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Scaled Agile

Lean portfolio management

by Simon Buehring
Discover how SAFe can elevate your Lean portfolio management to deliver streamlined efficiency and a competitive edge in today's market.
Lean Portfolio Management | agileKRC

Introduction to Lean portfolio management

Lean portfolio management is revolutionising the way organisations approach their project portfolios, combining traditional management with Agile responsiveness.

This modern strategy integrates the oversight typical of portfolio management with the dynamic adaptability of Lean methodology, championing a more flexible and value-oriented approach.

Lean portfolio management ushers in a paradigm shift from rigid planning to a more fluid, outcome-focused mindset that’s essential for success in today’s fast-paced business environment.

What is Lean portfolio management?

At its core, Lean portfolio management is the alignment of strategy and execution by applying Lean and Agile principles at a portfolio level. It prioritises customer value, streamlines delivery processes, and ensures a more transparent and efficient allocation of resources.

By drawing on Agile frameworks, Lean portfolio management strives to maintain a balance between upholding strategic objectives and fostering a culture that embraces change and continuous improvement.

Importance in today’s business landscape

In the modern competitive business climate, the capacity for rapid adaptation is a critical success factor. Lean portfolio management addresses this need by empowering organisations to swiftly respond to market changes, emerging technologies, and evolving customer demands.

Embracing Lean portfolio management not only drives innovation but also ensures that organisations are Agile enough to seize opportunities and mitigate risks in real-time, maintaining a critical edge over the competition.

Lean portfolio management principles

Lean portfolio management distils a set of principles that, when applied, fundamentally alter the traditional approach to managing portfolios. These principles infuse agility, clarity, and an unyielding focus on delivering value, thus steering the organisation towards sustainable growth and competitiveness in an ever-evolving marketplace.

Lean thinking and decision-making

The bedrock of Lean portfolio management is Lean thinking – a philosophy that emphasises the importance of value creation and the elimination of waste. This mindset permeates strategic decision-making, ensuring that every initiative is evaluated not just for its potential returns but also for its alignment with Lean principles. Decision-making becomes inherently customer-centric, with the primary aim of streamlining processes to deliver quality swiftly and efficiently, resulting in a portfolio that is Agile, flexible, and robust against market volatility.

Aligning investments with business value

Critical to the success of Lean portfolio management is ensuring that investments are closely aligned with the business’s core value proposition and strategic goals. This alignment is achieved through rigorous processes such as epic prioritisation and capacity planning, which evaluate the potential impact of initiatives against the backdrop of the organisation’s vision.

Resource allocation becomes an exercise in precision, carefully calibrated to support the most promising opportunities for value creation. Moreover, governance practices like Lean Budgets and Guardrails establish a framework for decision-making that is responsive and adaptive to change while remaining steadfast in its pursuit of the strategic agenda.

Through these processes, Lean portfolio management enables a proactive and disciplined approach to investment that directly correlates with delivering customer value and driving business success. It ensures that every project undertaken is not only justified in terms of its expected outcome but is also a cog in the machine that propels the organisation towards its long-term objectives.

Implementing SAFe in portfolio management

The successful implementation of the Scaled Agile Framework (SAFe) within Lean portfolio management signifies a pivotal shift towards enterprise agility and a sustainable competitive advantage. This framework equips organisations with the structure needed to scale Lean and Agile practices, ensuring that strategic objectives and daily operations move in unison.

Understanding SAFe and its components

SAFe is a layered framework that imbues agility into the fabric of an organisation. It is composed of four primary levels: Team, Program, Large Solution, and Portfolio. Each level operates with a degree of autonomy yet is intricately linked by a shared vision and Lean-Agile principles.

The Portfolio level, where Lean portfolio management is applied, focuses on delivering value through the identification and governance of value streams, investment funding, and the implementation of Lean governance. The key components – from Lean-Agile Leadership to Strategic Themes and Value Stream Coordination – ensure a cohesive strategic direction that is adaptable to rapidly changing market demands.

Steps to adopt SAFe in your organisation

The journey to embedding SAFe within an organisation requires commitment to a clear roadmap and an incremental approach to adoption. The first step involves fostering Lean-Agile Leadership committed to the change required for a SAFe implementation. Following this, establish the foundation of the framework by identifying Value Streams and Agile Release Trains (ARTs), which are the building blocks of a SAFe ecosystem.

Agile training and coaching Agile Release Train Engineers (RTEs) and Lean Portfolio Managers ensure the right people are steering the transition and enabling a culture of continuous learning and Lean-Agile thinking.

With the groundwork laid, the organisation undertakes planning, bringing together teams for a face-to-face event that aligns vision, explores solutions, and sets objectives for the upcoming program increment. This cadence and synchronisation across teams are pivotal for scaling Agile practices effectively. As the system incrementally evolves, teams and leaders alike inspect and adapt their processes, leveraging metrics and feedback for relentless improvement.

The implementation of SAFe is not without its challenges. It demands an organisational culture shift, the adoption of new roles, and a commitment to ongoing education and alignment. However, the outcome is a nimble organisation capable of rapidly responding to market changes and delivering value at a sustainable pace.

By the end of these implementations, the organisation’s portfolio management will have transformed. This section serves as a comprehensive guide for any organisation aiming to harness the benefits of SAFe within their Lean portfolio management practices.

Benefits of Lean portfolio management with SAFe

Merging Lean portfolio management with the Scaled Agile Framework (SAFe) introduces a series of strategic advantages that enhance business performance and agility. These benefits range from accelerating product delivery to optimising resource distribution, all pivotal for a company striving for excellence.

Increased throughput and efficiency

Lean portfolio management, amplified by SAFe, significantly boosts the efficiency and throughput of projects across an organisation. By emphasising Lean principles such as eliminating waste and focusing on value-driven activities, and by leveraging SAFe’s synchronisation across teams, portfolios witness a marked improvement in workflow and product delivery.

This streamlining ensures that projects are not only completed faster but also with greater alignment to customer value and strategic objectives.

Improved resource management

One of the standout advantages of applying SAFe to Lean portfolio management is the superior resource management it facilitates. Through the judicious use of Lean Budgets, SAFe enables organisations to manage funding in a more flexible and efficient manner. Portfolio managers can allocate resources where they’re needed most, ensuring teams are fully equipped to deliver on the highest priority initiatives.

Guardrails, a key component of SAFe, provide further strategic direction, ensuring resources are not squandered on less impactful projects. The outcome is a sharp increase in the return on investment for portfolios, as every resource is optimised for maximum business impact.

The convergence of Lean portfolio management with SAFe’s disciplined approach brings about a transformation in the way resources are managed and efficiency is achieved.

Learn from agile leaders

agileKRC has helped shape agile thinking by leading the teams that developed AgilePM® and PRINCE2 Agile®. We take a practical, success-oriented approach. We begin by taking the time to listen and understand your needs, before offering our real-world experience and expert guidance.

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