Businesses often see portfolio management offices (PfMOs) as administration functions, turning the handle on reporting while adding little value. But they can add enormous value by guaranteeing a return on the investment organisations make in delivering change by ensuring the right projects, aligned to the strategic goals, start and assuring their delivery. To do this effectively in the world of agile project delivery, the PfMO needs to adopt agile practices.
Our experience shows that taking an agile approach improves operational effectiveness by focusing the PfMO on time to value and outcomes, rather than processes. It also creates a more action-oriented culture, boosting motivation and adding a sense of urgency to the team’s work. In a world where the COVID-19 pandemic is transforming ways of working, these techniques can improve remote working by focusing on regular and tangible outcomes.
Simple steps, such as organising work into two-week sprints, are effective and make it possible to manage work via a Kanban board with daily stand-ups. This gives clarity on who’s responsible for what and a genuine spirit of co-operation, with a focus on assisting colleagues and unblocking problems.
Timeboxing the work into sprints also helps manage the demands of BAU activity verses portfolio development. All activities are called out at the start of the sprint and prioritised with the product owner. This ensures regular agreement on prioritisation, which can vary between sprints. For example, in one sprint the priority could be to prepare for a portfolio board, then in the next sprint the focus shifts to portfolio capability development.
The much-used cliché of ‘focus on the customer’ is also vital. Product owners from business teams that are close to end customers can hold the portfolio team to account daily, ensuring they focus on delivering value and solving problems, rather than discussing PfMO reporting schedules.
Running a demo at the end of every sprint provides the opportunity to showcase work. Individuals are encouraged to step out of the shadows and demo tangible, valuable outputs directly to the business team that will ultimately benefit. There’s no place to hide as the focus is on specific work that’s on display to the entire team.
Traditional portfolio management (when done well) has always put strategic outcomes and benefits at the heart of its vision. But this purpose often becomes lost in the detail of reporting, stage gates and tracking of costs. Portfolio office teams can recapture it by actively taking control of strategic alignment, including co-ordinating across the business to build an alignment process if it doesn’t already exist.
Another concept of lean portfolio management is an ‘appropriate’ level of governance. A good PfMO team will ensure appropriate governance, noting that one size doesn’t fit all. A recent example of this was when a government client built a portfolio function with visibility and light-touch governance over all change within the organisation, and with direct control and greater governance over a smaller set of projects. This approach has proven invaluable during the COVID-19 crisis, where this single view enabled a rapid prioritisation analysis, which was presented to the portfolio board within a single sprint.
A great example of using agile tools to encourage a team to think differently is by creating a Portfolio Vision and Portfolio Canvas. These articulate the goals of the portfolio, break down work into value streams and define what the portfolio is aiming to achieve. Creating these simple one-pagers should be a team exercise to ensure everyone contributes, understands the portfolio goals and knows the important part they play in delivering them.
Use of electronic Kanban tools such as MS Teams or Trello free up time needed for reporting, capturing progress in real time. And holding a demo at the end of each sprint showcases the outcomes delivered.
Once the routine of stand-ups and use of the PfMO Kanban board is established, teams can start using other agile tools to manage the portfolio. Capturing all the major pipeline and in-flight initiatives within a portfolio-wide Kanban helps bring portfolio planning to life on a single page, from which the team can review dependencies and analyse risks.
It’s important for a PfMO to define and track KPIs for measures that are of direct benefit to end customers. Rather than solely focusing on milestones, the PfMO should help programmes engage with their customers and jointly build KPIs linked to the customers’ requirements.
Agile techniques aren’t just for agile projects. The concepts can be applied to portfolio management as a means of introducing more effective ways of working. This approach is especially powerful in the remote working environment imposed by COVID-19.
These simple, agile practices will lead to a more empowered and engaged PfMO team who still apply the necessary checks and balances while focusing more on delivering business outcomes and value.