Set up your portfolio management organization
What roles and activities will there be in your organization for portfolio decision-making? First, there is a strategic level, which is responsible for major decisions surrounding new initiatives. We will call this here the portfolio management team (PMT). It varies per organization who participates in the PMT. Find the people who represent the entire portfolio of business and IT, with a mandate for selection, prioritization, financing, coordination and results measurement of new initiatives. The PMT is facilitated by a portfolio manager or agile coach and new initiatives are presented by the initiators, supported by experts if desired. Secondly, there is the tactical level, which is responsible for the prioritization of underlying sub-products (or in agile terms: features). In an organization with agile and traditional working methods, these are (chief) product owners, project managers and their stakeholders from the business per domain.
Set up a portfolio cycle
Establish a regular cycle for the selection, prioritization and planning of new initiatives. Ensure that the strategic and tactical activities follow a common rhythm, so that ‘flow’ is created: smooth continuity in which everyone takes on the role that suits him/her, without unnecessary pressure due to, for example, too much scheduled work. Strategic activities: To select initiatives, contributors explain their idea with a lightweight business case, which contains just enough information to lead to discussion, further elaboration and a go/no go decision about the idea. The business case describes the purpose, value, scope, risks, measurable success criteria and features, with a rough estimate of the effort. The more business cases align with the strategic themes and the smaller the effort, the sooner they are selected and the higher they are prioritized. Tactical activities: For agile teams, product owners then determine the prioritization of their feature backlog, after which the upcoming iterations are planned. The output of this is fed back to the strategic level. If initiatives are realized in both agile and waterfall, it is important to synchronize both conceptual frameworks, for example features with work packages and sprints with project phases. This way you maintain one overview of initiatives for prioritizing and planning. Provide knowledge of the agile and waterfall working method to be able to switch between them properly.
*Are you wondering which approach best suits which change? VKA has developed a poster that we can use to discuss this question with each other.
Implement benefit tracking
In portfolio management, we also want to quickly gain insight into which changes work and which do not. So that we can, where necessary, base the vision and prioritization on this more clearly. Therefore, set up benefit tracking: measuring and sharing results as defined in the business case of initiatives and underlying features. We also want to measure the success of portfolio management itself, based on the previously recommended measurable results of portfolio management. Examples of this are the average lead time or the total change costs. Various results are becoming more measurable now that organizations are investing more in data & analytics.
Continuously improve the portfolio process
Once the organizational structure and the cyclical process of portfolio management are in place, ensure that everyone involved masters it through training, communication and, above all, by doing it. Make evaluation of the (design) choices made part of this cyclical process. Everyone learn what works and what can be improved. Get feedback about it and adjust the working method. And continue to communicate well about progress and working methods. As a PMT you will learn how to assess a business case, what decisions and advice you give to initiators, and what the interaction is between strategy and tactical/operational level. As a team you become attuned to each other and arrive at well-founded decisions more quickly. At the tactical level you will play your role as a connector of strategic and operational learning; how do you process strategic decisions and advice, how do you feed back output from the operation? While at the beginning of a portfolio management implementation the focus will be on gaining insight into initiatives, you will then build a more structured and smoother portfolio process for selection, prioritization and planning of initiatives. You will also gradually focus more on benefit tracking; Are the intended benefits actually achieved and what does this mean for (adjusting) initiatives? This completes the circle of portfolio management.
In conclusion
In this blog I have provided second tools with which an organization with different development forms can continuously strive for the highest value in a coherent manner:
- Set up a portfolio organization, with connections at strategic and tactical levels
- Set up a regular portfolio cycle for the selection, prioritization and planning of new initiatives and synchronize agile and waterfall conceptual frameworks
- Measure results and reprioritize initiatives accordingly
- Learn and gradually improve the various aspects of portfolio management, from assessing a business case and structured planning of initiatives to consistently measuring results
Portfolio management is a beautiful, facilitating process that connects ownership from strategic to operational level in joint strategic priorities and ensures a smooth flow in their realization. In this way we build synergy between initiatives and reach decision-making and realization faster.
