Agility in Portfolio Management: Aligning Strategy and Execution with SAFe Lean Portfolio Management at SKILup Days 2024

Hello everyone and welcome to Agility in Portfolio Management. So in the next 30 minutes, we're gonna talk about aligning strategy and execution with Safe Lean Portfolio Management. So what are we gonna cover is what is Lean portfolio management?

What are the key components? What is the, actually the issue with the traditional approach? And why would lean portfolio management matter?

How you can get started with that, and also how you can measure your lean portfolio management maturity. Before we dive in, let me quickly introduce myself. So my name is Christina.

I've been into Agile Projects for eight years now. Uh, five of those. I'm working as a freelancer with my own company.

I started actually as a product owner, then moved to Scrum master roles, became released engineer. In the recent years, I'm actually supporting companies as agile coach and lean portfolio management expert. So you can also see a few companies where I have worked and, uh, supported.

Um, on the right hand side, um, I started in the H and Vienna and lived and worked, um, quite internationally actually, so far, which, uh, which I really like. So, um, let's get started with topic. So what is Lean Portfolio Management?

So, lean Portfolio Management is a core competency within the safe framework that aligns strategy with execution. So basically, we wanna make sure that whatever our company's objectives, strategic objectives are, uh, are aligned with what our teams and our agile restraints and all the departments and all the people who are working for the company are working on the right things, on the right products, and that we can achieve our organizational goals. So this is also the main key objective of Lean Portfolio management, is aligning strategy and execution and just making sure that everything goes towards the right direction.

The other key objective of Lean portfolio management is to optimize the value flow, because of course, we also wanna make sure that we do it in a lean manner. So as the, as the framework suggests, it's lean portfolio management. So we wanna make sure that the, the value stream that we are, uh, choosing, or basically our structure and our processes, um, are efficient.

There is no waste and, uh, we can deliver value as quick as possible, right? So when we go into this direction, we also wanna look how we can optimize the value flow through our system. Lead portfolio management, um, consists of three main components, and for every component, uh, safe actually, um, defined a group of people, um, or some roles who should be responsible for that.

So this of course is gonna differ from company to company, depends a lot on your size and what you're trying to achieve for that. But the three components, uh, basically remain, uh, the same, which you would have, uh, to have. So on the very top, we have the strategy and investment funding.

So basically here we have, uh, a group of people or certain roles who are gonna be responsible for defining our strategy and also making sure that the funds or the investments are going into the right initiatives. The second component is the Agile portfolio operations. Um, and as the name already suggests, this is more the operational level, and here we wanna make sure that our Agile restraints, our teams, our departments, or whoever is working on our strategy initiatives, um, that they can do it, um, seamless, and they don't, they don't have any, uh, bottlenecks or any impediments, which they're of course gonna have.

So this age of portfolio operations, uh, group or group of people is actually there to support them and to align between the two levels. And the third component is the lean governance. And the lean governance is there to establish clear policies, uh, and metrics to manage the financials compliance and performance tracking across the portfolio.

So we wanna make sure here that we are of course follow rules, regulations, compliance matters that are relevant for us, uh, and also we wanna establish a certain metrics, how we can track, uh, how successful we are, of course. And together these three components should actually create a very well balanced, flexible approach to manage your portfolio management. So what is the issue with the traditional approach?

You might be asking yourself, why cannot we just continue the way we used to do it? So too many things are changing too rapidly nowadays, right? So be it the budget, be it the scope, be it the priorities, be it the resources, be it the management itself, and basically planning one year ahead, the way it's currently been done, um, or yeah, the way current companies are doing it, it's basically very unrealistic and doesn't fit into today's, uh, world anymore.

So the issue with the traditional approach is that it's inflexible. Um, yeah, it, it gives us, gives us an inflexible planning cycle because we need to start, uh, or basically the company's already starting, uh, the previous year, sometimes even mid of the previous year, planning for the next year, right? And, and in that way it's, it makes it very inflexible because you don't know what's gonna happen and you're already looking in certain projects, um, and certain resources into that, and then you actually have a slow response to change.

So that will be the second point, because once everything is set and done, um, usually, uh, there is no room for adaptation or respond to changes, um, if we have to. So inflexible planning cycle, slow response to change, resource misalignment, because here as well, we already allocate our resources to the certain projects and product and initiatives a year ahead. And then if something changes, then basically we are not flexible enough, um, to, to adjust.

