Adding Enterprise Syncs to your LPM Adoption

August 2, 2023 - Marshall Guillory, SAFe SPCT. A complementary article to 2023 SAFe Summit presentation in Nashville, TN - Connecting Enterprise Strategy to Portfolio Execution with a Systems Model, OKRs, and Goal Setting.

The Growing Need for Lean enterprise Portfolio MANAGEMENT, Value Stream Management

Organizations of varying size and complexity can greatly benefit from The Startup Way or SAFe Lean Startup Strategy by adopting Lean Portfolio Management (LPM) practices, including Lean Budgeting and Guardrails.

In very large and complex enterprise contexts and scale dealing with portfolios of portfolios (or Enterprise Portfolio Management), we see some common communication and alignment challenges exacerbated by structure, hierarchy, and silos. Portfolios of portfolios are often structured independently/horizontally, in nested form, or a combination of those patterns. This complex scenario has many thousands of people and dozens of business/mission units organized in the first system hierarchy that then becomes logistically impossible to meaningfully connect and align all parts of the enterprise in a timely manner. So, companies do without alignment and connectedness and base strategy and budgets on assumptions and historical rhetoric with loosely coupled data.

“The answer is twofold. First, a dual system is more about leading strategic initiatives to capitalize on big opportunities or dodge big threats than it is about management.”

– John Kotter, XLR8

Even with SAFe as an operating system for a dual system, there are currently some features that need to be added to the framework. The second system value stream network can suffer from extreme scale, cognitive, and social load limits as it constantly seeks alignment and communication with the first system. These challenges lead us to a vital scaling question: How exactly is the enterprise communicating and aligning with the portfolios?

The solution lies in technology and applying lean-agile practices to retread events. Both big data and AI can be used to augment an otherwise impossible task of creating enterprise connectivity and alignment at scale. We continue to extend the fractal of Lean, Agile, and Scrum theory to the enterprise with systems thinking.

How do we really connect strategy to execution at scale?

SAFe provides some essential guidance on connecting the enterprise to portfolios through Enterprise Portfolio Collaboration, Strategy, Strategy Agility, and ultimately, Strategic Themes and the LPM function, events, and Guardrails of a portfolio. Cross-portfolio event collaborations are currently not addressed explicitly in the framework. What SAFe does not currently address in the general guidance is where and how these activities and collaboration happen. We have a real world solution that could work for your complex problem while addressing gaps in framework guidance.

SAFe gives us a general idea about the necessity of a critical feedback loop between the portfolio and the enterprise as part of strategy formulation and, ultimately, Strategy Agility. We propose additional details about what the model should or could look like and how we connect the model through a Goal Setting Framework, System Model, and retreaded collaborations. There is a need for a place and time to collaborate on the results loop.

Creating a Goal Setting Framework and systems model

The first challenge to overcome is one of language and communication. Many organizations we work with have mixed-quality strategies that are well-intentioned, documented, and well-written but often do not actually represent a strategy and its story about the future. Often, we find that strategy does not describe a differentiating future state of the company, organization, solutions, products, and services – the strategy simply documents where they are today.

Additionally, we run into enterprise strategy that is constructed in a silo, disconnected from the people with the most knowledge about the customer and the solutions. The people and teams doing the work have that knowledge and possess deep connections to the customer. Enterprise executives and managers who are often responsible for creating strategy may need help meeting with people and teams doing the work.

“Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”

~ W. Edwards Deming

the critical Results loop

SAFe has excellent guidance that enables organizations to design a dual operating system with sufficient feedback loops within the portfolio. Here, we are addressing the critical need for connecting the results loop – the outcomes and key results from OKRs to enterprise strategy. In the graphic below, we visualize how the results loops pattern can be assimilated into highly complex organizations using SAFe as an operating system. The dashed results loops depict how organizational design for the dual system must accommodate collaborative paths back to enterprise goals. This completes the value stream chain post release of value to the beginning of the value hypothesis.

The composition and adoption of SAFe LPM practices and Strategy Agility enables the iterative and incremental nature of the Startup Way to cross and connect the traditional islands of corporate executive strategy and decision-making to execution – where the work lives. This feedback and results loop has incredible value baked in. It is the combined results and outcomes of customer delivery, expectations, OKRs, KPIs, and quantitative and qualitative metrics.

What does SAFe say?

SAFe specifically addresses this loop and concern in the Strategy & Investment Funding domain of LPM through the activity and collaboration that occurs in “Connect the Portfolio to Enterprise Strategy.” The SAFe > Enterprise article goes into more detail about the relationship between the enterprise and the portfolio. Importantly, the article states, “the enterprise must have an approach to determine its strategy, typically a natural output of a logical and reasoned business process.” As we explore and learn more in this article we will introduce an event that enables this connection and process.

“The portfolio strategy should support the enterprise’s broader business objectives. That’s why connecting the portfolio to the enterprise strategy is the primary responsibility of the strategy and investment funding collaboration. Moreover, linking the portfolio to the organization’s strategy is bi-directional. The portfolio connects to the enterprise business strategy through Strategic Themes and the portfolio budget. It provides feedback to the enterprise via the portfolio context (described in the Enterprise article).”

© Scaled Agile, Inc.

Additionally, we will make a point to build the connections for collaboration even deeper than just portfolio context. The highest quality collaborations in large complex organizations are those that connect investment decision makers, strategy to the people with the knowledge – the people doing the work – agile teams. There is much more to gain than just strategic themes and budgets.

