What are the prime principles of lean portfolio management?

 

The challenge in connecting an agile team to an agile company is that there is a gap between the team that does the work and the team that allocates the funds.


When companies seek and maintain adjustments, they often find that traditional methods of portfolio management are ineffective. Instead, many companies are adopting lean portfolio management techniques to drive organizational collaboration.


What is Lean Portfolio Management?

Lean Portfolio Management (LPM) describes how senior management applies lean principles to link their strategies to execution. The portfolio management team learns about a company’s strategy and allocates a budget to implement it.


Lean Portfolio Management Principles


1 Transition to customer centricity in a larger context

The underlying impetus for adaptive work is the fundamental change that organizations need to make towards customer centricity. To empathize with and serve our customers in a larger social and environmental context, everyone in the organization needs a clear view of the customer, the organization’s vision, and this larger context.


2 Communicate a transparent adaptation strategy

Today’s enterprises need a vision or strategy to support “true north” in order to effectively respond to the changing environment. They must recognize that the path forward is fundamentally unpredictable. 


Feedback, learning and adaptation are becoming core competencies for success in the 21st century.


3 Adjust yourself for common goals and how they change

“True north” that guides corporate strategy is conveyed as a series of business results over various periods. These goals are expressed and communicated in clear and measurable terminology to make the strategy feasible.


4 Frequently define, prioritize, and provide business value

Business value is expressed in plain language using agreed indicators, making it clear and easy to prioritize work at all levels. Depending on the level of control, work is provided in the smallest possible increments, allowing for rapid feedback, learning, and adaptation.


5 Value stream structure

Traditional silo-based organizational structures impede the flow of value through inheritance and dependencies. LPM is only really effective if the person responsible for value creation has complete control over every step in the value chain.


Source: What are the prime principles of lean portfolio management?

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