And sometimes we have, or quite often actually, we have ed decision making. So decisions are often made in installation, leading to lack of alignment across the organization. And basically we just don't have this cohesive, um, strategy that everyone follows, and there is no clear, uh, red line basically, which aligns all the departments, all the teams into one direction.

So why does, uh, lean portfolio management matter? Um, well, as we said, the traditional approaches to portfolio management were not designed for global economy or the impact of the digital disruption. So this factors, however, put a lot of pressure on companies to work under higher degree of uncertainty, which was simply have, um, and yet it's expected of them to deliver, um, even quicker and better solutions, um, to the market.

So why do we need lean portfolio management? It's basically to create, create more alignment, which we don't have. Also to create transparency, which is, um, sometimes either it's, uh, non-existent or it's only very limited.

Um, usually we have too much in the system, so a lot of companies are struggling with that. They have too many projects, too many products, too many initiatives all going on at the same time. Um, and it's just overloading the system, basically, which makes us inefficient.

Um, again, and at the end, we don't even know if that what we're doing is aligned with our strategy or even bringing the value that we want to create. And, uh, agility missing at the top. So nowadays, um, a lot of companies, of course, established, um, agile methodologies, um, or agile ways of working on the, on the team level, um, or on team, um, within their teams on operational levels.

But at the top, uh, we're still missing it. So at the top, it's still very, um, rigid, it's still very traditional, um, right? And with Lean Portfolio management, um, we have an opportunity to bring the agility also to this level of our organizations.

So why, uh, why is Lean Portfolio Management the future? Well, because it offers us, uh, the continuous adaptation, or it give us, give us the framework, um, to be able to do continuous adaptations, um, dynamic resource allocation, strategic alignment across the portfolio, because at the end, this is really what we want, and enhanced agility, agility and responsiveness, uh, at the portfolio level as well. So how can you get started with Lean Portfolio Management?

Now, you heard all this and you might think to yourself, okay, sounds good. I wanna, I wanna try it out, right? So if you wanna get started with Link portfolio management, there are kind of five initial must have steps, um, you have to take.

So there, uh, I'm not gonna say that they're easy, they're not. Um, and there's of course, way more work to do for that. But this is kind of like the five steps you definitely have, uh, have to do, uh, to be able to get, um, to get started.

So the first step would be to define your strategic themes in case you don't have them. Um, so what is, this is basically your high level business objectives that guide the organization's investments and initiatives. Basically, what are you trying to achieve, uh, or what does the organization try to achieve?

So examples could be expand digital channels to enhance customer reach and engagement, optimize supply chain, uh, processes to reduce lead times and boost responsiveness, or accelerate development of eco-friendly products to meet growing sustainability demands. So whatever is that, that you're trying to achieve, why does that matter? Because we wanna have the alignment, of course, um, and we wanna create some sort of focus.

So we just heard there's usually way too much in the system and the same time going on. So we wanna create a focus within our company, what are we gonna focus on? What is what is important, um, in order to achieve those, uh, strategic goals?

And of course, also the investment. If we know what is important, then we can allocate our budgets, um, accordingly. And prioritization is also very important, uh, um, aspect of that.

Once we know what we're trying to achieve and which direction we're going, then of course it's way easier to prioritize the projects, the products, the initiatives, and so forth and so on. So how can you get started? Well, first of all, identify your business objectives.

Um, if you are the CEO or some sort of, uh, senior leadership, um, in a company, then you probably know them already. Um, if you've been given the task to do it, then you need to engage with your executive leadership team and try to find out like, what is the strategic goals of the company and what are they trying to achieve? Then we want to translate them into themes, right?

So here I have a few more examples. For example, increased market presence in new regions or streamline operations to reduce costs, accelerate the development of inno, uh, innovative products, um, that meet evolving customer needs. So here as well, whatever the strategic goals, um, you have in your company, then once we have those, we want to communicate them, right?

So we wanna make sure that everyone in the company knows them and understands them, and then we can start to align what we're doing with those strategic objectives. And then we wanna review them on a regular basis and adjust if we have to, right? Because we heard that's exactly why the traditional approaches, um, are not suitable anymore because too many things are changing too quickly.

So on a regular basis, we wanna see what's happening in the market space, um, uh, with the customers, with the competitors, with the trends, and, and then see if we need to adjust, uh, anything or not. Step number two would be to establish a lean portfolio management function. What is it?

