Eight ways to refine your Lean Portfolio Management

To achieve the full potential of their agile transformation, organisations must work out how to become and stay aligned. That is why many businesses are taking steps to embrace Lean methodologies.

An extension of Lean methodology, Lean Portfolio Management (LPM) is the application of agile practices across a large portfolio of business objectives. Its main goal is minimising waste and careless spending, helping organisations maximise efficiency and value.

Like most things in life, with LPM, you get out what you put in. It's important to fine-tune your LPM processes to unleash their full potential. In this blog, we will explore the best ways to do this.

For an overview of LPM, read our blog: Getting started with Lean Portfolio Management. To explore the differences between a Strategic Portfolio and a Project Portfolio, click here.

1.        Embrace agile and Lean practices

LPM is built on agile and Lean practices, leveraging both to drive efficiency and responsiveness. Embracing agile methodologies like Scrum and Kanban enables teams to deliver value frequently, respond to feedback, and adapt quickly to changing circumstances.

2.        Use Kanban to visualise and manage dependencies

Dependencies can affect your work's quality, speed, and scope, creating bottlenecks or delays if not managed properly. Kanban can step in to help you visualise and manage dependencies. Its flow-based system helps teams visualise and understand their workflow, optimise efficiency, and improve relentlessly. Through shared Kanban boards and charts, stakeholders better understand where their priorities fit into the overall picture. Plus, it's easier to manage stakeholder expectations when they have insight into the full scope of the workload on display and a view of the importance of other resource requests. Thanks to its exceptional level of visibility, Kanban is being adopted by many organisations to help them embrace Lean and agile principles, and it's spreading to different parts of the business.

3.        Apply Lean governance

LPM embodies lightweight governance structures that empower teams and promote decentralised decision-making, enabling quicker responses, streamlining decision-making, reducing bureaucratic overhead, and encouraging a culture of ownership and accountability.

4.        Establish agility throughout the portfolio

The portfolio is only as successful as its weakest team. Leaders must establish a robust and agile culture with all teams throughout the portfolio. An extensive portfolio requires agile principles used at the team level to be scaled, followed and shared organisation-wide.

5.        Use Work In Progress (WIP) limits

Setting a WIP limit means saving time and money. A WIP limit sets the maximum amount of work in each workflow. Limiting the amount of work in progress makes it easier to identify inefficiency in a team's workflow. Suppose too many items are fed into the WIP queue. In that instance, teams can find themselves dealing with an overwhelming number of items, which can lead to adverse consequences like bottlenecks and low morale. With a WIP limit, you can manage how much work moves through your process. A manageable number of projects at a time makes it easier to prioritise projects, and teams can remove those no longer necessary from the backlog.

6.        Embrace team diversity

Each team in an organisation should understand and work towards the overarching company goals and vision. However, individual teams should be encouraged to develop their method of optimising processes and delivery. For instance, agile teams have different release cultures: Scrum teams often release software at the end of each sprint; on the other hand, kanban teams practise continuous release. At the portfolio level, teams can have different workflows and processes, even when both departments are united in following agile principles. Diversity gives large agile portfolios the gift of shared knowledge and promotes a greater fluidity and movement of knowledge.

7.        Foster collaboration and communication

Organisations that have mastered successful communication across the portfolio share knowledge, break barriers between organisational silos, and regularly share context throughout the organisation. Make goals, progress, and stumbling blocks transparent for everyone to strengthen a culture of transparency. This nurtures respect between teammates and coworkers outside the team, regardless of role within the organisation.

8.        Establish metrics and feedback loops

If you are to measure the success and performance of the portfolio, relevant business and flow metrics are vital – they can help you assess progress, make data-driven decisions, and identify areas for improvement. You can set up regular feedback loops and review mechanisms to get started.