Direction — Templates

Money already spent gets no vote.

About these templates

The Direction stage produces four instruments: the strategy-on-a-page, the investment criteria and weighting framework (the reference framework), the risk-appetite sheet, and the allocation-buckets framework. The templates below are skeletons — they define the structure and the questions each instrument must answer, at a level of detail proportionate to the Managed setting. Lean adaptations can reduce each to a single page or a set of headings. Enterprise adaptations will add governance fields, version control, and ratification records. A fuller set of worked examples and tool guidance is provided in Book 2.

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A1 — Strategy-on-a-page

Purpose: A single-page summary of the organisation’s current strategy, expressed in terms the portfolio can use — not as a narrative of ambition, but as a set of specific priorities, success measures, and constraints that will govern the reference framework and its weights.

Complete this template when the strategy is set or refreshed. Review when any of the inputs change.

Field	Content
Period covered	From [date] to [date]
Strategic intent	One paragraph: what the organisation is trying to achieve in this period and why
Strategic priorities	List the 3–5 specific priorities the portfolio should advance (not values or themes — specific objectives)
Success measures	For each priority: how success will be measured, and at what level it becomes meaningful
Constraints	Specific boundaries the portfolio must observe (regulatory, financial, capability)
Risk posture	One sentence: what kind and level of risk the strategy permits in pursuit of the priorities
Owner and review date	Who approved this, and when it will next be reviewed

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A2 — Investment criteria and weighting framework (the reference framework)

Purpose: The agreed set of selection criteria and their strategy-set weights. Every investment is judged against this framework; every weight change requires the process in the notes below.*

Criterion	Definition	Weight (%)	Notes on application
Value	The benefit this investment creates — financial, strategic, or operational — measured by [specify the unit the organisation uses], expressed as forward value (value still to come)	[%]	Score 1–5: 5 = clear, high-confidence benefit exceeding [threshold]; 1 = speculative or negligible
Strategic fit	How directly this investment advances a current strategic priority (as listed in A1)	[%]	Score 1–5: 5 = directly named in a priority; 1 = no traceable link
Risk	The likelihood of failure and the magnitude of harm if it fails — to the investment and to the portfolio	[%]	Score 1–5 (inverted): 5 = low probability, low impact; 1 = high probability, high impact
Cost	The total consumption from the pool: money, scarce skills, and management attention	[%]	Score 1–5 (inverted): 5 = low cost relative to value; 1 = high cost relative to value
[Optional additional criterion]	[Define it — if it cannot be defined, do not include it]	[%]
Total		100%

Notes on use:

1. The criteria are the constant; the weights are the variable. The weights are set by the strategy and reviewed only when the strategy changes or when Review provides strong evidence that a criterion is mis-weighted.
2. Criteria must be defined specifically enough that two people applying them to the same investment produce scores within one point of each other. Test this at the first scoring session.
3. The total weight must sum to 100%. Re-weighting one criterion requires re-balancing the others.
4. Any weight change must be: proposed in writing with the strategic rationale, reviewed by the portfolio board (or owner at Lean), documented here with the date and the approver.

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A3 — Risk-appetite sheet

Purpose: A specific, portfolio-level statement of what risk the portfolio will carry in pursuit of return. This governs the balance of the chosen mix — not the risk score of any individual investment.*

Dimension	Statement	Implication for the mix
Overall tolerance	[State the level: e.g. “We will accept up to X% of the portfolio in uncertain-return investments at any one time”]	The maximum proportion of the funded set that may carry high risk ratings
Categories prohibited	[e.g. “We will not fund investments whose primary risk is reputational without executive sign-off”]	Specific risk types that require escalation or are excluded
Run-the-business floor	[e.g. “At least X% of the pool must be allocated to investments that protect existing operations”]	The minimum proportion reserved for operational continuity
Innovation room	[e.g. “We will protect at least X% of the pool for uncertain bets, funded to learn”]	The minimum protected allocation for exploratory investment
Concentration limit	[e.g. “No more than X% of the pool may depend on a single technology, supplier, or strategic assumption”]	The concentration limit applied at the choosing stage

Review trigger: Review this sheet when the strategy changes, when the portfolio’s actual risk profile diverges significantly from the stated appetite, or when Review produces evidence that the appetite is set incorrectly.

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A4 — Allocation-buckets framework

Purpose: The pre-committed split of the total pool into categories, protecting each category from being crowded out by the others. Complete this if the portfolio is using buckets; otherwise leave blank.*

Bucket	Definition	Approximate allocation (%)	Notes
Run the business	Investments that fund and protect the existing operation	[%]	Includes mandatory / regulatory work
Change the business	Investments that improve and extend what exists	[%]	Moderate certainty of return; medium horizon
Innovation / explore	Uncertain bets funded to learn	[%]	Fund-to-learn structure; high tolerance for failure within the tranche
[Additional bucket if needed]	[Define it]	[%]
Total		100%

Rules (mandatory):

1. Investments compete within a bucket each period. A strong innovation candidate does not displace a run-the-business investment; it competes with other innovation candidates for the innovation allocation.
2. Bucket sizes are resized between periods, by the portfolio board (or owner), aligned to the strategy. A bucket whose size has not been reviewed in more than two periods should be reviewed immediately.
3. Buckets protect the category, not the individual investment. A weak investment in the innovation bucket still loses to a stronger innovation investment.
4. Reallocation between buckets within a period requires a formal decision, at the board level, with a stated rationale.