Five Things Successful Enterprises Do to Adopt Lean Portfolio Management (LPM)

Friday, July 21, 2023

Lean Portfolio Management (LPM) helps organizations achieve business agility and better outcomes by aligning strategy, execution, and value delivery. The LPM function has ultimate responsibility for decision-making and financial accountability for the solutions in a SAFe portfolio. However, adopting LPM can be challenging for many enterprises.?

This blog will discuss the five successful things enterprises do to adopt LPM.

1. Adopt and Improve LPM early in a SAFe implementation?– Enterprises that adopt LPM early in a SAFe implementation can establish a solid foundation for Agile transformation and realize the benefits sooner. Adopting LPM at the beginning of a SAFe transformation also helps leaders understand how to apply Lean and Agile in their context. Consequently, this tends to increase the buy-in and engagement of leaders.

2. Move from Project to Product?– A project-to-product (P2P) approach is a shift in mindset that focuses on the continuous development and delivery of a product rather than the completion of a specific?project?that often has a fixed scope, schedule, and budget. The P2P approach fosters a culture of collaboration and cross-functional teamwork. Rather than working in isolated silos, a long-lived team of Agile teams incrementally develops, delivers, and often operates one or more solutions (products and services) in a value stream.

3. Optimize Portfolio Flow?– Enterprises that focus on optimizing portfolio flow can quickly respond to changing market conditions, and customer needs, reduce time-to-market, and increase customer satisfaction. Achieving continuous flow requires a new way of working that eliminates the traditional start-stop-start project cycle and the waterfall phase gates that hinder flow. SAFe defines a set of eight flow accelerators in the new?Principle #6, Make Value Flow without Interruptions, that help address, optimize, and debug issues with achieving continuous value flow. The new?Portfolio flow?article describes accelerating the flow of the significant initiatives (Epics) needed to accomplish the Portfolio Vision and advance the Enterprise strategy.

4. Measure Outcomes over Outputs?– LPM focuses on delivering value to customers, and measuring business outcomes, such as ROI, customer satisfaction, and time-to-market, are critical to success. Enterprises that measure?business results?(KPIs) and?outputs?(Features) can make data-driven decisions about portfolio, value stream, and ART investments, improving their ability to make fast, positive changes to the business. Use leading indicators to evaluate the results of developing and releasing a Minimum Viable Product (MVP). These may include non-standard financial metrics such as active users, hours on a website, net promoter score, and more.

5. Use the LPM adoption roadmap to implement and improve practices: The fifth successful thing enterprises do to adopt LPM is to use the LPM adoption roadmap to implement and improve practices. The LPM adoption roadmap below provides a structured approach to adopting LPM and enables enterprises to enhance their practices over time. Enterprises that use this roadmap can establish a culture of continuous improvement and achieve sustained agility and adaptability.

Summary

Adopting LPM can be challenging for enterprises, but there are five successful things enterprises can do to adopt LPM. These include adopting and improving LPM early in a SAFe implementation, moving from a project to a product mindset, optimizing portfolio flow, measuring outcomes over outputs, and using the LPM adoption roadmap to implement and improve practices. By adopting LPM, enterprises can achieve sustained agility and adaptability, enabling them to stay competitive in today’s fast-paced business environment. Contact us to learn more at?[email protected]. Register for?Richard Knaster’s LPM Class September 26th-27th here.