Agile Portfolio Management

Agile Portfolio ManagementWhen I first heard about the Agile Business Consortium working on a new pocketbook about Agile Portfolio Management early in 2017 I was intrigued. Is there a place for Agile at portfolio level? Is this just another level within a project organisation to get the Agile ‘treatment’ or is there some new insights that could make a real difference – after all – portfolio management in organisations hasn’t exactly been an overwhelming success, nor has it been an easy road to travel.

I had a read of the new pocketbook (launched in early December in both the UK and Australia) to see what their take was and there are a few bits that stood out to me that I particularly liked.

Kicking off its good to have a reminder about what organisations are struggling with when it comes to portfolio management, the pocketbook pulls these out:

  • Difficulty incorporating change and ensuring the right things are done at the right time due to fixed long-term plans and budgets
  • Limited organisational effectiveness caused by over-detailed early-stage planning, and lack of day-to-day testing of the strategy
  • Failure to consider stakeholders, especially those closest to changes, in strategy and portfolio decisions
  • Insufficient challenging or validating of business cases
  • Appetite for change which exceeds the capacity to deliver it
  • Poor decision-making due to poor Management Information

Quite a few of these challenges were highlighted in the PMO Flashmob report on Portfolio Management back in 2015 so they’re all pretty well-known and experienced by those working in the portfolio management field.

Value

The Agile Portfolio Management approach focuses heavily on a value-focused portfolio – “focus on the creation of value” is the number one principle and ensures that we are choosing the right programmes and projects to deliver based on the organisational strategy AND those that deliver the most value for stakeholders and customers.

The difference from traditional portfolio management is perhaps the focus on keeping this value relevant as things change pretty quickly these days – and we’re reminded that we’re in VUCA times with regards change in organisations.

Review

In fact the second principle is about reviewing the portfolio continuously – to make sure it is constantly aligned to strategy which sounds labour intensive especially when you consider that most portfolios today which are heavily aligned to the organisational annual budget planning process. Elements of Agile we’re already familiar with in projects starts to feature including “plan for value to be delivered incrementally” and “ensure the content and prioritisation of the portfolio is iterative and frequent”. There’s also advice around ensuring transparency and feedback.

People

Another principle – “involving the right people to shape and manage the portfolio”, introduces some roles (without job titles) which work within the Innovation Hub* of portfolio management which include “influencers, stakeholders, beneficiaries and the core change participants” which include the roles of Project Manager and the PMO.

*Innovation Hub is a term from the Framework for Business Agility – you can take a look at the whitepaper about that.

Demonstrate Value

In the principle “clearly and continuously demonstrate that the portfolio is delivering optimum value” further Agile philosophies are introduced. Empowerment, Transparency and Openness are used to make sure the status of items in the portfolio are clear and visible to all. The emphasis here is about “delivering the right value at the right time”

Creativity

Not normally a word associated with portfolio management – the Agile Portfolio Management guide advocates “welcome new ideas from anywhere at any time”. How this is instigated, managed and used is largely dependent on the organisational culture – could you imagine your organisation doing this well? Another cultural related change may also be required when it comes to another principle “encourage collaboration and empowerment” where self-motivated, cross-functional teams are empowered to deliver change.

What Stood Out

  1.  I liked the maturity of initiatives in the portfolio – essentially there are nebulous ideas (great word in project land I think!) and those that may occur in the future which are this stage are recognised to be immature (both in terms of the business case and in planning) and things that may be ready but they’ve not been kicked off yet.
  2. I also liked the horizons definitions – longer-term; near-term and today. Simple words, simple definitions.
  3. I liked the approach to budgeting in an Agile portfolio – timeboxing (fixed budget and time but flex around the initiatives in the portfolio) plus incremental realising of benefits (we’re going to HAVE to get better at this!)
  4. When you’re developing the next increment within an initiative (project) it’s not 100% guaranteed to happen because the business case for the next increment will have to stack up against other initiatives waiting to start (it’s all about whether it’s still offering value)
  5. Which in turn means being able to scrap initiatives when there is no longer no or limited value – overcoming sunk cost bias.
  6. Events driving reassessment of strategies and alignment – internal changes AND external changes (such as competitor activity) and the use of retrospectives to help drive changes to the portfolio.
  7. Portfolio stand-ups – takes 30 minutes, once a week? I’m sure that will solicit some debate in the portfolio management community.
  8. Agile governance – “to Enable rather than Impede”, a shout out to PMOs here about how ‘command and control’ is not going to work and some insights into how AgilePfM can resolve some of the challenges resulting from that type of PMO.
  9. And sometimes it’s just good old plain conversation that should happen when MI reporting doesn’t hit the mark and decision-making is ineffective. There’s an interesting comment about Agile “enables information to be “pulled” by decision-makers rather than having to rely on information being “pushed to them. ” and “Lean MI encourages conversation and communication where more detailed information is required”.

All in all, Agile Portfolio Management has some useful insights and ideas on how to make portfolio management more effective in an organisation – giving insights on where agility and flexibility in the approach can happen. I’m looking forward to hearing about case studies where organisations have used some of these approaches and applied the principles.

There’s a webinar coming up about Agile Portfolio Management which you might want to register for if you’re interested in the subject.

Agile Business Consortium

Agile Business Consortium (ABC) are sponsoring this year’s Project Management Census and the Project Management Benchmark Report.

You can take part in the Census right now and be in with a chance of winning a ticket to this year’s Agile Business Conference which takes place in London and is run by ABC.

>> The PM Census

Share: Linkedin Logo Facebook Logo Twitter Logo

Leave your thoughts

Take Part Today

PM CEnsus