Essentials for Effective LPM
Aug 07, 2024
Ten Essential LPM Behaviors
Don’t cripple your LPM implementation
A few years back I helped several large companies in adopting lean portfolio approaches at the same time, and the same set of questions around “what matters most?” kept coming up. People found the “do everything” mindset unhelpful and unattainable in their political realities, and wanted to know where to focus. I wrote this article at the time to capture the list of “don’t miss this” behaviors for companies adopting SAFe’s Lean Portfolio Management (LPM) approach. It still stands up well today and it's not elsewhere on the web, so I'm republishing it.
The Scaled Agile Framework (SAFe) provides a portfolio management model that allows companies to articulate, steer, and capture the benefits of technology investments. However, it is challenging to identify the most important concepts and behaviors among the many practices provided. To help with this, I focus people’s energy around Lean Portfolio Management (LPM) on getting started in a healthy way. Once it’s running, the system gains momentum and continues running very effectively, and quickly becomes the culture for how technology investment money is managed.
I captured ten essential behaviors I believe are necessary to get sustained impact from LPM to help leaders focus during their adoptions. I use these the same way that I use the ten Critical ART Success Factors: to inform where to start, to diagnose why an implementation is struggling, and to reinvigorate a mechanical adoption. If one or more of these behaviors is missing, that’s where I dig in, because the missing behavior inevitably represents an impediment to getting the impact desired.
- Articulate a clear and unambiguous strategy
- Form a balanced portfolio leadership team
- Tie clear outcome-framed goals to strategy
- Map value streams and provide clear visions
- Visualize and publish your maps
- Maintain clear, well-respected guardrails
- Broadcast the kanban and roadmap
- Treat epics as experiments
- Ensure the APMO serves the portfolio
- Reject work and create strategic focus
Articulate a clear and unambiguous strategy
It is impossible to decentralize decisions in a portfolio when the underlying strategy is unclear, unarticulated, or not distributed in a way the people can use it to make decisions. Effective leadership starts with exposing the overall intent along with the decisions and background that shape the intent. This allows people to make faster decisions that are aligned with the desires of the executive team. In SAFe this takes the form of clear and focused strategic themes.
Form a balanced portfolio leadership team
The remaining decisions tend to become higher-stakes and carry increased risk exposure as most decisions become decentralized. The portfolio leadership team needs to make these decisions quickly and effectively, and thus must incorporate all necessary perspectives without dragging out the process. This typically requires technology leadership, business leadership, HR perspectives, architecture perspectives, and finance representation at a minimum. Each of these roles must be a fully participating member of the portfolio team representing their area with authority and trust. The leadership team also needs relationships with leaders within and beyond the portfolio so they don’t miss emerging opportunities. In SAFe, this informs the composition of the LPM function and the attendance of the various portfolio syncs.
Tie clear outcome-framed goals to strategy
Strategies often become poster art and lose the underlying intentions that led to them. One effective tool for preserving meaning is to tie a set of quantitative and qualitative outcomes to them. This allows leaders across the portfolio to focus on improving those metrics. In SAFe, these are often captured in the form of Objectives and Key Results (OKRs), which provide both the aspirational outcome and the quantifiable targets that go with them.
The most common failures when using strategic themes are 1) when they represent work activities rather than benefits, 2) to very narrowly specify them for individual groups where each group has its own OKR and does not need to collaborate with others, 3) to write very long or obtuse OKRs that nobody reads, and 4) to write incredibly broad goals that do not help exclude and focus the work.
Map value streams and provide clear visions
Many transformations start by picking a convenient group and calling it an Agile Release Train (ART). In the same way, companies often start with LPM by drawing a circle around an easy to address part of the organization. This is rarely conducive with continuous funding and management by vision and purpose. It is crucial to map the current organization, the strategies in play, and the future aspirations so the funded investments will flow effectively. Ideally, this exercise also results in designing flow-ready ARTs with clear, distinct visions within those value streams, but at a minimum the current-state organization needs to be mapped and well understood.
Visualize and publish your maps
Often, the value stream mapping is done in a small group, shared with leadership, and never looked at again. This is a waste of a very useful visualization, and it’s important to make the organization aware of the results and the implications of future state goals. SAFe provides a variety of tools in the form of the portfolio canvas, value stream canvases, and Agile Release Train canvases. Use them, maintain them, and publish them prominently so they’re used to make decisions and understand context. Done well, they form the foundation for high-impact executive reporting.
Maintain clear, well-respected guardrails
Decentralizing decisions needs a supporting framework so decisions are made effectively and consistently across the portfolio. Moreso, the large sums of money entrusted to individual product managers makes it even more crucial that long-term concerns of the Enterprise are reflected in how decisions are being made. At the same time, those product managers need space to pursue local goals for the individual products and solutions.
SAFe introduces a useful set of guardrails for this. They ensure short-term needs are balanced against long-term goals and that the business leaders responsible for sustainable financial outcomes are involved in key decisions. Aligning to these guardrails must be a mandatory behavior for leading value streams and products because they form the foundation of trust and governance allowing fast decentralized decisions.
Broadcast the kanban and roadmap
People need visibility to both work and future-state desired outcomes to maintain alignment. In addition to the canvases referenced above, people also need to see what epics are currently under consideration, active, and, most importantly, canceled. This helps them focus their energy and supports pushing back or refusing to do unapproved or disapproved work. The roadmap can be inspiring and provides valuable context to the larger organization.
Treat epics as experiments
The portfolio is a portfolio of solutions and the investments being made into those solutions. Unfortunately, it’s often treated as a project or work portfolio and loses the positive impacts of agility and decentralization. The most common issue is treating epics as projects or as just a pile of features.
The portfolio leadership team needs to focus epics as large-scale strategic experiments. They need an explicit value hypothesis and clearly identified pivot/persevere points. The leadership team needs to help evaluate results and transition epic out of the portfolio and into ART visions or new value streams as soon as the value hypothesis is proven to keep the portfolio lean and focused on high-impact decisions.
Ensure the APMO serves the portfolio
Project portfolios tend to manage most of the work from a central location, which drives the central group to become a control and coordination entity maintaining alignment across many projects in different phases. This alignment work is significantly reduced once LPM is up and running reliably, especially when there are clear mandates for each ART and Epic. The work required from the core group significantly diminishes again when the organization is successfully shaped around value. The Agile PMO must increasingly shift to a service stance alongside an LPM adoption, with a mandate of removing friction from the rest of the organization. As described in SAFe, this behavior increasingly becomes one of “portfolio operations” rather than “portfolio management”.
Reject work and create strategic focus
Finally, the portfolio leadership team must ensure that it eliminates significant amounts of work. Strategy must provide focus and a way of challenging any work that does not advance the strategy. Unfortunately, many portfolios treat the eventual approval of work as a foregone conclusion. This leads to waste and “portfolio theater.” It feels like going through the motions. Instead, a significant portion of the funnel should be discarded before advancing, and the next two stages should also discard additional work based on learning. It is challenging for executives to refuse work, especially work coming from peers with important titles and high-value businesses. However, it is necessary if the company wants to move forward at survival speed.
Remember, part of the LPM executive role is “To kill the good ideas so the great ideas can thrive”.