A Theme North Star is an important key element outlining your vision and ambitions for a Theme. It is designed to let Theme Sponsors define, express and share their strategic goals and ambitions for their Theme. The North Star shall also serve as guidance for which opportunities to pursue and projects to start. This article explains how to define and refine a Theme North Star and can be used as a step-by-step guide by Sponsors.
Importance of the North Star
A North Star is the thermometer you can use to determine whether a Theme’s project portfolio is in line with the Theme’s ambitions. It bridges the gap between organizational strategy (typically driven by customer needs/challenges and latest market trends) and actual tactical projects being executed in a Theme.
The North Star serves three main purposes for a Theme:
- Provides clarity and alignment on on the Theme's vision and ambitions;
- Determines the 'health' of a Theme’s project portfolio (relevance and progress);
- Holds the Theme and corresponding projects accountable for a clear outcome.
Elements of a North Star
A North Star consists of a clear vision statement for your Theme and the key KPIs that make your Theme strategy measurable. The KPIs let you assess 1) a Theme’s portfolio alignment with a Theme’s ambitions, and 2) a Theme's progress towards the expressed goals.
Example of a good North Star
In the example below, you’ll find an example of a sustainable energy company. One of their Themes is the “Energy Storage Solution” division.
Align North Star to Customer Value
A great North Star is derived from an avid understanding of what actions really create value for your customers. This means your North Star should reflect the impact you’re making on your customers' lives. In the example above, a metric such as “Number of solutions sold” would say nothing about the value customers capture from your products. However, the reduced energy consumption on peak hours does. Make sure your North Star is written with the customer in mind -- even if that customer might be internal.
When teams start projects within a Theme, they should be able to connect the customer value the project creates directly to the North Star KPIs. If a project is not aligned with the KPIs, you need to question whether it would be a good addition to the Theme’s project portfolio.
In short, a North Star should cover the following aspects for a Theme:
- An expression of the strategic direction (vision);
- A measure of customer value (KPIs); and optionally
- A measure of organizational value -- how the customer value translates into internal benefits (internal KPIs).
North Star Framework
In the simplistic example above, we’ve merged the main KPIs for the Theme with the Theme’s ambition. However, depending on your Theme’s scope, the North Star might become more complex. Therefore, you can use the following framework to create your Theme’s definitive North Star
Picking the right North Star
When creating a Theme North Star, you might discuss multiple focus areas that all seem to be equally important for a Theme. However, research shows that most successful Themes limit their focus on no more than 1-2 key goals. For instance, a SaaS company like Netflix might mainly focus on keeping subscribers’ attention (e.g. # of subscribers watching > 3 hours per day), whereas a grocery store company might focus on number of purchases per customer. It’s generally recommended to focus on a few key metrics, rather than on all.
Naturally your focus areas can evolve as you make progress, market conditions change, or your strategic objectives evolve. A North Star is not static in time, you need to nurture it, update it, and revisit it often.
Typically, corporate strategy and development teams can support you with the North Star definition.
If you need help defining your Theme’s North Star, please get in touch with NEXT Support.