It's, it is a dedicated team or a group of people who's gonna be responsible for the lean portfolio, right? And, uh, typically it includes, uh, portfolio managers. So this could be your CEO, definitely, uh, it could be one person, or you could include some more.

For example, some business executives or some directors. Um, then we have the Epic owners. That could be your department heads or seniors, and they would be actually the ones who's gonna be responsible for certain projects or initiatives or projects, right?

So they're gonna be owning a topic. Um, we have the executive enterprise, um, um, architect or architects depending on the size of your company. So this is your IT managers or system architects.

And they basically have to make sure that the technological landscape, um, is there, or that the technological landscape enables us to actually achieve those business objectives. And we can include some product, uh, product managers that will be your project managers or product directors, basically with the deep insights into certain areas of the business or certain products or certain services. And they can help us, uh, with their information and their experience to make better decisions.

Why do we wanna have it or why is it important? Well, we wanna have a centralized governance, like we already said. We wanna create this alignment, right?

And wanna make sure that everything goes towards meeting those strategic objectives of the company. Um, then, uh, agility and adaptability and continuous improvement. And then of course, the lean portfolio management team is gonna be also responsible, uh, to adjust it whenever it's needed.

And of course, improve, um, the process, improve the structure, um, improve the performance or whatever issues we're gonna identify. So how, how to go about it or how to get started with that. Well decide who is gonna be in your lean portfolio management.

Um, don't, uh, don't make it too complex in the beginning. Um, just straightforward. Who do you think you need there?

And if you then realize some other roles are missing, you can always appoint them, right? So, um, then the most important part is define the roles and responsibilities. Um, clearly define what they're gonna be responsible for.

So it's, um, everyone is aware of that. So if we take the example of the Lean Portfolio managers, it's definitely should be your CEO, and you might want to include a few more people there. So they're gonna be the ones who are gonna define and oversee the entire portfolio, making sure that all the initiatives, um, align towards the strategic objectives.

They're gonna be the ones who are gonna prioritize the initiatives and also be responsible for the budget. At the end of the day. The Epic owners, for example, uh, those people gonna manage large scale initiatives.

Uh, we call them portfolio epics, um, where you have multiple restraints, mo multiple teams or multiple departments who gonna have to work on them in order for us to, um, to accomplish them. So the Epic owner is gonna be responsible for defining the vision, the benefits, the acceptance criteria, um, and to also, um, yeah, make sure that, um, uh, the, the, the progress so that we're progressing on this topic, right? And if there are any challenges or any impediments that the teams cannot solve themselves, then at some point the epic owners would have to support.

And for example, if we include some business owners, uh, we can say that, okay, we can define them as our key stakeholders who are going to basically provide us with business insights, um, for specific projects, products, like we already said. Um, and this is gonna enable us to make better, um, decisions. Then, um, the third part here would be to develop governance policies, right?

So we wanna establish governance policies that guide decision making, resource allocation, and progress mon uh, progress monitoring, um, in order here as well. Once we have those, make them transparent, make sure that everyone is aware, um, what we are tracking, how we're making decisions, and what is important, um, so it's clear and we don't have to discuss it, um, every time from scratch. Step number three would, uh, would be to create the portfolio can system.

I'm pretty sure everyone is aware what a portfolio, uh, what a can system is, right? So at the portfolio level, we would like to have one as well. And why is it important?

We wanna, uh, wanna have visibility and trans, uh, transparency, right? So we wanna see, uh, what is in our pipeline, what are we working on, and is that really the right products, the right initiatives with it? We also want to improve our workflow, right?

Like we already said, like once we have it visualized on our common board, uh, we can identify then the inefficiencies, the bottlenecks in our, um, in our system. And then we would, like, we have to, or we should actually, um, address them in order to, to make it more efficient. And hence prioritization.

So of course, once we visualize everything on the Kanban board, it's becomes easier for us to also prioritize because we see where things are and what we're working on, what is in the pipeline, um, and so forth and so on. And in increase the accountability, um, it should also promote accountability because, uh, now we clearly see who is responsible for certain, uh, certain portfolio epics, but also who is contributing to those. So if there are some issues or if we're not moving forward, we know who we have to speak to, how to do it.

Uh, how to get started with the portfolio, Kanban, well design your Kanban board safe, actually, uh, makes a suggestion. I'm gonna show it on the next slide. And I would recommend just, uh, stick with that because it's quite good.

And you can make your minor adjustments, um, to fit your company's needs. Uh, but actually just, um, just go with the, with the, with a suggested, um, con board from safe. I would say.

