Lean Portfolio Management Operations: An Agile Approach (2023)

Lean Portfolio Management Operations: An Agile Approach (1)

This blog is part of a series onLean portfolio management for the company. If you have not done so yet, we recommend reading:

  • Part 1: What is lean portfolio management?
  • Part 2: Lean Portfolio Management: Tight Budgets and Investment Financing

If you've read the first two parts of this series, you'll understand that traditional portfolio management approaches may no longer be able to keep up with the fast pace of the global economy or digital disruption. Traditional approaches, which are often longer and more linear, can inhibit the flow of innovation and value in your organization and as such make it difficult to Lean-Agile transformation without transforming your organization's approach to portfolio management. In the first two parts of this series, we talked about the key elements ofLean Portfolio Management(LPM) and how funding practices need to be adapted to better support LPM initiatives. Now let's dive into developing an agile approach to lean portfolio management operations.

Adopting agile portfolio operations practices is an equally important component to the success of your Lean-Agile transformation.

Traditionally, in an effort to maintain alignment and consistency across the portfolio, organizations have dedicated a centralized PMO (Program Management Office) to plan, manage programs, and define solutions. The problem with this structure begins and ends with the way projects are financed, as we learned in ourlast publication. To sum up:

  • Organizing temporary teams around projects (moving people to work) results in inefficient and underperforming workgroups.
  • Project-based financing requires detailed plans based on inaccurate projections, taking time and people away from delivering value
  • Annual planning creates a state of perpetual overwhelm, which lowers productivity, morale, and performance.
  • Progress is measured based on plan completion rather than actual business results or customer satisfaction.

A project-based funding structure creates a slower, more complicated budgeting process that requires estimates, plans, and details long before they are accurate. By the time a plan is approved and the team can get to work, it should probably already be up to date to account for new information and changing requirements. But reporting new information may require additional paperwork, so teams are encouraged toNoincorporate new learnings into the project for fear that doing so may result in time and/or budget changes that push the project(s) further away from the project.

By contrast, the agile approach to lean portfolio management operations fosters a decentralization of program management, shifting the power of planning and execution with agile release trains (ART) and empowered, self-sufficient solution trains.

But how do you maintain alignment with broader organizational goals when ARTs function relatively independently? By centralizing key elements of portfolio operations, leveraging new and different operational roles such as an Agile PMO and Lean-Agile Centers of Excellence (LACE).

Didn't we just say that a centralized PMO hurt LPM? Yes, but an Agile PMO and a Lean-Agile Center of Excellence play a completely different role than a traditional PMO. Rather than "owning" the day-to-day decision-making power around program strategy, funding, and execution, the role of an Agile PMO (APMO) or LACE group is to:

(Video) Lean & Agile Portfolio Management

  • Coordinate value streams
  • Execution of the support program
  • Drive operational excellence (fuente)

Before we delve into each of these responsibilities, let's take a closer look at what a LACE group really is.

Lean-Agile Center of Excellence (LACE)

A Lean-Agile Center of Excellence (LACE in SAFe terms) is another area where APMO involvement can help drive operational excellence. A Lean-Agile Center of Excellence describes a small group of people dedicated to promoting the Lean-Agile way of working. Typically, the presence of a healthy, high-performing LACE is the differentiator between organizations that achieve better business results through Lean-Agile implementations versus those that simply practice Agile in name.

LACE responsibilities typically include everything from communicating the need and urgency of change, facilitating Lean-Agile training, reporting progress on Lean-Agile initiatives, and evaluating progress on each of theFive Lean Company Competencies.

LACE can be part of the Agile PMO or it can exist as a stand-alone unit. In both cases, it can serve as a continuous source of energy to push the company through the necessary changes. Often, as the organization matures in its Lean-Agile development, LACE becomes a long-term center for continuous improvement.

Now let's discuss the responsibilities of an APMO or LACE group, starting with the coordination of value streams.

Coordinate value streams

The true value of offering a portfolio of solutions is the ability to leverage built-in capabilities to respond to the growing patterns and needs of end users. As such, while many value streams can operate independently in your portfolio, it is important to put effort into building cooperation and collaboration between different parts of the business and be able to deliver the benefits and alignment at the portfolio level that help the company to offer better offers. results.

For many organizations, that's the ultimate goal: operating with a kind of Swiss Army knife versatility, with the agility to anticipate and respond to user needs with the right tools for the job. The APMO (and other Lean-Agile leaders/groups within the organization) help coordinate efforts across the entire value stream to manage dependencies and seize opportunities within the portfolio.

