There are a number of benefits that come from following Lean Portfolio Management principles in your organization. That’s why over the last decade, it has become common for organizations to undertake Agile transformation initiatives to improve value delivery.
Many of these organizations focused on transforming traditionally siloed teams into dedicated, cross-functional teams that leverage fast feedback loops to deliver product increments more effectively.
But here’s the thing. In order to achieve enterprise Agility, Lean-Agile principles and practices must also be applied to the entire enterprise well before work is delivered by Agile teams. This includes upstream processes of strategic planning, budgeting, and portfolio management.
A growing number of organizations have turned to Lean Portfolio Management as a model to help modernize and align business outcome-driven strategic planning and funding practices to work delivered by Agile teams.
However, as much as organizations agree with Lean Portfolio Management principles and practices, many have struggled with implementation. The reason? It requires a fundamental shift in the organization’s operating model.
In this article, we will examine three strategies for how an organization can effectively begin the journey to successfully adopting Lean Portfolio Management principles.
But first – if you’d like to learn more, check out our three-part blog series on Lean Portfolio Management.
By now, leadership support as a key component to successful Agile transformation is well known – and the need for that support in adopting Lean Portfolio Management is no exception. But understanding the type of leadership support is critical to success.
In my experience as an Enterprise Agile Transformation Coach, I’ve seen many Agile and Lean Portfolio Management transformations being driven by the PMO and the company’s technology leaders. Oftentimes, business leadership does not understand the benefits of Agile and Lean Portfolio Management principles enough to adequately support the transformation. And without support from the business, PMO and technology leadership cannot successfully drive Lean Portfolio Management adoption.
The reason for this is that traditionally, the PMO is responsible for the governance of the processes around delivering large bodies of work (e.g., projects, programs, portfolios). They are what I call “Owners of the Process” because they are responsible for defining, implementing, enforcing, and improving this delivery process.
Organizations can wrongly think Lean Portfolio Management is simply installing a set of new and modern project, program, or portfolio management processes. However, Lean Portfolio Management fundamentally transforms an organization’s strategic planning and funding practices and connects them to downstream execution and value delivery. Therefore, it’s critical that we also obtain leadership support from the “Owners of the Strategy” and “Owners of the Funding.”
These stakeholders are also accountable for the ROI of their investments.
One way to obtain support from business leadership is by generating awareness and creating a sense of urgency.
Help business leaders understand the importance of key Lean Portfolio Management principles such as connecting strategy to execution and funding value streams instead of projects – and help them understand the risks of not doing so.
Finance leadership should also be targeted to build awareness of the benefits of Lean Portfolio Management.
Take a page from John Kotter’s famous 8 Steps for Leading Change by generating short-term wins.
It is easy for organizations to feel overwhelmed when approaching Lean Portfolio Management. Some organizations that I’ve introduced Lean Portfolio Management principles to argued the level of change is impossible for an organization operating in the highly regulated financial industry.
They believe that the only way to adopt Lean Portfolio Management is by introducing small principles and practices across the entire company, little by little. But they admit the approach will probably take a decade before they reach a level of Enterprise Agility.
This way of thinking is what I call “raising the water level slowly.”
It’s understandable for organizations that may be rightly risk-averse due to the environment they operate in. Most of the time, these organizations will choose to optimize for stability. However, in today’s fast-moving Digital Age, organizations must also optimize for innovation to remain competitive.
One strategy that allows an organization to optimize for stability and innovation is to identify a single line of business to adopt Lean Portfolio Management fully. At the same time, the rest of the enterprise continues to operate using traditional portfolio management processes.
This chosen line of business should have the following qualities:
- Adequate business leadership support: Obtain leadership support from the Owners of Strategy and the Owners of Funding
- A Foundation of Agile delivery: Value stream solutions delivered by teams of Agile teams incrementally
- Ability to manage strategic planning and budgeting independently: As the rest of the enterprise continues to operate using traditional strategic planning and portfolio management processes, the chosen line of business has the autonomy to fully adopt Lean Portfolio Management’s strategic planning and budgeting principles and practices
For an organization operating in a highly regulated environment, the chosen line of business can be an area that is considered lower risk for transformation. The key is to fully adopt Lean Portfolio Management principles and practices to realize the value and benefits in this chosen line of business.
The value realization of the short-term wins and gains from this transformation, as well as the lessons learned, can then be used to drive further Lean Portfolio Management transformation across the enterprise.
Contrary to what your first Agile instructor may have said, Agility at an enterprise level cannot be achieved with a whiteboard and sticky notes. Enterprise Agile Planning Tools really matter!
More and more companies realize the need to adopt Enterprise Agility through Lean Portfolio Management, but few are doing so successfully.
The recent pandemic taught us that all organizations must collaborate effectively, both virtually and globally.
Organizations turn to Lean Portfolio Management principles to align business outcome-driven strategic planning and funding practices to value delivery and execution by Agile teams.
It’s critical for the organization to leverage a tools ecosystem that enables them to connect, visualize, and analyze data from strategy to execution to make informed decisions.
Without this, they will experience inefficiencies through manual data entry and unreliable manual reporting as they attempt to connect strategy to execution.
TechRuum’s Enterprise Agile Planning solution provides a world-class connected and scalable enterprise-level Lean Portfolio Management, Agile Program Management, and Agile Delivery platform that enables planning and value delivery from the strategic portfolio level to the Agile team.
TechRuum’s solution effectively supports organizations operating in traditional project-based portfolio management while adopting Lean Portfolio Management for parts of their organization.
If you are ready to embark on your Lean Portfolio Management journey, TechRuum is here to help make that journey a success. Access our on-demand Enterprise Agile Planning demo to see how TechRuum can help your organization drive strategic alignment to corporate goals.