Then visualize your initiatives. So whatever you have already, just put it under there. So you make it, um, you make it visible, you make it transparent, set whip limits.

Um, since our portfolio management has also just certain capacity, and we don't wanna overload our system, right? So we should define some realistic, uh, whoop limits, uh, monitor and optimize. Um, and then we wanna see how is the work, um, flowing through our system, right?

And this already said, then we're gonna pretty much, uh, or pretty soon identify our bottlenecks, our inefficiencies, and then we wanna start to address them accordingly. Yeah, continuous improvement, that's exactly what we're gonna do, right? Continuously.

Look what can be done better. What is, uh, what can be done more efficient? Where do we have waste and our system, so to say, and how can we become lean up?

So this is the, the combat board, uh, from safe, uh, that I mentioned. As you see, uh, they define the flow, um, and actually for every stage or for every step, um, they also define what should be happening there. Um, so I would just, um, go, uh, with that and start using that.

And like I said, you can do minor adjustments, you can rename things, you can, um, define things maybe a bit differently, but on all in all, it's actually quite, um, quite a good, uh, common system already. Step number four would be to align on metrics and KPIs. So once we have the, the business objectives, once we have visualized them and we know who's responsible for that, at some point we need to get started.

Uh, in order, uh, we need to get started measuring how successful are we and how is our performance, right? And for that, we need to have some clear metrics and KPIs. So metrics are usually quantifiable measures used to check performance, progress and productivity.

And there are of course a lot of metrics. So choose the ones, uh, who you feel are gonna, yeah, be the most suitable ones for your case. Um, don't overthink it, don't do too much.

Less is definitely more. Um, and you can always, um, adjust them and, um, or include some other metrics at the later stage. So just focus on the few, the most relevant ones.

So KPIs are metrics that are particularly, uh, critical to, um, for achieving key business, um, objectives, right? Um, so here some examples would be customer satisfaction score or value delivered. Um, again, define the ones for your, your business or your, um, company objectives, which would be the most suitable ones.

Um, start with them. And then after some time, if you realize you need to change them, you need to adjust them, uh, feel free to do some. So why do we wanna have metrics and KPIs?

Why are they important? Because we wanna have an objective eval, um, evaluation, right? So we don't wanna make our decisions based on how we feel or based on our gut feeling, but actually we wanna have some data who's gonna support our decisions?

So we wanna make informed decisions, um, and of course, alignment with business goals, making sure that we're focusing on those. How to get started with metrics and KPIs. Um, well first step reference to your organizational objectives that we set in the step, um, uh, the first step, right?

Um, then select the relevant metrics and KPIs that gonna support those and where you think they would be useful to, to measure it. Um, then very important, ensure your data quality. So make sure you collect, um, yeah, good data actually, that you have some, some practices, um, in place.

Um, um, making sure that the data is accurate, consistent, um, and timely. Um, and that you define a standardized data collection processes here as well. It would be very important to inform everyone, which data are you collecting, why you collecting it, and what do you wanna do with that?

Um, so, you know, there are no, I don't know, strange feelings of, of the teams or the people who are involved or where you're collecting the data. Um, set baselines and targets. So it would be very important to define your starting point and understand your starting point and define some real realistic targets for improvements.

So the emphasis here is on realistic. Uh, we don't wanna set any unrealistic targets because then, um, it's not gonna bring you any value. Implement a reporting mechanism.

So basically on a regular basis, of course, um, you wanna, you wanna look at your metrics and KPIs, uh, so there are various tools out there for it, right? Your company uses probably some of them. So make sure you have good dashboards, uh, yeah, reports or, uh, you visualize that.

So it's easy to digest, easy, uh, to see the results to, in order to draw some conclusions from that. And then, like we said, review and adjust some metrics and KPIs and aesthetic. So on a regular basis, check as it's still the relevant metrics, are there maybe some better ones KPIs the same.

And then, uh, improve as you go along. Step number five, uh, would be to establish lean portfolio management events. So here, safe suggests, um, three events where the lean portfolio management should come together, um, in order, yeah, to work on this, on this portfolio, right?

Um, you can define maybe a few more events if you feel like you, you you have to, but this will be the three, uh, to get started. The first one would be the strategic portfolio review. It should take place once a quarter, and basically it should, um, ensure alignment, um, of strategy with, uh, the organizational goals.