An article by Scaled Agile, Inc, creators of the Scaled Agile Framework (SAFe®) explains this responsibility (and opportunity) this way:

“…careful coordination can create a differentiated and unmatched solution offering. To that end, Lean-Agile leaders understand the challenge and the opportunity that their value streams offer. They make them as independent as possible, while interconnecting and coordinating with the larger purpose of the company.” (fuente)

(Video) Lean Portfolio Management in SAFe: Connecting Strategy to Execution

Execution of the Support Program

While it can be tempting to forego the role of a PMO entirely, it's important to understand that the agile approach to lean portfolio management operations includes a type of centralized program management capability. distributedallThe responsibilities of ART and Solution Trains will result in an organization that will inevitably face the same tensions around the allocation of funds and resources as a traditional bureaucracy.

While it requires a drastic culture change within the PMO, many organizations do better by redesigning their traditional PMO to become an agile PMO. Ultimately, the people within your PMO have the skills, knowledge, and relationships with managers, executives, and other key stakeholders that can be extremely helpful in not only managing change, but getting things done. Rejecting them would not only be a monumental waste of resources and time, but would also be very damaging to the culture.

Accepting the PMO as a change agent and encouraging it to adopt Lean-Agile practices (and the role of an APMO) is the most productive and beneficial way to approach this transition.

Typically, as the APMO matures, it can provide additional support for program execution. They can:

  • Sponsor and communicate the vision of change
  • Attend the launch (some members may even provide training)
  • Lead change towards Lean-Agile goals and budget
  • Promote more agile contracts and more efficient alliances with suppliers and customers (fuente)

To maximize the impact and effectiveness of the APMO, many organizations include Release Training Engineers and Solution Training Engineers in their APMO so they can share information on best practices, common program metrics, and standard reports.

Drive operational excellence

APMO plays a leadership role in helping the organization improve operational efficiency (and therefore achieve its business goals). There are two main ways the APMO can drive operational excellence in LPM: by sponsoring communities of practice (CoPs) and a Lean-Agile center of excellence.

Communities of Practice (CoP)

Communities of Practice (CoP) are organized groups of people who typically share a specific common business or technical domain. They meet regularly to share information, improve their skills, and actively work to advance general domain knowledge within the organization.

Lean Portfolio Management Operations: An Agile Approach (3)

An example of a CoP is a group of product managers from across your portfolio who would not normally work together on an ART, but who would benefit from sharing best practices and knowledge. CoPs not only help drive operational excellence, but also provide employees with valuable mentoring and career development opportunities they might not otherwise receive.

An Agile PMO can sponsor and support role-based CoPs for Release Train Engineers and Scrum Masters to provide a forum to share effective practices for executing the Agile program. CoPs can also be theme-based, but this often happens later in LPM maturity.

(Video) Lean Portfolio Management Overview : Traditional Approach To Agile Approach

Lean Portfolio Management Operations: An Agile Approach (4)

learn more

We hope this article has given you a comprehensive view of how business operations need to evolve to meet the needs of your LPM strategy. In the last part of this series, we'll look at Lean governance in LPM and how it influences future spend, forecasts and milestones, and governance of the development effort.

Be sure to download the full whitepaper,Lean Portfolio Management for the Company, for more information and greater detail of the commentedhere.

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Written by Arroyo Appelbaum Product Marketing Director

Brook Appelbaum is the Director of Product Marketing for Planview's Agile and Efficient Delivery Solution. With nearly 20 years of marketing experience, Brook has led many different product and digital marketing teams. However, his favorite leadership role is Product Owner. As part of an agile marketing team within Planview, Brook drives the product marketing campaign and strategy for the agile and efficient delivery solution. And she thinks LeanKit is the best.

(Video) Another Piece of the Puzzle - Lean Portfolio Management in an Agile World - Improving Talks Series


Is Lean portfolio management agile? ›

Lean portfolio management is a process by which strategy is aligned with execution using a lean approach and agile portfolio operations and governance. Lean project management is part of an agile methodology that aims to increase customer value by removing project waste.

What is portfolio management in agile? ›

“Agile portfolio management deals with how an organization identifies, prioritizes, organizes and manages different products. This is done in a streamlined way in order to optimize the development of value in a manner that's sustainable in the long run…

What are the key responsibilities of agile portfolio operations? ›

The responsibilities of Agile Portfolio Operations include: Coordinating value streams by ensuring there is cooperation between solutions. Supporting program execution through key stakeholders adopting a new way of working. Fostering operational excellence by improving practices, efficiency, and results.

What is the difference between lean and agile approach? ›

Differences between agile and lean

Agile is focused on users, managing uncertainty, and delivering working software. Lean is focused on eliminating waste, managing processes, and delivering value. These differences also reveal common misconceptions about the potential negatives of adopting agile or lean methods.

What is the difference between agile and lean management? ›

Lean management introduces team models such as work cells, in which teams work together to complete steps that previously happened separately and were vulnerable to delay. Meanwhile, agile relies on concepts such as cross-functional teams and flow-to-work pools, which follow the same underlying philosophy.

