What is Lean Portfolio Management?

In today’s increasingly competitive environment, businesses must keep evolving to stay relevant and achieve their goals. To do so, they must use Lean Portfolio Management (LPM) to focus on enterprise agility. LPM provides an effective way to manage strategy and investment, aligning with Lean-Agile values and principles. This blog will explore what Lean Portfolio Management is, its benefits, and how to implement it.

What is Lean Portfolio Management?

Lean Portfolio Management (LPM) is a structured approach to aligning investment strategy with business goals. It is an essential part of the SAFe (Scaled Agile Framework) framework and is grounded in Lean-Agile principles.

LPM focuses on creating a collaborative environment where teams can work together to achieve shared goals. Using standardized planning and tracking practices, LPM ensures that everyone in an organization can contribute to the overall strategy. This not only aligns different perspectives but also facilitates effective decision-making.

Benefits of LPM

Adopting Lean Portfolio Management comes with several benefits, including:

• • Transparency
    LPM provides transparency around the financial performance of an enterprise and the strategic direction towards which it is moving. This allows stakeholders to make informed decisions with confidence.

• • Improved Decision Making
    Aligning the organization’s strategy with its Lean-Agile principles, LPM ensures that decisions are made collaboratively rather than relying on intuition or individual preferences. It provides real-time information to stakeholders, empowering them to make quick, accurate, and coordinated decisions.

• • Agile Planning and Delivery
    With Lean Portfolio Management practices, planning becomes more agile, providing visible progress against pre-determined targets, leading to faster delivery of outcomes.

• • Increased Productivity
    LPM allows organizations to identify the most important goals for the enterprise, which can then be prioritized and aligned across different domains. This can lead to increased collaboration, productivity, and efficiency.
    How to Implement LPM
    Implementing LPM in an enterprise involves several steps:

• • Define the Goals
    The first step in implementing LPM is to define the enterprise’s strategic goals. This involves identifying the organization’s value streams and mapping these streams to the corresponding desired outcomes.

• • Create a Portfolio Backlog
    The next step is to create a portfolio backlog that details all the initiatives that need to occur to achieve the enterprise’s strategic goals. It should contain all available information, including business cases, potential risks, and the expected impact on the enterprise.

• • Prioritize the Portfolio
    After creating the portfolio backlog, the next step is prioritizing the portfolio items based on their alignment with the enterprise strategy. The most important goals should be the top priority and be allocated more resources to ensure their success.

• • Allocate Budgets and Resources
    Once the portfolio items are prioritized, the next step is to allocate budgets and resources. This includes identifying the resources required for each initiative, including personnel, equipment, and other resources. An appropriate budget is allocated to the elements based on their potential impact and prioritization.

• • Plan and Coordinate Execution
    The final step is to plan and coordinate the execution of the initiatives. Depending on their complexity and interdependence, initiatives may be broken into smaller manageable tasks and executed by cross-functional teams who work in coordination.

Contact Enterprise Agility

In today’s rapidly changing business environment, organizations must adopt enterprise agility through Lean Portfolio Management (LPM) to stay competitive and achieve their goals. By aligning investment strategy with business goals, LPM ensures that decisions are made collaboratively, enabling the enterprise to remain agile and responsive to changing requirements. Lean Portfolio Management provides significant benefits, including increased transparency, improved decision-making, agile planning and delivery, and increased productivity. Efficient and effective implementation of LPM involves:

• • Defining goals.
  • Creating a portfolio backlog.
  • Prioritizing portfolio items.
  • Allocating budgets and resources.
  • Planning and coordinating execution.

Every enterprise must adopt the Lean Portfolio Management approach to remain competitive and agile. By prioritizing the most important goals of the organization, allocating appropriate human and financial resources, and facilitating collaboration, LPM leads to the success of the enterprise.

Enterprise Agility is not just a buzzword but a necessity for organizations seeking to remain competitive and relevant in today’s business environment. Implementing Lean Portfolio Management provides a collaborative approach to achieving shared goals, aligning investment strategy with business goals based on Lean-Agile principles, and promoting transparency and enhanced productivity.

By understanding and implementing LPM’s principles, businesses will become more agile, which increases competitiveness, market share, and profitability. So, let’s embrace the power of Lean Portfolio Management. For more information, reach out to us.