How to get started with Lean Portfolio Management

Lean Portfolio Management (LPM) describes the process undertaken by a portfolio or product manager to apply Lean principles (or steps) to execute a portfolio strategy. LPM focuses on aligning business strategy with agile development to drive value, improve agility, and minimise waste.

Let’s take a look at the five basic principles of Lean management:

1. Identify the value of your product or service.
2. Map the value stream.
3. Create flow and promote efficiency by eliminating waste from your workflow.
4. Respond to customer pull by focusing on products in demand.
5. Embrace continuous improvements to your workflow.

Follow these six steps to put LPM into action for your next project.

1. Assemble your A-team
   The right people with the right skills and knowledge are essential for successful LPM. Your portfolio managers should excel at gathering data, monitoring project performance, and influencing those in charge of priority management.
   
2. Secure funding
   As you might expect, there are costs involved with transforming business strategy into execution. Finding funding usually means working with existing resources and figuring out where a project fits into the budget—any gaps and you will have to restructure the project. Identify the projects that cost the most and are of highest priority to stakeholders and evaluate the budget to allocate funding.
   
3. Outline your game plan
   The next step is to build your operating structure, which will establish your approach to the project. What area will you start working on first? Will everyone in the team work on different parts or together? Remember the five principles of Lean methodology, as outlined above, and identify inefficient practices in your original portfolio management method.
   
4. Establish a Lean workflow
   The next step is to establish a lean workflow by removing inefficiencies and anything holding up your portfolio management process. Identify your past mistakes and then try a different approach. For example, instead of the whole team working on one role, task, or area, you could allocate different roles to team members to make the operation run faster. You can establish a pull system to notify you when each stage of the process is complete, or you might try using portfolio management software, Kanban tools, or Gantt charts to visualise the different stages of your portfolio management process.
   
5. Polish up your workflow
   Implementing Lean initiatives is a big adjustment, so you'll likely need to add upgrades and make amendments. It's good practice to approach the process with a flexible mindset focused on continuous improvement.  
   
6. Celebrate your success
   The achievement of bringing your business strategy to life and implementing Lean principles is worth celebrating—even if things don't go to plan. Any mistakes you make can be lessons you use to optimise and refine the process for next time.

Once adopted, LPM is a new way of managing a portfolio that can help you improve your agile workflow and drive the value of your delivery. Implementing LPM will take time, patience, and focus—primarily if your team uses a traditional portfolio management system.

The most common challenges that hinder organisations from fully embracing effective LPM fall into three main categories:

• Challenges with alignment: When different levels of your organisation are disjointed, it's more difficult to communicate strategy or move towards established goals.
• Challenges with predictability: When disjointed teams work with gaps in the data needed to guide them, releases become more complex, and KPIs can become neglected.
• Challenges with governance: Organisations face challenges with agility when metrics, reporting, and monitoring are poorly controlled.

An overarching management platform can help you address these challenges and is the best way to set your organisation up for success. A good platform can keep programs and release trains moving, provide your program managers with a top-down approach to monitoring and managing widespread development teams, and connect top-level strategy to day-to-day activity.