What are the 4 elements of portfolio management? ›

4 Key Elements of Strong Investment Portfolios
  • Effective diversification—beyond asset allocation. Traditional views of diversification tend to focus on asset classes (e.g., equity, fixed income). ...
  • Active management—tactical asset allocation strategy. ...
  • Cost efficiency. ...
  • Tax efficiency.
Jan 5, 2019

What are the 3 key activities of portfolio management? ›

It involves clarifying, prioritizing, and selecting the projects that are best aligned with the overall business objectives of the firm and determining the optimal way to sequence timelines in order to make the most out of the enterprise's project activity.

What is the goal of lean portfolio management? ›

The primary goal of Lean portfolio management (LPM), is to align agile development with business strategy and the primary focus of the company is to deliver value through products and solutions to customers. Incorporating agile and lean portfolio management offer a path to improving business agility.

What are the 5 phases of portfolio management? ›

Processes of Portfolio Management
  • Step 1 – Identification of objectives. ...
  • Step 2 – Estimating the capital market. ...
  • Step 3 – Decisions about asset allocation. ...
  • Step 4 – Formulating suitable portfolio strategies. ...
  • Step 5 – Selecting of profitable investment and securities. ...
  • Step 6 – Implementing portfolio. ...
  • Step 7 – ...
  • Step 8 –

What is the difference between traditional and agile portfolio management? ›

Agile project management emphasizes customer satisfaction and working software. Traditional project management focuses on planning and predictability. Focusing on following a strict plan and meeting project requirements. Permits an interactive and collaborative approach between the development team and the customer.

What is the agile approach to investing? ›

Agile INVEST is an acronym that helps Agile teams assess the quality of a user story. Teams can use INVEST as a guide to creating meaningful user stories — if the story does not meet one or more of the INVEST criteria in Agile, teams may consider rewording or even rewriting it altogether. INVEST stands for: Independent.

How much do agile portfolio managers make? ›

agile portfolio manager $131,900 jobs.

What is a lean-agile mindset? ›

The Lean-Agile Mindset is the combination of beliefs, assumptions, attitudes, and actions of SAFe leaders and practitioners who embrace the concepts of Lean Thinking and the Agile Manifesto. (Courtesy of Womack & Jones from Lean Thinking, and the Agile Manifesto [2,3])

Why lean is better than agile? ›

The difference is that in Lean thinking, teams increase speed by managing flow (usually by limiting work-in-process), whereas in Agile, teams emphasize small batch sizes to deliver quickly (often in sprints).

What is the advantage of lean and agile? ›

The business benefits of Lean-Agile approaches

Increased implementation transparency and visibility. Reduced risk and costs from testing early (and often) Improved ability to address unclear or evolving requirements. Improved collaboration through alignment of management, IT, and vendor teams.

How do you combine lean and Agile? ›

Combine Lean and Agile

When combining lean and agile, we're really combining two key concepts: (1) build the right thing using lean, and (2) build the thing right using agile. But we don't always combine these two methodologies in a healthy way.

Is Lean Six Sigma the same as Agile? ›

Agile methodology focuses on better management of projects. Lean Six Sigma methodology focuses on improving processes. Combining the two may be the key to maximizing process efficiency.

What are the 2 main types of portfolio? ›

There are two main types of portfolio assessments: “instructional” or “working” portfolios, and “showcase” portfolios. Instructional or working portfolios are formative in nature. They allow a student to demonstrate his or her ability to perform a particular skill. Showcase portfolios are summative in nature.

What is portfolio management in simple words? ›

Portfolio management is the selection, prioritisation and control of an organisation's programmes and projects, in line with its strategic objectives and capacity to deliver. The goal is to balance the implementation of change initiatives and the maintenance of business-as-usual, while optimising return on investment.

What are the two main types of portfolio management strategies? ›

Broadly speaking, there are only two types of portfolio management strategies: passive investing and active investing.

What are the four steps in the portfolio management process? ›

It is a three-step process that includes planning, implementation, and feedback, with asset allocation, diversification, rebalancing, and tax reduction being the four most common tactics. The four different styles of investment portfolio management include active, passive, discretionary, and non-discretionary.

What are the three major types of portfolio? ›

4 Common Types of Portfolio
  • Conservative portfolio. This type is also called a defensive portfolio or a capital preservation portfolio. ...
  • Aggressive portfolio. Also known as a capital appreciation portfolio. ...
  • Income portfolio. ...
  • Socially responsible portfolio.
Nov 28, 2022

What are the basic principles of portfolio management? ›

Wise Principles of Portfolio Management
  • Principle #1: Work with a trusted financial advisor. ...
  • Principle #2: Invest according to specific long-term financial goals. ...
  • Principle #3: Balance time and risk appropriately. ...
  • Principle #4: Don't let emotions dictate your investment decisions.
Jun 22, 2020

What are the seven components of a portfolio strategy? ›

The portfolio strategy in practice can be reduced to seven interrelated components: choice, autonomy, talent, varied supports, accountability, funding, and public engagement.

