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lean portfolio management

Introduction to Lean Portfolio Management Why Lean Portfolio Management? How is it different from traditional portfolio management? Portfolio management traditionally was not designed for speed of innovation that this global economy needs due to the impact of digital disruption. Delivering value to customers in shortest sustainable lead time with best possible quality is a challenge in this digital age. The current factors put an additional pressure on organizations to deliver innovative solutions under higher degree of uncertainty. The vision, strategy and investment funding in traditional portfolio is slow and cannot cope up with the speed we need in this era, where we are developing complex and complicated solutions. “Most strategy dialogues end up with executives talking at cross-purposes because… nobody knows exactly what is meant by vision and strategy, and no two people ever quite agree on which topics belong where. That is why, when you ask members of an executive team to describe and explain the corporate strategy, you frequently get wildly different answers. We just don’t have a good business discipline for converging on issues this abstract.” —Geoffrey Moore, Escape Velocity SAFe Lean Portfolio Management takes the approach of strategy and investment funding, portfolio operation and governance to the next level by applying lean and agile SAFe Principles. In this approach LPM is a collaboration between executives, business owners, Enterprise Architects, Agile Product Management Office, Release Train Engineer, and SM Community of Practices. LPM works together to create portfolio vision and strategic themes and then align strategy with execution. A SAFe portfolio is a collection of development Value Streams. Each development value stream builds, supports, and maintains Solutions which are delivered to the Customer, whether internal or external to the Enterprise. How do we define a SAFe Portfolio? We define a SAFe portfolio using the portfolio canvas. Here below is the example of Portfolio Canvas. The canvas has three rows. First is for value proposition and have seven columns which are specific to the development values streams in the portfolio. The second row is for the entire portfolio and have Key Partners, Activities and Resources. The third row is also for the entire portfolio which have Cost and Revenue structures.


What are some of the activities the LPM pays in an enterprise? LPM is a collaboration and there are three key dimensions within this competency in SAFe which are shown below.

Strategy and Investment Funding The strategy and investment funding collaboration requires executives, Business Owners, portfolio stakeholders, technologists, and Enterprise Architects. Together they are responsible for the below.

a) Connecting the Portfolio to the enterprise strategy b) Maintain a Portfolio Vision c) Realize Portfolio Vision through Epics d) Establish Lean Budgets and Guardrails e) Establish Portfolio Flow

Agile Portfolio Operations The Agile portfolio operations is a collaboration and responsibilities of the Agile Program Management Office/Lean-Agile Center of Excellence (APMO/LACE) and Communities of Practice (CoPs) for Release Train Engineers (RTEs) and Scrum Masters. Together they are responsible for the below.

a) Coordinate between development value streams b) Support the Program Increment execution c) Lead Relentless Improvement and Excellence

Agile Portfolio Operations The Lean governance too is a collaboration between Agile PMO/LACE, Business Owners, and Enterprise Architects. Their responsibilities are described in the following sections. Lean Governance manages spending, audit and compliance, forecasting expenses, and measurement. Measure portfolio Performance SAFe Lean Portfolio Management also needs to track their progress and this is done by establishing the minimum metrics needed to make sure the below

a) Strategy is understood and implemented well b) Funding and spending are aligned with the strategic themes c) We are continuously improving the delivery of value to our customers

Lean Portfolio Management Events LPM function relies on three significant events to deliver the effective operation which are held mostly on a cadence:

a) Strategic Portfolio Review b) Portfolio Sync c) Participatory Budgeting


Kaizen is about changing the way things are. If you assume that things are all right the way they are, you can’t do kaizen. So change something! —Taiichi Ohno Portfolio Sync The portfolio sync provides visibility into how well the portfolio is progressing toward meeting its objectives. This event has a more operational focus than the strategic portfolio review.The topics discussed typically include reviewing epic implementation, the status of KPIs, addressing dependencies, and removing impediments. The portfolio sync is typically held monthly and may be replaced on a given month with the strategic portfolio review Strategic Portfolio Review This is to provide strategy, funding, budgets and execution alignment. Strategic portfolio review is focused on tracking the achievements and advancement of the portfolio vision. This enable value streams to inspect and adapt to any changes, it’s typically held on a quarterly cadence, at least one month. Ideally we should do it before the next PI Planning.



Participatory Budgeting (PB) Participatory budgeting is a critical element of Lean Portfolio Management since it helps establish and adjust Lean budgets for value streams. A group of stakeholders decides how to invest the portfolio budget across Solutions and Epics. The resulting data is used to finalize any adjustments needed to the value stream budgets. These budgets are typically adjusted twice annually using PB. If adjusted less frequently, spending is fixed for too long, limiting agility. Also, although more frequent budget changes may seem to support increase agility, they may create too much uncertainty and an inability to commit to any near-term course of action. Summary Successfully defining and executing a strategy in a world of increasing uncertainty is challenging. It requires portfolio management practices modernized by applying Lean-Agile thinking and a portfolio organized around value streams that deliver a continuous flow of value to the enterprise’s customers. About Advance Agility We, at Advance Agility, are the new-age Agile Coaching, Consulting and IT services company. We enable end-to-end Digital Transformation. Agile execution is integral to our being. We are doing SAFe implementation with small, medium and large organization across the globe. Our vision is to be the leading Agile execution player globally. To keep adding value at every process stage. We are on a mission to empower our clients, move from concept to cash in the shortest sustainable lead time by adopting human centric approach to business agility. Embracing the change is in our DNA. Things that keep us apart are Quicker and Seamless execution with End to end gamut of services. Our Global presence and Stellar Track Record gives us an edge over our competitor. Connect with us at advanceagility.com to learn about SAFe and SAFe Implementation. Write to us at contact@advanceagilty.com for any agile training or consulting needs. We are always looking for competent agile trainers as well. So if you are the one or want to become one, do get in touch with us to that we can learn, grow and achieve together.

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