So we wanna look at our common boards, uh, and see what is in the pipeline, what is an implementation, what else is going on, and is it still the, the right things that we are, that we're, that we are doing right, or where we are investing our resources. Meeting Number two, or even number two is participatory budgeting. Um, here it's all about budgets, right?

And CSAF suggests to do it twice a year. So already bringing in some more flexibility and, um, agility into it. So going away from this traditional approach where we just do it once a year here, uh, safe suggest to come together twice a year and have a look where we have, where do we have, where did we allocate our budgets, into which projects, which product, uh, products, um, which initiatives, and is it still the right way?

Are was still the right things? Or, or maybe we should do a reallocation into some other initiatives. And the third event, uh, event would be portfolio sync.

Um, so this should ha this should be happening every month, um, or taking place every month. And this is where we wanna look more on the implementation side of our strategic objectives. And we wanna make sure that our age of release strains our teams, um, yeah, can, can actually, uh, develop the things, um, or yeah, and deliver the things basically that will require from them.

Uh, and if they have any challenges or if they have any impediments, this is where we want to address them and see how we're gonna resolve them. Uh, let's have a look. Um, or let's make a comparison be between the strategic portfolio review and the portfolio thing, because sometimes the two get a bit confu.

Uh, yeah, get a bit, um, confused what they're, what they're, what they are there for. Um, so let's just maybe compare. So on the strategic portfolio review, uh, the focus should be on the long-term strategy, epic status, budget alignment, and the strategic vision, right?

And for the portfolio swing, it should, the focus should be more on the day-to-day. Um, um, operational execution, the feature status and the immediate challenges, uh, the participants for the strategic review would be more the portfolio managers, the epic owners, the enterprise architect, um, and maybe you want to take your business owners, uh, with you, uh, for the portfolio saying it would be more the epic owners, the product managers, the business owners, system architect, release, train engineer, maybe product owners. So you get the insights from the team.

So it's like it's more operational already. Um, for the strategic portfolio review, the discussion points should be, uh, portfolio come on board, the budget adjustments, the resource allocation, and for the portfolio sync. Um, the discussion points are epic and feature implementation.

The KPI reviews, the dependency management and the portfolio. Uh, the strategic portfolio review takes place quarterly and the portfolio shrink, um, takes place monthly. So how do you, or how can you measure your maturity?

Uh, basically, um, doesn't matter where you are in your lean portfolio management, um, cycle Safe gives or provides us a guide also to, to have a look, um, and gives us some, some tips on where to focus. Um, so we have for different levels. The first level would be crawl.

So like baby, basically we're crawling at this stage. Uh, we're just at the very beginning, um, to get familiar with Lin Portfolio management, and we don't have much in place. So it, if we're at this level, the focus should be on establishing a foundational lean portfolio management practices, gain the basic understanding of safe, of in portfolio management of safe principles, and just begin by aligning portfolio activities with your business objectives, um, from crawling to walking.

Um, if you are on the, uh, walk level maturity level, then basically, um, it means you have already a basically portfolio management framework in place and you are starting to implement it and you're using it more consistently if you're at this level. So the focus should be on improve portfolio operations, hence alignment and start using metrics and KPIs to measure your success and guide your decision making. The next level would be run.

Um, so if we are, um, at this level, basically we have already, uh, pretty well established in portfolio management practices, we're we are applying them, um, uh, consistently. Um, and if we're here, then the focus should be on even more optimizing the processes, refine your governance, continuously, improve in portfolio management practices to enhance value delivery and business outcomes. And the last step, uh, at this maturity level would be fly.

Um, so if we're here, that would mean that we have already a highly mature, um, um, yeah, we have a highly, uh, mature, uh, lean portfolio management practices in place. Uh, we operate already, uh, with full agility. We're effectively balancing strategy and execution, and we're actually achieving our strategic goals on a consistent basis.

So if you're here, your focus should be to innovate and lead lean portfolio manager practices, push the boundaries of what's possible because we know there, there is always room for improvement. And we actually, we want to sustain the long-term success through continuous innovation and improvement, because of course, we don't want to lose what we already built up, up to this level. So that will be the end.

Uh, that was the short introduction to, uh, lean Portfolio Management with Safe. Um, if you would like, um, we have to have more information or to get in touch, um, you can follow me on LinkedIn, you can have a look at my website. Um, I also have a book on Amazon, um, called Mastering the Art of Lean Portfolio Management with Safe.

And there will be a course coming out, uh, shortly. Thank you for listening and hope to hear you soon.