Enterprises must learn to tap into this gold mine of knowledge and information, combining event collaborations and technology to enable the connection of strategy to execution. This is the intrinsic nature of de-scaling the space between people, processes, and tools to connect teams to the customer.

The System Model

To effectively design a communication model based on SAFe, LPM, and Lean-Agile values and practices, we must create a model in context from which an enterprise can design and develop the dual operating system. In the example model below, enterprise vision, mission, core values, culture, strategy, and work are all modeled in a singular stream of flow with consequent results loops.

NASA Case Study

We have created a clean example system model for the 2022 NASA Administrator Strategic Plan. You can view it here or below.

The Enterprise Strategy Sync Event

The recommended solution for capturing the value of the results loop is introducing a new SAFe event called the Enterprise Strategy Sync. This event is relatable to Strategy and Investment Funding in LPM but captures and involves enterprise context and the portfolio of portfolios rather than a single portfolio context. We do not recommend adding a new event to executives’ and managers’ calendars. We are not adding another layer to your SAFe configuration; we are adding connections and collaboration. We recommend evaluating events in the current system that could be transformed into an Enterprise Strategy Sync. In some systems, this could be a program management review (PMR), a phase gate review event, a town hall, or an executive strategy meeting or offsite.

The Enterprise Strategy Sync is akin to the Portfolio Sync. SAFe describes the Portfolio Sync as follows:

“The portfolio sync provides visibility into how well the portfolio is progressing toward meeting its objectives.”

Scaled Agile, Inc.

Notably, the portfolio sync focuses more on operations than it does strategy. The reason is that the enterprise strategy is already in flight in this context. The sync is about gathering and processing feedback and taking necessary action. Fast feedback enables strategy agility. It focuses more on connecting development value stream (DVS) outcomes across the portfolio of portfolios and consequent competency, flow, and results to the enterprise business agility value streams and strategy.

Enterprises need the enterprise portfolio sync event for several reasons. First and foremost, if agile works for the agile team, we observe through empiricism that agile can work at scale for a team of teams. If relatable or dependent Development Value Streams have ARTs (Agile Release Train) networked into a portfolio, then we hypothesize that agile can work for the enterprise, too. The challenge is the logistics at scale in possibly tens of thousands of people and many portfolios. It’s an awesome super problem.

We are not proposing some new form of super train that goes beyond the guidance of the solution train. We suggest that enterprises rebuild existing exclusive, unilateral, or shadow strategy, enterprise-portfolio vision collaborations into new lean-agile collaborations that enable the connection of the results loop.

Mechanics of Syncing and Change

The frequency of the sync event depends largely on the complexity of the organization and its scale. A study of the enterprise system and portfolios should be undertaken first, understanding where change is happening, prioritizing critical initiatives and portfolios, and developing those solutions. There must be alignment across current LPM adoption, strategy, strategic themes, epics and execution.

In order to facilitate a successful enterprise portfolio sync it will be necessary to prepare connecting and Gemba with teams in the portfolios. Ideally, Gemba would be accomplished just before the sync event and would include open invitations to the teams.

Enterprise Portfolio Sync Event (or check-ins, enterprise portfolios sync in your language)

Enterprise Portfolio Sync	Portfolio Sync	Strategic Portfolio Review
Review in-flight enterprise epics and the results from the portfolios, evaluate Strategic Goals and Strategic Objectives (OKRs), make decisions	Review in-flight epics, evaluate MVPs and make decisions	Assess portfolio context
Enable Strategy Agility by connecting the lean startup cycle to enterprise strategy and goals; advance enterprise epics through the Kanban system	Advance epics through the Kanban system	Maintain portfolio vision
Address blocks and impediments	Address blocks and impediments	Review and update strategic themes
Address cross portfolio coordination	Address cross value stream coordination	Review investment horizons and other lean budget guardrails
Collect enterprise Strategic Goal and Objectives metrics and portfolio KPIs	Collect portfolio metrics and value stream KPIs	Review portfolio metrics and KPI’s
Update the strategy, goals and objectives, vision if necessary	Update the portfolio roadmap	Review portfolio roadmap

takeaway

The key takeaways from this new practice are as follows:

• Apply design thinking to solve connecting strategy to execution through results loops
• Help to create enterprise bridges between the central office and the people doing the work
• Use an invitation-based collaborative model – avoid glass ceilings and artificial barriers to the information flow
• Reap the benefits of knowledge that is curated at the point of impact with the customer and delivery

---

Keep an eye out for future articles from Agile Rising on the related topic of Value Stream Management and the Value Management Office (VMO).

References

• Scaled Agile Framework for Lean Enterprises (SAFe) – Scaled Agile, Inc. – scaledagile.com/scaledagileframework.com
• Ries, Eric. The Lean Startup. Portfolio Penguin, 13 Sept. 2011.
• Doerr, John. Measure What Matters. Portfolio, 2018.
• Kotter, John P. Accelerate : Building Strategic Agility for a Faster Moving World. Boston, Massachusetts, Harvard Business Review Press, 2014.
• Kotter, John, et al. CHANGE : How Organizations Achieve Hard-To-Imagine Results in Uncertain and Volatile Times. S.L., John Wiley, 2021.
• Demystifying Strategy: The What, Who, How, and Why, by Michael D. Watkins https://hbr.org/2007/09/demystifying-strategy-the-what