What are the three 3 phases of project portfolio management ppm? ›

The Project Management Institute (PMI) defines three phases to the portfolio lifecycle or process: plan, authorize, and monitor and control.

What are the three 3 primary features of portfolio assessment? ›

Three main factors guide the design and development of a portfolio: 1) purpose, 2) assessment criteria, and 3) evidence (Barton & Collins, 1997).

Is Lean Six Sigma considered agile? ›

Six Sigma offers agile teams the roadmap (DMAIC), approach and techniques, which can help them effectively define and work on the problems and issues affecting their quality and performance.

Is Lean Six Sigma the same as agile? ›

Agile methodology focuses on better management of projects. Lean Six Sigma methodology focuses on improving processes. Combining the two may be the key to maximizing process efficiency.

Is lean development agile? ›

Lean Software Development (LSD) is an agile framework based on optimizing development time and resources, eliminating waste, and ultimately delivering only what the product needs.

Is lean product development agile? ›

Lean product development is different from agile product development because lean focuses on making the most efficient use of resources and processes, while agile focuses on the quickest way to get things done.

Which methodology is considered Agile? ›

Agile methodology is a “step by step” dynamic focused on short-term visibility but never losing the long-term product goal. There are 5 main Agile methodologies: Scrum, Kanban, Extreme Programming (XP), Lean Development e Crystal.

What is lean Agile based on? ›

The Lean-Agile Mindset is the combination of beliefs, assumptions, attitudes, and actions of SAFe leaders and practitioners who embrace the concepts of Lean Thinking and the Agile Manifesto. It's the personal, intellectual, and leadership foundation for adopting and applying SAFe principles and practices.

What is considered Agile? ›

Agile is an approach to project management that centers around incremental and iterative steps to completing projects. The incremental parts of a project are carried out in short-term development cycles.

What is Lean Six Sigma also called as? ›

For developing a new product, service or process, there's a modified version called DFSS (Design for Six Sigma). The process most often used in DFSS is called DMADV (Define—Measure—Analyze—Design—Verify).

What is the main difference between Lean and Six Sigma? ›

The primary difference between Lean and Six Sigma is that Lean is less focused entirely on manufacturing, but often shapes every facet of a business. Lean Six Sigma combines these two approaches, which creates a powerful toolkit for addressing waste reduction.

Which is better Six Sigma or Lean Six Sigma? ›

Six Sigma is a better choice if your organization is looking to reduce variability and risk in a more complex environment. Lean might be the perfect fit for your organization if your organization requires a simple, ongoing methodology to direct innovation and improvement.

Which came first Lean or Agile? ›

Lean Software Development (LSD) was first proposed by Dr. Robert Charette as a way to build change-tolerant organizations that were becoming increasingly dependent on software. Next came “The Agile Manifesto” which enshrined the 12 principles of Agile Software Development.

Why is Lean better than Agile? ›

The difference is that in Lean thinking, teams increase speed by managing flow (usually by limiting work-in-process), whereas in Agile, teams emphasize small batch sizes to deliver quickly (often in sprints).

Is Scrum Lean or Agile? ›

Scrum is an Agile framework mostly used for new product development and breaks down each project into 1–4 week sprints. The average Scrum project length is 11.6 weeks.

Is Lean an example of Agile? ›

Lean agile is an agile methodology that, in basic terms, is quite simple: improve efficiency by eliminating waste. Unlike traditional, waterfall project management, which dictates a set plan laid out by a project manager, lean agile strives to reduce all tasks and activities that don't provide real value.

How do you combine Lean and agile? ›

Combine Lean and Agile

When combining lean and agile, we're really combining two key concepts: (1) build the right thing using lean, and (2) build the thing right using agile. But we don't always combine these two methodologies in a healthy way.

Why is Lean used in Agile? ›

Lean Connection: Deliver Fast and Defer Commitment

Lean encourages teams to deliver fast by managing flow, limiting the amount of WIP (work-in-process) to reduce context switching and improve focus. Agile teams manage flow by working in cross-functional teams on delivering one iteration at a time.


1. Lean Portfolio Management - Aligning Strategy with Execution (Live Recording)
(Agile Agilist)
2. Fundamentals of Agile Portfolio Management
(Bython Media)
3. Agile Portfolio Management
4. Implementing SAFe® Lean Portfolio Management for Executives
5. Why Lean Portfolio Management?- from The Scaled Agile Framework Lean Portfolio Management Webinar
(Expert Agile Club)
6. The Transformation to Lean Portfolio Management
(Project Online)


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