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- Earlier, we introduced

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the four out-of-box
configurations of Safe.

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We talked about the essential Safe

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and we've really covered all
the basic elements of that,

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the basic patterns and
activities that help each

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agile release train deliver value.

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We didn't talk at all yet
about the portfolio, however

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for most of us the portfolio level

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is a substantial concern.

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Even if we're operation
largely at the program level,

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where our concern is the
delivery of value where the

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agile release training focuses its effort

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on releasing on demand, we
need to know where new things

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are coming from, and
new initiatives, maybe

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architectural initiatives,
larger scale business epics,

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they're gonna arrive in this
visible combine area we're

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gonna see those flow head our way.

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They're gonna help us align
to the enterprise through

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strategic themes and make
sure that the work we're doing

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is consistent with the enterprise overall

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vision and strategy.

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So most of us operate in the
context of the portfolio SAFe,

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I know we certainly do even
though we're relatively a

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small enterprise in that regard.

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If we take a closer look,
there's not a lot of activities

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here, there's not a lot of
actions and not a lot of people

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per se, so it's kind of thin
compared to the art level,

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and that's because there's
high level strategic work,

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less people are involved,
and someway less activity

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that's planning related,
prioritization related,

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and coordination related
than it is tactical in terms

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of delivering value.

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We have the value streams
here as you can see, that's

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the fundamental construct
every SAFe portfolio, is

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a portfolio of value streams.

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But the work of actually
implementing happens down here,

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so we don't think about
the portfolio as executing

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value or building systems,
we think about it helping us

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provide the budgets, and the
support we need to successfully

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build the systems that
constitute these value streams.

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So lets take a deeper look
at the portfolio, We're gonna

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start with looking at this icon over here,

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lean portfolio management,
because this is the function,

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may not be a team that you
can identify directly, this is

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the function that every
enterprise has that has the

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ultimate responsibility for
defining, supporting and

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evolving a portfolio to
meet the overalls enterprise

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strategic objectives.

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What is LPM?

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It's a label, it's a
placeholder for one of the most

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strategic and important
functions of the enterprise, but

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one that as Geoffrey Moore
notes, is not always obvious.

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Ill take a minute to read
this quote because I think

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it's particularly powerful.

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Most strategy dialogues end
up with executives talking

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at cross-purposes because
nobody knows exactly what

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is meant by vision and strategy.

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Grand words but, who can decide that?

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And no two people ever
quite agree on which

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topics belong where.

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So even in a fairly robust
or well structured portfolio,

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or lets say, executive level
structure of the enterprise,

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lots of people, lots of
opinions, but how does

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strategy and vision get established.

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And that is why when you ask
members of an executive team

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to describe and explain
the corporate strategy,

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you frequently get
wildly different answers.

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That's why Geoffrey concludes,
We just don't have a

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good business discipline for converging

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on issues this abstract.

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And yet if we don't converge
on those issues, what good

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is the rest of the work we
do, if we're not aligned with

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the proper vision and strategy.

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So lets look at LPM as a function.

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Think in your organization
for a second about who

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these people are, you probably
know them, they probably

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have different titles, they
may be VP's and directors, or

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people with a business owner
responsibilities, maybe

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business unit managers, VP of Development,

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head of the data center, the
people that are ultimately

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responsible for portfolio performance.

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So it's a function, it's an
important function, and you can

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see here that there are nine
basic aspects, nine specific

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responsibilities that we
ascribe to this function, those

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responsibilities are indeed the learning

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objectives for this lesson.

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As you saw in the overview,
we're gonna go through

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all nine of these now.

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First of all, we need
to connect the portfolio

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to the enterprise strategy.

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Now this is assuming the context of a

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somewhat larger enterprise.

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This is assuming that the
portfolio itself is part of a

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larger enterprise, many
enterprises have multiple

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instances of SAFe, and the
enterprise strategy has to

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drive business unit A,
and business unit B,

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and business unit C, Division
A, the new company we

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acquired over here in
France or whatever, all has

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to be driven from a kind
of common enterprise view.

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That's a level of centralization,
only the enterprise

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can decide if it wants to
acquire a company or divest

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a product line, or create
a new product line.

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And we do that with this
very simple construct that we

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call strategic themes.

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And strategic themes are a
simple bulleted list, that tend

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to evolve very slowly, that
describe how we want the future

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state to be different
than the current state.

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Well we can't compete in
this market effectively now

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because of whatever, we sell
to an aging demographic,

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people like me, and we want
to appeal to people that

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are younger and have
additional buying power.

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They use different modes
of operation, maybe they

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shop online, maybe they buy their clothes

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from a mobile device, I don't.

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I do buy them online
as well as in the mall.

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I wonder what will happen
with our kids and grandkids.

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So if you're gonna appeal
to a different demographic,

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you're probably gonna
have to have different

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technologies to do that.

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And this has to be a
collaboration, it has to be a

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collaboration between the
people who are responsible,

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the LPM folks here, and
those that they work

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with in the larger
enterprise, maybe the CFO,

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the chief product line
officer, chief product manager,

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whoever's responsible for the overall

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complement of programs.

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They're driven by their own initiatives.

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Various things impact them,
maybe declining market shares,

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new market opportunities,
those are the business drivers

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that cause them to think
about things like warehousing

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costs are getting out of
hand, or our mobile platform

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is no longer competitive,
or we don't have any kind

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of corporate footprint
on Facebook, and yet

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everybody else does.

