Innovation distinguishes between a leader and a follower.
Strategic Themes are differentiating, specific, and itemized business objectives that connect a portfolio to the strategy of the enterprise. They provide business context for decision-making, and serve as inputs to the vision, budget, and backlogs for the Portfolio, Large Solution, and Program levels.
The primary purpose of strategic themes is to drive portfolio innovation and differentiation.
Strategic Themes are business objectives that provide differentiators that highlight changes to the Enterprise strategy affecting a particular solution portfolio. They are one of the major communication protocols between the enterprise and its solution portfolios, as Figure 1 illustrates.
They don’t need to restate the obvious, as most elements of a portfolio vision are understood by context. (Portfolio stakeholders know quite well what the portfolio is for, and they establish and manage their own mission and vision.) Rather, strategic themes provide the enterprise with the differentiators to move from the current state to a more desirable, future state. They help drive innovation and competitive differentiation achievable only through effective portfolio solutions.
Formulating Strategic Themes
As described in the Enterprise article, strategic themes are best created through 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 an output of a collaborative process in which the enterprise stakeholders work with portfolio stakeholders to analyze a set of inputs before arriving at conclusions, as illustrated by Figure 2.
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 tool and should influence everyone involved in Solution delivery.
The Influence of Strategic Themes
Strategic themes are primary inputs to other portfolio elements. They affect the Portfolio Backlog, Value Streams and Agile Release Train (ART) budgets, Solution Train and ART Vision and Roadmap, and the Economic Framework, as illustrated in Figure 3.
Each of these aspects is described in the paragraphs below.
Value Streams Budgets
Strategic themes heavily influence value stream budgets, which provide the spending and personnel allocations necessary to accomplish the strategic intent. In making these allocations, the following questions should be considered:
- Do the current investments in 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
c) maintenance and support activities
- Given these new strategic themes, what other adjustments should be made?
Strategic themes provide decision-making filters in the Portfolio Kanban system that influence the portfolio backlog. Alignment with strategic themes:
- Impacts the identification, success criteria, and prioritization of Epics in the funnel and backlog states
- Warrants consideration and discussion in the lean business case
- May impact how epics are split and implemented
Vision and Priorities
Strategic themes influence the Solution Train and ART vision and roadmap, and help set the attributes of Weighted Shortest Job First (WSJF) prioritization for items in the Solution Train 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 vital conceptual alignment between the trains. Due to their importance, they will often be presented by the Business Owners during PI Planning.
Finally, because they can affect any major element—including development/cycle time, product cost, product value, development expense, and risk—strategic themes may have a significant impact on the Economic Framework
Measuring Progress Against Strategic Themes
Strategic themes communicate differentiated strategic intent for the enterprise. Identifying desired business outcomes for strategic themes can establish a context for assessing progress towards the intent. However, many desirable measures of strategic intent are trailing indicators. Success factors such as ROI, new markets penetrated, etc., can take a long time to achieve. Instead, the enterprise needs feedback from early indicators, many of which are not financial metrics. Lean enterprises apply innovation accounting  to address this challenge. Innovation accounting is a thoughtful look at which early indicators are likely to produce the desired long-term results. It includes implementing the tooling, functionality, testing, or other mechanisms to collect that data.
In addition, certain success criteria can be based on investment or activity. For example, an online retail store might want to, “reach a younger demographic.” In this case, the success criteria could be a mix of investments, activities, and early indicators. A first feedback milestone might simply be to test the hypothesis of whether extending online capabilities to mobile platforms would appeal to that target audience. This could be measured easily with feedback from focus groups. From there a second step might be to increase the budget for the mobile teams. To start trending the data, an Epic MVP (Minimum Viable Product) could also be employed to capture the age of the users across all purchasing points.
Strategic theme outcome criteria provide indicators 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 timebox 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: 17 June, 2017