Lean Portfolio Management: steps to take

Is your company facing the pain points below? 

• There are always more ideas than the company can implement.
• Stakeholders have a hard time agreeing on the highest priorities.
• Leadership is disconnected from teams doing the work.
• There are many challenges managing demand vs. capacity vs. budget.

 

If so, it's time to establish a lean portfolio management system in your company, and here are the steps to take:

#1. Establish LPM team

It's essential to be clear on who is responsible for managing the Portfolio and what kind of activities they will perform. For that reason, establishing an LPM team is a MUST. Depending on your environment, you can have different roles on the team. For example, if you work in SAFe, it most likely will be business owners, epic owners, release and solution train engineers. In a more traditional environment, you may have delivery managers and directors, business representatives, and so on. 

I would suggest using the RACI matrix for managing relationships on such a team. 

Responsible: someone who is directly responsible for managing the Portfolio. 

Accountable: someone who is ultimately accountable for the Portfolio's success or decisions made.

Consulted: someone with unique insights the team may consult. 

Informed: a client or executive who isn’t directly involved, but you should keep up to speed.

#2 Visualize the flow of work

You can't manage what you can not see, which is why it's essential to visualize the workflow of your portfolio. First, run workshops to map all the existing activities needed for the portfolio delivery. It will help you identify how activities are connected or dependent on each other and see if anything is missing. Also, pay attention to overlap or delays. When you have assessed flow and have a complete picture, look for opportunities to improve and adapt based on the pain points.

The goal of visualization is to move every bit of work efficiently from beginning to end with as little waste and lag as possible. To achieve such efficiency, you will need to limit the amount of work in the pipeline to what can reasonably be managed at a given time. For example, you may want to limit items in progress based on the teams' velocity and capacity.

#3 Establish LPM cadences

You need to agree on what kind of meetings to have to ensure your portfolio progress is moving forward. Below are the two recommended ceremonies SAFe and other frameworks recommend: 

Meeting 1: Portfolio Sync Up. The recommendation is to have it once per month. The goal is to review portfolio metrics, dependencies, continuous improvement items, funding conflicts, and risks. Also, update the portfolio roadmap based on the discussion.

Meeting 2: Portfolio Review. The goal is to assess and prioritize portfolio capabilities, update business objectives and roadmap, review investment horizons and other budget constraints and metrics. The recommendation is to have it once per quarter.

 

#4  Establish LPM success metrics

If you want your decisions to be driven by data, you need to establish metrics. They will help you set target goals and improvement plans.

Here are the metrics I would recommend to track for a start:

#1 Portfolio velocity

#2 Committed vs. delivered - predictability rate.

#3 Cycle time and lead time - time to market.

#4 Customer/stakeholder satisfaction.

#5 Work distribution by lines of business.