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Enterprise Agile Planning, Lean Portfolio Management

Lean Portfolio Management: Frequently Asked Questions

Published By Emily Peterson


We recently did a webinar with Richard Knaster, SAFe® Fellow at Scaled Agile, Inc, and Jon Terry, Chief Evangelist here at Planview, called “Lean Portfolio Management: What is it and how is it changing value delivery?”

We encourage you to listen to the full webinar, but in the meantime, read below for answers to the questions asked by the participants and answered by Jon Terry.

Lean Portfolio Management: Frequently Asked Questions

1. Our people have day-to-day jobs and also are subject matter experts on projects. How can they be on this dedicated value stream?

If this is your current state, then full-blown SAFe®, especially Lean Portfolio Management (LPM), is probably too much at this point. LPM is based on the idea of stable, cross-functional teams. It’s building on the Agile experience that, if we keep teams together longer, they are more effective over time, than if we are “borrowing” people from functional departments for temporary projects.

Your organization may need to build up your experience at the Agile team level. However, we do think it is possible to do LPM even if you are still managing work by schedules and projects. To make that work, your value streams need to represent all of the work.

Value stream isn’t an Agile term for a big program to change things. The next question expands on how to start building from what you currently have to LPM.

2. How does the portfolio determine the value stream funding—how to sort out reconciling local work and portfolio epics?

For most companies, the way to get started on this is to look at historic spending. In theory, companies have projects, which means, they are carefully shifting their use of capacity based on annual priorities. In practice, companies end up spending relatively similar amounts on the same products and aspects of their business year over year. You likely projectized it, as if you had a choice, but in fact, once you build products and put them in the hands of customers, they demand enhancement and maintenance. Supply creates its own demand.

So, analyzing a few years of spend and looking at the patterns of how much gets spent on things, and who worked on what will give you a reasonable baseline to remove the friction of the projects, and simply say, “This is how much we will spend on the domains (value streams).”

The phrase we’ve heard used for this is, “looking for patterns of persistent demand.” Once you’ve established these patterns, the balance between local work and portfolio epics is part of why you create roadmaps at the LPM level that are brought to Program Increment (PI) Planning at the release train level. You are continuously balancing what you’d like to get accomplished at the portfolio level and what you reasonably can do given the realities of products in the field.

Lean Portfolio Management for the Enterprise

3. What are the funding model options while transitioning to Lean Portfolio Management?

Expanding on the question above, you can (and we would advise) think about taking an LPM investment approach, even if you are still executing via projects in parts of your business.

However, we would suggest that, as much as possible, each value stream be either primarily Agile or primarily schedule / milestone / project in their way of working. You might call this bi-modal. As your organization moves to Agile, you switch each value stream’s way of working when they are ready to make the move.

What we don’t recommend is an overly hybrid approach, where any given value stream tries to live with lots of Agile and lots of milestone-driven work at the same time. It’s incredibly hard for people at the team level to try to live in both approaches; it’s hard to set up systems to manage; it’s hard to build the culture, when people are pulled in different directions.

4. How do you maintain good “governance” within LPM?

The cadenced nature of PI Planning, getting everyone together every 10-12 weeks, actually creates a tremendous framework for strong governance. You can embed security, enterprise architecture, audit, etc.—whatever makes sense for your organization and its compliance needs—into the release train. As people plan their work, you have the opportunity to emphasize priorities around these aspects of governance and allow the teams to ask questions of those experts to ensure work is getting done the right way the first time.

5. I have experience applying the SAFe® value stream model, but I struggle to apply Operations vs Development vs Products. I understand how you can apply the theory to a “service,” but it’s unclear the difference between these when you sell a product.

I think when I read this, that I’m hearing somebody equate “product” to the technical application—just the software. In fact, when we say “product,” we do mean the service. We mean all of the people, the processes, and the technology that provide value to customers in some aspect of our business. These may be products that you sell but also can be productizing some internal aspect of your company—such as supply chain.

6. Is it fair to say that this strategic theme guidance follows a similar approach to OKRs (Objectives and Key Results)?

Yes, while OKRs emerged independently of SAFe, they are highly aligned with what SAFe means when they discuss strategic themes. In fact, SAFe is now adding OKRs into the framework to make that clearer and easier.

7. Does a program epic need a Lean Business Case, firstly when it contributes to a wider portfolio epic, but also in the case when it doesn’t?

I think some of the work that a release train does comes from “above.” A portfolio epic stemming from a strategic theme causes one or more release trains to do work. Of course, that big of an effort needs a business case so everyone understands why we’re investing this much effort and what we think we’re going to get out of it.

Portfolio epics should not specify the how, but instead should set out what we are trying to accomplish. Some of the work the release trains do is generated within the release train. We’ve aligned a group of people, teams of teams, with a value stream, because we want to delegate decision-making authority to those closest to the work—both the business customers and technical people building the products. Some of those things that they decide to do are going to be big efforts—release train level—where it’s logical to explain and justify the work because it’s taking a lot of capacity, and you shouldn’t do that without thinking it through—i.e. Lean Business Case.

But some of the things the teams do are maintenance, enhancements, and small pieces of value that it would be silly to weigh down with a lot of bureaucracy. This is why we do Program Increment (PI) Planning, so that we can uncover these things on the fly.

8. How do you define the difference in accountabilities between the LPM team and the ‘Business Owners’?

In Lean Portfolio Management, accountability for outcomes lies with the Business Owners, to whom the release trains have been allocated / aligned. The company delegated the use of this capacity to those Business Owners, on a renewing but revocable basis—based on achieving results (value to the customer).

The Agile Portfolio Operations group is responsible for facilitating, instrumenting, and elevating metrics—relating to both business outcomes and continuous improvement. Their role is to ensure that senior leadership has the information they need to shift capacity between value streams, based on organizational priorities and outcomes. And, their role is to ensure that the release trains are measuring things like cycle time, quality, employee morale, and the other sorts of things that helps us understand whether they are improving as teams. If not, the Agile Portfolio Operations group must ensure that coaching resources are brought to bear to solve the problem.

Getting Started with Lean eBook

9. When you are applying portfolio, therefore in my backlog I have both portfolio and program epics, do you expect these to all live in the same Kanban?

Yes. Your portfolio Kanban should visualize all of the work your release trains are taking on. It’s probably wise to visually differentiate those two types of work to understand the balance of investment.

10. What does WSJF stand for?

In simple terms, WSJF (weighted shortest job first) is a way of comparing work that combines the value of the things with their time sensitivity. It’s not good enough that something be valuable. In an Agile world, we have a preference for things we can deliver quickly.

If you’d like to hear more, be sure to listen to the webinar for more details on what Lean Portfolio Management is and how it’s changing value delivery.

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Written by Emily Peterson Sr. Demand Generation Manager

Emily Peterson is a Demand Gen Manager for Planview's Enterprise Agile Planning Solution, focusing on helping organizations achieve agility on their terms and timeline. She uses her professional experience in Agile marketing (as the RTE) to leverage new ways of working across the organization, connecting all parts of the business to the overall goals of the organization.