8 Ways to Simplify Lean Portfolio Management

Lean Portfolio Management (LPM) has become a pivotal strategy for many organizations aiming to optimize their product development efforts and align them with business objectives. While the Scaled Agile Framework (SAFe®) is a popular methodology to implement LPM, some organizations find its intricacies, ceremonies, and overhead daunting. For organizations who want the benefits of LPM without the framework, there are other streamlined approaches. Here’s how:

1. Embrace Lean Principles

Lean principles are foundational to an efficient portfolio management process. At its core, Lean emphasizes waste elimination by highlighting value-driven activities and sidelining processes that don’t contribute directly to the end goal. By building quality into every product or project from the outset, organizations can sidestep the often expensive and time-consuming corrections later in the process. 

When embracing Lean, it’s essential to optimize the entire value stream—from the initial idea conception through  delivery. This holistic view ensures each phase is streamlined and remains in sync with overarching business objectives.

Start by grounding your portfolio management approach in the core principles of Lean:

• Eliminate Waste: Focus on value-driven activities, cutting out unnecessary processes, steps and tools.
• Build Quality In: Ensure product quality from the start to reduce costly fixes and rework.
• Optimize the Whole: Look at the entire value stream, from idea conception to delivery, ensuring alignment with the broader business strategy

2. Prioritize Initiatives Based on Business Value

One of the mainstays of effective Lean Portfolio Management is a steadfast commitment to prioritization. Organizations are rife with competing projects and initiatives.Having clear prioritization criteria helps teams channel their energies into the most valuable tasks. These criteria could be defined in terms of ROI, market growth potential, or customer engagement, among others. Additionally, as the business landscape is ever-evolving, it’s prudent to reassess and reprioritize these initiatives as capacity is created to ensure continued alignment with the organization’s strategic direction.

To simplify this process, prioritization is key:

• Establish Clear Criteria: Define clear business outcomes you’re aiming for, whether they’re ROI, user engagement, or other metrics. Look at our Articulating Value Blog.
• Review Just-in-Time: Reassess and prioritize initiatives based on the capacity for work to move downstream.

3. Maintain a Lean Backlog

A portfolio backlog acts as the single source of truth for an organization’s various initiatives. However, over-planning work can often be a source of wasted time and effort. Keeping your portfolio backlog lean will enable you to respond to changing market demands with greater ease and in less time. This means focusing on defining items just-in-time and when portfolio capacity is available to do the work (pull rather than push). 

Reduce waste of upfront planning:

• Just-in-Time Prioritization: Create flexibility to prioritize the most relevant work when there is capacity to begin.
• Just-in-Time Definition: Define work as it’s ready to pull so you are working from the most up to date information before beginning work.

4. Adopt Lightweight Governance

Heavy governance structures can often slow down decision-making and create unnecessary bottlenecks. Instead, adopting a lightweight governance model ensures agility. By empowering cross-functional teams to take the helm of decision-making, based on their intimate knowledge of projects, organizations can make more informed choices. Concurrently, implementing regular feedback loops with stakeholders and other departments guarantees that the portfolio’s direction remains aligned with the business’s needs and any emerging market trends.

Rather than a heavy-handed governance model:

• Empower Teams: Allow cross-functional teams to make decisions based on their on-the-ground insights.
• Implement Feedback Loops: Regularly gather feedback and data from stakeholders and teams to adjust the portfolio direction as needed.
• Learn when to stop: If the work you are doing has already delivered most of the value, should you keep working on it, or should you move it to done and pull something more valuable in? Identifying stopping points is just as important as knowing when to start. 

5. Decentralize Decision-Making

Harnessing the collective intelligence of the entire organization is the cornerstone of Agile practices. Rather than reserving decisions for a select few, allowing teams the freedom to make choices boosts morale and often leads to better outcomes. By investing in training and creating an environment of trust, organizations can be assured that decisions are well-informed and in line with company objectives. 

Minimizing bureaucracy and adopting an inclusive structure can significantly expedite processes, ensuring that projects move forward without unnecessary delays. Teams want to make an impact, give them the opportunity to show their work and the value they have been able to deliver with recommendations on next steps. This also helps leaders align on the value delivered in the whole organization and not just in their portfolio. 

Leverage the collective wisdom of your organization:

• Train and Trust: Equip teams with the skills and knowledge to make informed decisions and trust them to act in the best interests of the organization.
• Limit Bureaucracy: Flatten decision-making structures to speed up processes.

6. Visualize Workflow with Kanban

Kanban boards, with their intuitive design, offer teams a bird’s eye view of the entire workflow. By limiting work in progress (WIP), Kanban ensures that teams are laser-focused on a select number of initiatives, enhancing efficiency and reducing the chances of burnout. Visual markers can easily identify blockers, enabling teams to address challenges swiftly. This visualization ensures a smoother flow of work, highlighting areas of concern and creating avenues for continuous improvement.

Kanban boards, whether digital or physical, are a simple way to visualize work in progress:

• Limit Work In Progress (WIP): This ensures that teams are not spread too thin and can focus on completing initiatives.
• Manage Work Item Age: Bring visibility into work items that are aging beyond a reasonable amount of time (consider a portfolio level Service Level Expectation or SLE).
• Highlight Blockers: This allows issues to be addressed promptly, ensuring a smoother flow of work.

7. Focus on Continuous Improvement

In the ever-evolving world of business, stagnation is not an option. Introducing regular retrospectives at the portfolio level allows organizations to tap into invaluable insights about their processes. These sessions can shed light on areas that are working well and others that may need adjustment. Using feedback as a guiding light, companies can then make the necessary tweaks to their LPM process, ensuring it remains nimble and effective in delivering business value.

Incorporate regular retrospectives at the portfolio level:

• Gather Insights: Understand what’s working and what’s not from a process perspective.
• Implement Changes: Use feedback from Retrospectives to continuously refine and improve the LPM process.

8. Educate and Align

Alignment is a critical ingredient in the recipe for LPM success. Ensure that everyone understands the LPM objectives and process before you kick off. Regular communication sessions, town hall meetings, or workshops can address queries, allay concerns, and solicit fresh ideas. 

Ensure that everyone, from executives to individual team members, understands the objectives and goals:

• Frequent Communication: Maintain an open channel for questions, concerns, and ideas.
• Training: Provide resources or training sessions to ensure everyone is on the same page about LPM objectives and processes.

While SAFe® offers a comprehensive approach to LPM, it’s not the only way. Organizations looking for a more streamlined process can achieve lean portfolio management’s benefits by focusing on core Lean principles, prioritizing business value, and fostering an environment of continuous improvement and trust. The key is to keep the approach simple, adaptive, and rooted in the organization’s unique needs and goals.