At Sooner Safer Happier we recently hosted cross-industry discussions between five global brands that are leaders in banking, aerospace, retail, food, and travel. The discussions focused on how each organization is improving strategy execution and portfolio management at scale, revealing five key themes.
Comprehensive Evolution in Strategy Execution
Each company is undertaking a comprehensive evolution of its strategy execution ecosystem, and substantial benefits were reported. For instance, one company reduced its portfolio management change process from nine months—characterized by 'crushing bureaucracy and technical debt'—to an approach that enables value to be released in weeks.
Common Challenges and Drivers for Change
Despite operating in diverse markets, the industry leaders face common challenges in strategy execution:
Speed to Value: They are seeking sooner benefits realization and greater transparency in project ROI.
Portfolio Tooling Integration: They are contending with multiple non-integrated project, product, and portfolio management systems, with some managing up to 12 different tools.
Duplicated Efforts: There is hidden and duplicated work across business areas, diluting progress on strategic priorities.
Portfolio Governance Complexity: Accumulated complexity in portfolio management governance hindering flow, speed and innovation.
From the discussions, five key themes emerged:
Five Themes for Improving Strategy Execution
1.Invest in a Unified Strategic Portfolio Management Platform
Industry leaders have accumulated multiple non-integrated project, product, and portfolio management tools. This has resulted in challenges with managing priorities, allocating capacity, and tracking outcomes.
Prior to investing in a strategic portfolio management (SPM) platform, one organization was managing 12 different project systems without integration. It was difficult to answer basic questions such as, “What are our teams working on?” and “What value have we seen from our project investments this year?”
Each noted they are aiming for a 'golden thread' of alignment from teams to strategy, where all work ladders to one of the company’s strategic objectives. To see information in one source of truth, they are rationalizing disparate tools and investing in an SPM platform. This investment includes a primary portfolio tooling backbone as well as customer data to link outcomes with project and product information.
SPM tools under consideration were Broadcom Clarity, Planview, Workboard, Apptio, and Jira Align. We found the industry leaders could delineate between collaboration tools and an SPM platform. For example, only a mature SPM system was considered capable of supporting the integration and information processing needs of a large project investment portfolio (e.g., $2 billion USD annual project investment in a large retail bank).
2. Shift to Product Organization / Value Stream Aligned Teams
Industry leaders are transitioning away from siloed functional project delivery domains to long-lived, product or value stream-aligned teams. Their teams are intentionally aligned with strategic objectives and business outcomes, and have the cross-functional and multidisciplinary capabilities needed to produce value with minimal handoffs.
This operating model shift represents a move from a project-oriented to a product-oriented organization, and has resulted in significant advantages in speed to value (lead time, cycle time), business value, as well as employee NPS (eNPS).
3. Optimize Portfolio Management Governance: Shift from PMO to VRO
Their focus is now shifting away from traditional, heavyweight portfolio management governance controlled by waterfall stage gates to a lighter, outcome-centric delivery governance model. The definition of success is evolving from traditional PMO criteria–such as RAG status and on-time project delivery—to transparent value and outcome metrics.
The transition in portfolio governance is characterized by moving from a Project Management Office (PMO) to a Value Realization Office (VRO). Leading organizations are replacing output-centric measures and a reliance on individual contributor metrics with team-based measures focused on business outcomes. Objectives and Key Results (OKRs) are being widely used as a strategic framework for enterprise alignment, with Key Results (KRs) tied to business performance and incorporating both leading and lagging indicators.
A lesson often repeated was the importance of reducing the number of measures. Prioritizing which metrics to focus on became a crucial part of the learning process to improve strategy execution at scale.
4. Establish a Rolling Planning Cycle
Industry leaders are also moving away from extensive multi-year strategic planning efforts combined with 'set and forget' metrics. Previously, one company spent nearly six months developing its strategy but rarely revisited or tracked progress.
Most are continuing to operate an annual planning and budgeting cycle but now break it down into quarterly segments. This allows for a quarterly 'true-up' process to review progress against KR indicators. Additionally, a quarterly business review (QBR) process is being used as a transparent mechanism to track leading and lagging indicators and ensure accountability.
Another shift underway is in the funding cycle—from individual projects to funding long-lived product teams or value streams. The discussions also highlighted that strategic planning, the funding process, and the operating model are interconnected keys to unlocking strategy execution at scale.
5.Foster Leadership and Investment in Ways of Working
Recognizing that improving strategy execution and portfolio management is a multi-year effort requiring sustained commitment, each organization has established a central enablement/transformation function.
Top-down leadership support was noted as critical. In one organization, progress had stalled until the right executive, with the necessary experience and mindset, stepped in to provide the sponsorship needed to succeed.
Most companies acknowledged that they lacked all the internal skills needed for this type of change and thus engaged external expertise. External support included establishing product or value stream-aligned operating models, addressing portfolio management platform needs, coaching in ways of working, and facilitating the shift from PMO to VRO.
Next Steps
We’re excited to share the themes from our hosted cross-industry sessions on the topic of strategy execution. We also welcome your thoughts and reflections:
Is your organization facing similar strategy execution challenges?
Have you embarked on this change journey?
What results are you seeing from your investment in improving strategy execution/portfolio management?
About Marcus
Marcus is Partner with Sooner Safer Happier and enjoys facilitating discussions with global businesses on the topic of improving strategy to execution.
If you’d like to chat further about strategy to execution enablement, please reach out.