“Be the change that you wish to see in the world.”
― Mahatma Gandhi
To me this is a very interesting topic based on market trend where organizations are adopting new ways of working and executing products, projects in Lean Agile. So I decided to start this series related to Lean Portfolio management. Let’s start on this
As I mentioned earlier, what is going around now a days ?
- Market needs are changing very frequently
- Consumer behavior are also changing based on digital disruption
which brings lot of pressure to organizations to deliver faster, manage change, and deliver right functionalities and products.
That’s reason most of organizations are executing their programs and projects in lean agile. Still on portfolio level, many organization are using traditional approach which blocks them to achieve right value at right time. It is very critical to transition their portfolios from traditional approaches to lean agile as traditional approaches are not designed for scale and impact of digital disruption. There are challenges, uncertainty and needs to deliver innovative solutions is as sooner as possible.
So what is Lean Portfolio management?
Lean Portfolio Management (LPM) is to apply lean thinking to manage enterprise, portfolio, and product portfolios to fast and flexible flow of high value work.
Lean portfolio management help organizations to re-engineer their funding model and processes to align with desired business outcomes. You need an alignment to strategy at every level.
What exactly makes the Lean approach more effective –
So this Lean-Agile approach is focused on :
Decentralized decision making –
Traditional portfolios are designed with command control and top-down approach of decision making. Key decisions made at top level and then flow towards down resulting delays and approval processes.
Decentralized decision making helps everyone to take key decisions at every level which increases speed and efficiency. Also brings opportunity and space for innovative ideas.
Continuous Value flow –
Traditionally focus was on long term planning and funding which lead to deliver slow and many times those objectives are not aligned or loose importance to organizations.
Lean Portfolio Management helps manages demand in continuous flow. It reduces the wasteful context switching that comes from having too much work in progress.
Lightweight business case –
Lean portfolio management relies on light weight, epics (these are approved business cases) focus on business outcome. Teams do not waste time developing detailed plan and more focused on delivering value to customers.
Decentralized rolling wave planning –
Traditional approaches have centralized annual planning process however Lean Portfolio management focus on decentralized planning cycle on certain cadence.
This is also known as Program Increment (PI) planning, time boxed event and occur on a cadence bring more alignment to planning process. In PI, Agile Release Train, will focus on delivering incremental value in form of working software.
Agile Estimation & Planning –
Traditional portfolio management is focused on work breakdown structure and planning process is more coming up with detailed plan with deliverables beforehand. There is no motivation for innovation and teams need to follow the plan and meet the dates.
In agile planning team focus on planning short cycles based on priorities which translates to higher business value and customer needs.
Lean Agile Budgeting & Self managing ART’s –
In traditional approach, portfolio will have sub-portfolios, programs and projects and once projects approved then resources assigned to deliver the work.
They do not follow cadences as group of teams and mostly sync on status meetings. In this scenarios we are moving people to work. There is less collaboration among teams which creates silos. They have project based funding model and cost accounting which creates an environment of friction, inefficiency and bureaucracy.
However in case of Agile release trains, we fund agile release trains so we are funding teams for certain amount of time which helps to deliver high priority items first. ART’s are long lived self-organizing (team of teams) which plan together, commit together and execute together.
It follows Lean agile budgeting approach and we move work to teams.
Objective, Fact based measure and milestones –
Lean Portfolio management looks the way we can benefit to organization to accomplish business outcomes and deliver epics. Milestones are used to track progress toward a specific goal or event. There are three types of SAFe milestones: Program Increment (PI), fixed-date, and learning milestones.
Implementing Lean Portfolio Management –
Lean Portfolio Management has highest level of decision making and financial accountability for the value streams and solutions in SAFe portfolio.
Focus is on three key aspects to realize the Lean Portfolio Management competency –
- Strategy and investment funding : Organize funding and funding processes around key value areas
- Agile portfolio operations: Create teams to help drive alignment across portfolio based on new ways of working
- Lean Governance: Apply Lean guardrails for value stream funding and more continuous planning
I will discuss more on these in upcoming post related to this series. So please stay tuned and wait for next Article. Happy reading!