Lean into Portfolio Management | IQbusiness
25 February 2021

Lean into Portfolio Management

Organisations around the world are facing an increased number of constraints and customer demands. Essentially, organisations are trying to do more with less.

The global pandemic certainly contributes to this. Organisations are facing unrelenting pressure to keep customer service high and costs low. Somewhat unexpectedly, this has presented many organisations with the perfect opportunity to streamline their processes and practices.

Lean Portfolio Management (LPM) is a key enabler for organisations on the path to Organisational or Business Agility.

LPM addresses the following problems:

  • Misaligned strategic work items
  • Rigid funding models applied to iterative and incremental delivery approaches
  • Lack of focus on achieving outcomes (instead of pursuing outputs)
  • Conflict arising from misaligned expectations
  • Multi-tasking and poor capacity management
  • Prioritisation practices that do not support iterative and incremental delivery approaches
  • Lacking work qualification processes resulting in mismatched demand and supply
  • Measuring efficiency by busyness instead of customer/business outcomes
  • Disconnect between annual planning and daily execution

The three most valuable elements of LPM are (as shown by the State of Agile Africa Report 2020):

  • Linking Strategy to Execution
  • Visualising and maintaining progress of execution with benefit realisation
  • Addressing (resolving and/or minimising) team and organisational dependencies

The funding dilemma

“…funding of agile projects through traditional budgeting/funding process, which are quite rigid in nature, is at odds with the agile nature of project execution, thereby compromising the potential impact of agile adoption…”State of Agile Africa Report 2020

Most strategic work items require considerable investment of resources (time, money, and equipment). The foundation of Agile is iterative (repeating cycles) and incremental (increasing value in small chunks), thus we need to fund agile initiatives with a different budgetary approach.

  • Participatory budgeting is typically used with LPM
  • Financial resources are released in increments, and this process helps ensure that value definitions are well understood before work commitments are made.

Funding agile initiatives via LPM involves:

  • Developing a Lean Business Case with defined Minimum Viable Product (MVP)
  • Understanding the time and cost estimates for the MVP
  • Understanding the constraints for delivering the completed work
  • Allocating time and money to the affected value stream
  • Tracking and adjusting resource investment as teams deliver value to customers

Potential point of failure

“…more than half (55%) of respondents experienced blockages or impediments from departments in their organisation that are not adopting Agile. More than three quarters (78%) of respondents either strongly agreed (28%) or agreed (50%) to the statement: “We have to resolve a lot of cross-team dependencies before a product can be delivered to a client.”State of Agile Africa Report 2020

Dependencies have plagued organisations since the early days of software product delivery. LPM addresses this problem through three distinct steps:

  1. Map and understand the end-to-end value streams that deliver value to customers
  2. Assemble teams or a team of teams in a virtual delivery unit
  3. Empower the assembled teams to deliver the authorised solutions to the value stream and its customers (by decentralised decision-making and the investment of resources)

The creation of the virtual delivery team of teams minimises the cross-team dependencies. This happens through identifying the critical people and skills needed to serve the value stream, fully allocating them to the team of teams for the funded time and decentralising decision-making to the team of teams. These actions yield gains in waste reduction, team optimisation, (by reducing context switching) and faster delivery (numerous handoffs and handovers are eliminated).

Solving these problems for organisations

Lean Portfolio Management represents a critical step in the path to Business Agility. While adopting LPM is a difficult journey, the benefits directly and positively impact customers. In this constantly disrupted business landscape, increased customer satisfaction is critical to the ongoing survival of any organisation.

Introducing the Lean Portfolio Management Accelerator

In response to the need for Lean Portfolio Management, IQbusiness created a unique LPM Accelerator. This offering combines our industry expertise, the latest research, and our knowledge assets to help organisations upskill in Lean Portfolio Management quickly and effectively.

Our accelerator helps organisations and teams jumpstart their pursuit of the benefits of Lean Portfolio management. The LPM accelerator allows organisations to field test the techniques and tools before committing to full LPM adoption.

“We are also of the opinion that Lean Portfolio Management (LPM), which provides the crucial link between strategy and execution, can help and is therefore an approach that organisations must seriously consider if they haven’t already.” – State of Agile Africa Report 2020

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