Lean Portfolio Management in 2024
In today's dynamic business landscape, organisations face the constant challenge of aligning their investments with strategic objectives while navigating a sea of competing priorities. This is where Lean Portfolio Management (LPM) emerges as a powerful tool, enabling organisations to prioritise initiatives, deliver value efficiently, and adapt to changing market conditions.
What is Lean Portfolio Management?
Lean Portfolio Management is a framework that applies Lean principles to the management of strategic portfolios. It provides a structured approach to identifying, evaluating, and prioritising initiatives that align with the organisation's strategic goals. By focusing on delivering value to customers and reducing waste, LPM helps organisations optimise their resource allocation and achieve their desired outcomes.
Key Principles of Lean Portfolio Management
Customer Focus:
LPM emphasises understanding customer needs and delivering value that resonates with their expectations.
Empowerment:
Teams are empowered to make decisions and take ownership of their work, fostering a culture of agility.
Continuous Improvement:
LPM encourages ongoing evaluation and adaptation to ensure the portfolio remains aligned with evolving business needs.
Prioritisation Techniques for Agile Portfolios
Navigating the complexities of a portfolio requires effective prioritisation techniques. Here are some widely used methods:
RICE (Reach, Impact, Confidence, Effort):
This method assesses initiatives based on their potential impact, reach, confidence in success, and effort required.
ICE (Importance, Certainty, Effort):
This method prioritises initiatives based on their importance to the business, level of certainty in their impact, and the effort required to implement them.
WSJF (Weighted Shortest Job First):
This method assigns numerical weights to different factors, such as urgency, benefit, and effort, to determine the overall priority of each initiative.
Eisenhower Matrix:
This time management technique categorises tasks into four quadrants: urgent and important, urgent and not important, not urgent and important, and not urgent and not important.
Balancing Urgency and Need: A Stakeholder's Perspective
Managing the competing demands of multiple stakeholders can be a challenging aspect of portfolio management. Here's how to effectively balance urgency and need:
Establish Clear Prioritization Criteria:
Define clear criteria for prioritising initiatives, ensuring transparency and aligning with strategic objectives.
Involve Stakeholders in Prioritization:
Engage stakeholders in the prioritisation process to gain their input and foster a sense of ownership.
Communicate Prioritisation Decisions:
Clearly communicate the rationale behind prioritisation decisions to all stakeholders to build trust and understanding.
Regularly Review and Adapt:
Regularly review and adapt priorities based on evolving market conditions and stakeholder feedback.
Using Burn Up Charts for Epics
Burn up charts provide a visual representation of work completed over time. They can be effectively used for managing larger epics, which are complex initiatives that may span multiple sprints or even months. Burn up charts help teams track progress, identify potential roadblocks, and make adjustments as needed.
Above: An illustration of a Gannt Chart.
Hierarchy of Duration
Tasks are short-duration activities that can be completed in a few hours. User stories are larger chunks of work that fit within a single sprint. Epics are larger initiatives that may span multiple sprints, weeks, or even months. High-level feature sets represent a collection of epics that together address a significant business need.
Task (hours, half day)
User Story (half day to a few days)
Epics (multiple days, weeks)
Feature set (weeks, months)
What are the benefits?
Lean Portfolio Management offers a framework for aligning strategy with execution, prioritising initiatives effectively, and adapting to changing market conditions. By embracing Lean principles, organisations can deliver value to customers faster, improve resource allocation, and enhance their overall agility.
10 steps, how do you implement lean portfolio management?
1. Define the vision and scope and the north star
Clearly articulate the overall goal or objective of the high level products (or programmes).
Identify the target audience(s) and their needs.
Establish the scope of the programme, including the boundaries and deliverables.
2. Develop a stakeholder engagement plan
Identify the key stakeholders involved in the products or programmes.
Determine their roles and responsibilities.
Establish communication channels and frequency with stakeholders.
Develop a simple plan for managing stakeholder expectations (when and which information they will receive, they should receive it before they ask themselves what’s going on) examples are a weekly push of a dashboard in PDF or a live view in a ticket system like Jira, ServiceNow, Trello, Microsoft DevOps.
3. Create a work breakdown structure (WBS)
Break down the products programme into smaller, manageable chunks.
Assign each task to a specific team or individual.
Estimate the time and resources required for each task.
4. Define the roadmaps and schedules
Create visual representations of the product roadmaps.
Identify dependencies between work items.
With the team velocity, and priority work items sized, define a rough estimate of burn up, use story points or t-shirt sizing, or just count items, for sizing. Be aware that story points are good for internal team collaboration (planning poker) yet most items are in the middle so with much larger sets of user stories on team level, counting may be a good alternative.
5. Define a prioritisation model
Consider prioritisation frameworks, RICE, ICE, WSFJ, Eisenhower and quantify variables to help explain priorities to the various stakeholders. Using quantitative variables will be helpful for stakeholders to understand their prioritisations against others.
6. Select the right tools and technologies
Evaluate project management software and other tools.
Identify the tools that best suit the needs of the programme.
Implement the tools and provide training to team members.
7. Establish a governance process
Define the decision-making process for the programme.
Create a system for tracking all progress and work items.
Implement a process for resolving conflicts and disputes.
8. Monitor and control progress
Track the progress of the programme against the plan.
Identify and address any issues or risks promptly.
Make adjustments to the roadmaps as needed.
9. Gather and manage feedback
Solicit feedback from stakeholders and team members.
Use feedback to improve the programme and its outcomes.
Document feedback and track its impact.
10. Evaluate and close the programme
Assess the success of the programme against the original goals.
Identify lessons learned for future programmes.
Communicate the programme's outcomes to stakeholders.
