As a portfolio or organizational leader, you may have wondered “How will SAFe change what we do?” One way of looking at this is to consider the constructs recommended by the Scaled Agile Framework (SAFe) for the Portfolio level. For reference, here is a view of the SAFe 5.0 Portfolio configuration:
Let’s briefly step through some of the important constructs that may cause changes in your daily portfolio leadership approach.
Strategic Themes
Strategic Themes are the “bridge” between enterprise business strategy and your specific portfolio. They are intended to be forward-looking market differentiators. Strategic Themes influence your portfolio strategy and provide the business context for your portfolio-level decisions. This ensures alignment of your portfolio efforts with the overall enterprise strategy.
A few examples of Strategic Themes include:
- Migrate to the cloud
- Mobilize all our apps
- Appeal to the senior market
To ensure measurability of your Strategic Themes, consider defining each as an OKR (Objective and Key Result). An example OKR might be “Reduce membership churn from 20% to 5%”. To ensure transparency of your Strategic Themes, make sure they are visible and communicated often.
Potential Big Change: Use of Strategic Themes to tie back into your company’s overall business strategy.
Portfolio Vision
A Portfolio Vision is more detailed than the Strategic Themes. The Portfolio Vision articulates a future state and why it is worth achieving. SAFe recommends the use of the Portfolio Canvas artifact to capture the salient aspects of your Portfolio Vision.
The SAFe Portfolio Canvas includes:
- Value propositions
- Key partners
- Key activities
- Key resources
- Cost structure
- Revenue streams
The Portfolio Canvas should initially be used to capture the current state of your portfolio. A separate Portfolio Canvas would then be used to capture the desired future state of your portfolio for comparative purposes. Both of these artifacts represent your Portfolio Vision, where we are and where we are going. Your current state canvas should be updated quarterly as needed to remain relevant.
Potential Big Change: You may not have a portfolio vision artifact. If you do, chances are it represents current state or future state but not both. Consider taking the SAFe recommendation and create your Portfolio Vision showing both current AND future states.
Epics
Epics are large initiatives, similar to projects, but handled totally differently. There are two types of epics in SAFe, business epics and enabler epics. Business epics are those that deliver business value. Enabler epics are those that are architectural or structural in nature that are designed to help deliver value in the near future. A lean business case is typically used to help build consensus on the importance of the epic and the funding needed for the epic.
Epics are estimated using relative story points. They are worked using the build-measure-learn loop from Lean Startup in a hypothesis-driven manner. Epics can cross release train boundaries and program increment boundaries.
Epics are lightweight in their documentation. The more important attributes include:
- Name
- Epic owner – person responsible for shepherding the epic from start to finish
- Hypothesis
- Expected business outcomes
- Leading indicators – early measures predicting the business outcome
- Non-functional requirements
- Estimate
- MVP – smallest set of features to prove/disprove the hypothesis
Potential Big Change: You may be treating large development efforts with assumptions. SAFe recommends treating large development efforts as a hypothesis and not an assumption. The hypothesis is continually tested each iteration as the Minimum Viable Product (MVP) set of features are built. Once the MVP has been built and validated in the market, your portfolio can make a lean righteous decision to persevere with more features or pivot to another more important epic.
Portfolio Kanban
Portfolio Kanban is the structural artifact used to manage the workflow associated with epics. All epics receive some level of review and analysis, but only those deemed worthy are approved for development. The states of the Portfolio Kanban are:
- Funnel
- Reviewing
- Analyzing
- Backlog
- Implementing (includes sub-states MVP and Persevere)
- Done
As work on an epic commences, it flows through the various Kanban states. For example, an epic approved for development moves from Analyzing to Backlog. An high-priority epic chosen to begin work moves from Backlog to Implementing.
Potential Big Change: Establishment of a Portfolio Kanban instantiates a pull-based system into your organization. Epics will only be pulled into the Implementing state when your teams and “team of teams” have available capacity to apply to the incoming demand. This approach reduces context switching across multiple initiatives and prevents a push-based project overload situation.
Value Stream
In many ways, the Value Stream is the most important construct in SAFe. The concept actually comes from the Lean world and reminds us that the most efficient work model is when we are aligned to value. Value Streams are a sequence of steps that an organization uses to implement solutions that provide a continuous flow of value to a customer.
The big advantage of alignment to value is reduced handoffs and delays. Handoffs and delays are the most obvious types of waste in product development. By forming cross-functional teams and cross-functional “team of teams” handoffs and delays are minimized. The natural result is faster time to market.
SAFe recommends a Value Stream Mapping event to identify your portfolio value streams. This includes potential realignment of resources and teams to optimize the delivery focus with minimal waste.
SAFe also recommends the use of a Value Stream Canvas artifact for capturing the salient aspects of each value stream:
- Name
- Value proposition
- Products & services
- Customer segments
- Channels
- Budget
- KPIs
- Release trains (team of teams)
Potential Big Change: Identification of your portfolio Value Streams. Reorganization of your teams and “team of teams” to become cross-functional. Realignment of your teams and “team of teams” to value based on a value stream mapping activity.
Lean Budgets
SAFe recommends the budgeting of Value Streams within the portfolio, not projects. Funding value streams leads to more persistent organizations that do not have to form and reform based on projects starting and stopping. Funding value streams also leads to dynamic budget adjustments (e.g. quarterly) versus an annual operating budget that typically cannot be changed.
Value streams are made up of teams that work together to deliver a continuous flow of value to the customer.
Potential Big Change: Fund value streams instead of projects. Think of new work as epics that can be prioritized within the Portfolio Kanban instead of additional projects that need resources.
Guardrails
Guardrails describe the policies and practices for budgeting, spending, and governance for a specific portfolio. SAFe defines four guardrails:
- Horizon-based investments
- Team-level capacity-based allocation
- Approving significant initiatives (epics)
- Continuous business owner engagement
Potential Big Change: Consideration of the guardrails when making decisions on the level of funding for each Value Stream within your portfolio.
KPIs
Key Performance Indicators (KPIs) are the quantifiable measures used to evaluate how a Value Stream is performing against its forecasted business outcomes. Think of KPIs as “closing loop” between Strategic Theme OKRs, the Portfolio Kanban, and the epic hypothesis.
Of particular note is to measure what truly matters and avoid the use of vanity metrics. Vanity metrics are those measures that do not correlate to actual business results.
Potential Big Change: Use of KPIs to empirically measure progress of each Strategic Theme.
Final Thoughts
Not covered here are the roles recommended by SAFe for the Portfolio level: Lean Portfolio Management, Epic Owner, and Enterprise Architect.
Despite popular belief, SAFe is not intended to be overly prescriptive. You can adjust this portfolio guidance based on your current situation. Just keep in mind that there is a tremendous amount of historical perspective and reliance on Lean-Agile best practices built into SAFe, so you will want to strive to install similar constructs explicitly within your organization.
For a good concise view of what all is involved in an Agile transformation, check out this blog from Agile Authority here. For more information on SAFe, go here.