portfolio, or arise locally, are also influenced by the current themes. In addition, strategic themes provide an important means of conceptual alignment between the trains and, due to their impact, will often be presented by the Business Owners during PI Planning.
Measuring Progress Against Strategic Themes
Strategic themes communicate differentiated strategic intent for the enterprise. Providing success criteria for strategic themes can provide a mechanism for understanding progress towards the intent. However, many desirable measures associated with the accomplishment of strategic intent are trailing indicators. Success factors such as ROI, new markets penetrated, etc, can take a long time to achieve. In their place, the enterprise needs feedback via early indicators, many of which are not financial in nature. Lean enterprises apply innovation accounting  to address this challenge. Innovation accounting is a thoughtful look at what early indicators are likely to produce the desired long term results, followed by implementing the tooling, functionality, testing or other mechanisms to collect that data.
In addition, certain success criteria can be investment or activity based. For example, an online retail store might want to “reach a younger demographic.” In this case, success criteria could be a mix of investments, activities, and early indicators. A first learning milestone might simply be to test the hypothesis of whether extending online capabilities to mobile platforms would appeal to the target audience; this could perhaps be measured simply with initial feedback from focus groups. Based on that, a second step might be to increase the budget for the mobile teams. In parallel, a User Experience-oriented Epic could be used to capture the age of the user across all purchasing points, in order to start trending the data.
Strategic Theme success criteria provide learning milestones that allow the portfolio to understand the solutions involved, validate business and technical hypotheses and where necessary, pivot towards a better solution. The PI cadence offers an excellent time box for experimenting with new approaches, and gathering the feedback needed to show that investments in new strategic themes are likely to produce the desired, long term results.
Last update: 23 November 2015