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So those are the things
that drive strategic themes.

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Now our context at the
portfolio level, pretend like

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that's down here in the forward
drawing, influences that,

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because it's gonna be kinda
silly to say, appeal to

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a younger audience if our
entire portfolio is aligned

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differently.

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We're gonna have to say okay,
but we've got some issues

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to express and also we
see, again, imagine this

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is our portfolio, new
opportunities, maybe things that

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you don't see because
you're one step removed from

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our market space, we see
things all the time that

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we'd like to report in on,
and communicate to you and say

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this could be of great value as well.

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So this is a tight
collaboration, it's not an

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every day collaboration,
because strategic themes and

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strategy evolves fairly
slowly compared to kind

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of our tactical objectives but it is

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an important collaboration.

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And that's how we arrive
at strategic themes.

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Now they're very critical,
they're also very short,

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they're pithy and tight, so
you might wanna take a minute

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to stop and read the SAFe article

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Strategic Themes and Enterprise,
because that's where this

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collaboration that I
just described occurs.

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Now, what do those do?

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The influence what gets built,
they're differentiating,

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they differentiate the current
state from the future state,

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a strategic theme for us
might be to make sure we

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have appropriate content
and coverage for dev ops,

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and continuous delivery.

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If you go back a few years
ago, SAFe didn't talk a lot

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about that, we were more
in the state of organizing

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teams, agile teams, and agile
arts to deliver something

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more frequently.

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Well now we want to drive
for continuous deliveries,

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so an example for us a year
ago was to substantially

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enhance our dev ops content,
and our product offerings

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around dev ops and continuous
delivery, and you can see

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that in 4.5.

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So that's an example of a
strategic theme that drives

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a lot of enterprise behavior.

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It's a simple statement right,
address dev ops, or however

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we phrased that, but it can
drive a lot of behavior.

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And this gives us a lot
of context because at

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the implementation level,
where we spend the rest

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of our lives, these are
gonna tell us things like,

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yeah we budged for that,
is this new initiative?

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Do we have the right content for that?

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Do we have the right subject
matter experts on site?

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Which value stream is gonna
get that, well in our case

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it's pretty easy, both.

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We're gonna have to address
both the knowledge base

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value stream of SAFe, and
the course ware value stream

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those are our two value
streams that we think about,

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and that's gonna start to drive decisions

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about what gets done.

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Do we move to a different
hosting environment, incorporate

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a better learning management
system to help those

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that are online?

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Or focus on dev ops, we have
to decide, now lots of things

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in life are not zero some
games, but budgets are.

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The budget is the budget, so
all that work has to be done

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in the context of the budget.

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One value stream might
want to grow a little bit,

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and another might want
to wane a little bit

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to achieve that.

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They also affect of course the
program vision in road map.

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Somebody needs to work on that
content, somebody needs to

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come up with this new form
of guidance for that combine.

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Or this new capability
inside sales force for

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learning management systems.

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So the fact that we need to
be able to do that different,

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affects our vision in road
maps, so our product managers

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and others that are responsible
and our PO's who are

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responsible for these things,
are influenced by that.

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They also affect the the
economic framework, gosh, can

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we outsource?

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Perhaps we're sales force and
we're trying to figure out

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are we gonna integrate
learning management system, is

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that a core competence, or does
one of our partners do that?

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Well that affects the
economic framework of

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what sales force is doing.

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By the way I have no idea
what sales force is doing,

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but I just use that as an example.

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Lets take a second now and pop
back into your organization,

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and think about your
enterprise and ask yourself

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the question, what needs
to be different next?

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Here we are, it's the
middle of 2017, getting

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on towards the end, in 2018,
we've already defined our

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strategic themes for next year,
we have I think four or five

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I don't remember exactly, the
exact formulation of them.

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What are yours?

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Identify three strategic
themes, that an help define

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the strategy of your company
and your customers portfolio

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in the upcoming year.

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Focus on the differentiators
for your business, not

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the typical business as usual items.

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So think deep thoughts about
what would be great, what the

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future would look like if we
could do this one thing better.

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So did you come up with some?

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Now think a little bit
differently about them.

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Will they influence the funding?

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Is your current state of funding
directly aligned to that,

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or do you say wow, we've got
substantial investment in

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this area where our
market share is waning,

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and pretty unlikely to
recover, but we don't have

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the right investments here.

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And Geoffrey Moore would
say you know that inertia is

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00:10:04,938 --> 00:10:07,920
a residue of past innovation
efforts, and you have to look

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00:10:07,920 --> 00:10:10,380
succinctly at your organization
your portfolio and make

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sure that the investments
are matching where you want

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to be, not where you are.

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And I mentioned a couple of
strategic themes already,

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one was a retail company
that was trying to reach

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a younger demographic, people not like me.

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They wanna sell to my kids.

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My kids have the new
buying power, that's great.

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At the same time, that
another one was just their

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warehouse costs seem to be
growing disproportionately

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to revenue, so if they
did two things, appeal to

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a younger audience, and
lowered their warehouse costs,

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they'd be in pretty good shape.

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You can see the revenue go
up, and you'd see the cost

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stabilize or start to go
down, so that makes a lot

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of sense for that retailer,
and that's just a good example

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of how you connect the portfolio to the

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enterprise business strategy.