Is your portfolio management lacking? Overcome obstacles and inexpedient control with Lean Portfolio Management.
Traditional portfolio management with annual cycles of work and projects is often characterized by massive control on a detail level during the early stages of project’s life cycle. On the other hand, there is very little control during the implementation phase, a short period of control during the completion phase, and lastly, a complete lack of control during the benefits realization. This is not always the best pattern for a project portfolio. Within scaled agile organizations, it may even be downright unsuitable. In these cases, it can be a good idea to consider alternative portfolio management methods, like Lean Portfolio Management (LPM).
First and foremost: A lean-agile approach to portfolio management does not mean less management. But it does mean different management. Different both in the way the management is carried out and different in the way it is distributed over the initiatives’ lifetime: Lean Portfolio Management is all about having just enough management. But what does this mean in practice? When is management ‘just enough’?
In order to answer this question, it is necessary to take a look at the 4 patterns of traditional portfolio management, which counteract lean portfolio management. When these have been identified, you can begin working towards a more agile approach to your portfolio, in just a few steps.
Obstacle 1: Micromanagement is happening at the wrong time
Many PMOs have rigid processes for maturation of projects, where they create detailed business cases and plans.
In this way, it can take months of formalities to pass a decision point. Often, you qualify an entire year’s worth of ideas at the same time, which means a very long waiting time before the individual initiative can pass through the eye of the needle.
In short: it is a heavy, manual process, which takes up a large part of the year and demands a lot of resources. Moreover, the only provable value you live up to, are rules you have created yourself.
The long, minute preparation is counterproductive to projects, which are characterized by high unpredictability. Because when it is impossible to know all factors in advance, not to mention how these factors will play out, these detailed plans and business cases quickly become outdated. At the end of the day, creating them will both have delayed the execution and tied an administrative millstone around the project’s neck. Sound familiar?
Here is how you can overcome these obstacles using LPM
There is still a need for a well-formulated and structured process for the steps, a project needs to take before it becomes a real project. But all the work that does not create value, needs to go.
Detailed business cases and plans must be replaced by lighter versions, where the focus is on an MVP, that can quickly reduce any uncertainty.
Moreover, you can also make your work much leaner by using standardized techniques. Prioritization and estimation are two good examples of areas, where there are finished techniques ready to use.
Use these to lessen the energy spent on planning, as well as accelerate the process and increase the value considerably.
You are using lean portfolio management, when you:
- Have well-formulated process steps going from idea to completion, including definitions of ‘done’ for each step.
- Use a ‘light’ business case with MVP and leading indicators for all expected benefits.
- Have standardized powerful techniques for, for example, prioritization and estimation
Obstacle 2: You are operating with an “Out of sight, out of mind”-mentality
When the project finally gets approved, it usually disappears from the portfolio management radar.
Afterwards, the only real management that is happening to the portfolio, is that you designate a project manager. From now on, no news is generally good news. Typically, you use some form of meaningless status reporting, which simply means that the project leader says, ‘everything is fine’. This means, that there is no actual assessment of the project’s deliverables, before the project has to be completed. But in reality, the beginning is where the portfolio management really should start taking interest in the project. It is in the beginning that all of the preliminary work needs to be confirmed or denied.
Use LPM to tidy up your projects
With an MVP-approach you ensure an appropriate amount of attention given to your project. When the project has been approved, it starts to get serious. The attention given to the portfolio increased and focuses on the MVP, which has to be delivered in the near future, and with which you have outlined the effects that you hope to achieve. Instead of it taking two years before anyone is interested in results, there are only a few months until the deadline. The fundamental assumptions that your business case is built upon, have to be tested. If they cannot be approved during this stage, the project is shut down. Just as LPM accelerates the starting process, it also allows you to quickly shut down a project, that does not give the desired results.
You are using lean portfolio management, when you:
- Plan an MVP, which is delivered at a set deadline
- Keep an eye on leading indicators
- Stop projects, if your assumptions turn out to be wrong
Obstacle 3: You panic before your deadline
After a long period below the radar, the project suddenly appears in the portfolio management’s sightline, as the deadline approaches.
And suddenly, the people involved with the project are in a great hurry. They need to polish, put things into place, describe and explain. Because, very soon, you will need to meet with portfolio management, where everything needs to appear straight as an arrow. At the very least, it needs to look like it is not your fault, if everything is not working out as intended. This requires resources for those working on the project and those working with portfolio management and controlling what has happened. And it is even during a time, where it is too late to make changes. In other words, you waste resources, that could have been used at a different time in the project.
Avoid unpleasant surprises by using LPM
Once again, the MVP-approach is a huge gamechanger. That is because it eliminates the panic before a deadline. You already know from the MVP, if your work will bear fruit. In addition to this, your initiatives are broken down into short iterations, which are synchronized across teams. This makes it so that the portfolio management has full status at the end of every iteration. Once again, lean portfolio management is all about taking, for example, the panic experienced before a deadline, and dividing it into small pieces, spread out across the entire project lifecycle. In this way, you ensure that you are using your resources in ways that provide the most forward-looking effects.
You are using portfolio management, when you:
- Execute in iterations
- Synchronize iterations across teams
- Have clear target figures for the portfolio that are maximum one iteration old
Obstacle 4: “This is not in my job-description”
Now, there is the whole thing about benefits. Do you remember that business case you spent all your energy working on before the project was approved?
Now the project is done, and the benefits have to be realized – the all-encompassing headache of most traditional portfolio management. An astonishingly high number of PMO’s have in one way or another erased benefits realization from their job-description. And this is in spite of the fact that it is the reason for the portfolio existing. Until you tackle this, anything else is basically pseudo-work.
Benefits realization is the basis of LPM
With a lean approach you always begin by focusing on the last link of the value chain and work backwards from there. Because, at the end of the day, it does not make sense to spend your time qualifying projects, if do not spend time on benefits realization. Focus on getting benefits out of your work and letting the portfolio management in the earlier parts of the value train be dictated by needs from the benefits realization.
You are using lean portfolio management, when you:
- Realize benefits as a part of the project itself
- Focus on benefits realization and prioritize it above other work
- Are not starting new projects, before you are done with benefits realization of the current one
