Scaling and Lean Portfolio Management

The term scaling, as used in the Agile industry, can cause confusion as it can mean two things: (1) getting more and more people to adopt a new practice or paradigm in an organization, and (2) more people working on larger and larger initiatives. There are numerous frameworks like Large-Scale Scrum (LeSS), DAD, SAFe, etc. that can help address the first sense.

The second sense of “scaling” implies bigger projects with more and more resources, time, effort, and people. Larger initiatives lead to batching of requirements that creates a situation where you may have to delay the release of the most important request in the batch until the least important one is ready. Additionally, the time from idea to delivery keeps getting longer and longer. The drivers of this view of scaling often are minimizing cost and maximizing staff utilization.

The justification, I often hear, is along two lines:
1. Large organizations have far more people (100s and even 1000s); therefore, the development approach has to be able to work with this larger crowd.
2. We have to do all these things together because our clients are asking for all of this and we can’t deliver in a series of smaller releases.

Lean Portfolio management on the other hand calls for smaller batches in order to deliver business value faster (shorter lead times). This calls for smaller projects, an emphasis on MMFs and projects (or opportunities) that provide the most value, limited work-in-process, and a balance between demand and the capacity of the delivery organization. The focus here is on speed of delivering value to customers, obtaining feedback frequently, and on realizing ROI quickly.

Lean Portfolio management thinking is along the lines that identifying and prioritizing opportunities based on business value, developing the next most important feature, minimizing wastes and delays, ensuring flow, and delivering chunks of value sooner is paramount; this does not need larger and larger teams and scaling may be unnecessary.

However, introducing lean portfolio management concepts isn’t always easy. Sometimes there is a lack of appetite to make meaningful change (e.g., to restructure teams and move away from existing silos), to accurately define value for requested functionality, to focus on end-to-end value streams, or to question existing beliefs and assumptions (e.g., work cannot be split into smaller opportunities and simplified or that smaller releases won’t be acceptable to clients). This is frequently exacerbated by a lack of understanding of the true goal — is it minimizing unit cost and maximizing resource utilization or is it delivering business value faster — and by an inability (or lack of desire) to recognize and remove delays that impede product development.

Companies can benefit by having an experienced coach guide the transition to a lean way of portfolio management. The coach can provide training and advice and also prevent serious mistakes in implementation.

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