Table of Contents

What is SAFe Lean Portfolio Management?

SAFe Lean Portfolio Management (LPM) is a strategy execution framework for aligning strategy and execution in organizations.

In the context of SAFe, LPM becomes a critical instrument that helps businesses connect strategy with execution, ensuring the work performed aligns with the organizational objectives. It facilitates the optimal investment of resources to maximize business value. LPM comprises three primary activities:

  1. Strategy & Investment Funding aligns and funds the entire portfolio to create and maintain solutions to meet business goals.
  2. Agile Portfolio Operations coordinates and supports decentralized Agile Release Train (ART) execution and fosters operational excellence.
  3. Lean Governance oversees spending, audit, compliance, expenditure, measurement, and reporting.

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These components cooperate, providing a balanced method to fund initiatives, monitor progress, and establish governance conducive to agility. Organizations can construct an effective, efficient, and agile portfolio by employing this structure.

What is the purpose of SAFe Lean Portfolio Management?

SAFe Lean Portfolio Management aligns strategy with execution, optimizes resources, and maximizes business value.

LPM is a strategic tool within the SAFe framework to connect high-level strategic goals with operational work. It focuses on efficient resource allocation to initiatives that offer the most business value, ensuring the organization’s efforts are value-driven and aligned with its strategic intent. LPM guides an enterprise toward achieving its strategic vision effectively and efficiently by maintaining an optimal balance between strategy and execution.

What are the objectives of SAFe LPM?

The objectives of LPM include strategic alignment, resource optimization, and business value maximization.

LPM synchronizes strategic goals with operational execution, ensuring every effort and investment is directionally correct. LPM also targets the best use of available resources, focusing on initiatives that promise the greatest return. Lastly, it strives to maximize business value delivery, ensuring the organization’s activities are value-centric and result-oriented.

What are the key benefits of implementing LPM?

Key benefits of implementing LPM include strategic alignment, resource optimization, agility, and maximized value delivery.

LPM offers organizations several advantages over traditional portfolio management methods and other less comprehensive frameworks. These benefits include increased responsiveness to market changes, improved decision-making, faster delivery of value, enhanced alignment of strategy and execution, and a focus on outcomes over outputs. LPM is considered a core competency essential to achieving business agility and can be assessed and improved upon to ensure continued growth and success. By embracing LPM, organizations can become more agile and customer-centric, positioning themselves for long-term success.

LPM offers 13 benefits for organizations, as follows:

  1. The LPM component of SAFe ensures that all efforts align with the organization’s strategic vision.
  2. SAFe’s approach to Portfolio Management creates a streamlined path from strategy to execution.
  3. Portfolio Management in SAFe enables the optimal allocation of resources.
  4. The LPM framework within the SAFe context ensures that every investment contributes to value creation.
  5. SAFe’s LPM model instills agility, enabling organizations to respond to market or strategic direction changes swiftly.
  6. LPM, as per SAFe guidelines, maintains a focus on value delivery.
  7. The SAFe interpretation of LPM helps organizations maximize their return on investments.
  8. The SAFe LPM methodology significantly boosts efficiency by streamlining operations and optimizing resource allocation.
  9. Lean Portfolio Management in SAFe effectively enhances decision-making by providing valuable insights to guide strategic choices.
  10. The LPM component of SAFe successfully accelerates delivery, promoting faster turnaround of projects and initiatives.
  11. SAFe’s approach to Portfolio Management strengthens alignment, ensuring all efforts tie back to strategic goals.
  12. Portfolio Management in SAFe proficiently amplifies transparency, fostering clear visibility into portfolio status and progress.
  13. The LPM framework within the SAFe context advances risk management by enabling proactive identification and mitigation of potential risks.

Strategy and Investment Funding

Lean Portfolio Management Strategy and Investment Funding Collaboration jpg

What are investment themes in SAFe LPM?

Investment themes in SAFe LPM are strategic initiatives guiding an enterprise’s investment toward distinct value propositions.

Investment themes (or product themes) embody the initiatives that guide an enterprise’s investment in systems, products, applications, and services. They represent crucial product or service value propositions that offer market differentiation and competitive advantage. Collecting strategic investment themes for an enterprise or a business unit within an enterprise establishes the relative investment objectives for that entity.

The Portfolio strategy plays a crucial role in supporting an organization’s broader objectives, making it vital to establish a strong connection between the portfolio and the enterprise strategy. This connection is facilitated through strategic themes and the portfolio budget and is further reinforced by providing feedback via the portfolio context.

It is necessary to go beyond mere prioritization and investment selection to ensure the entire portfolio is aligned and funded to achieve business objectives. In collaboration with stakeholders, Lean Portfolio Management must develop business and enabler Epics that feed the Portfolio Backlog, promoting continuous alignment of initiatives with the overarching strategy. This approach ensures that resources are allocated effectively and that the portfolio remains focused on delivering maximum value per the organization’s strategic goals.

Lean Portfolio Investment Horizons

How does LPM connect the Portfolio to the Enterprise Strategy?

A bi-directional connection characterizes the relationship between the portfolio and the organization’s strategy. This dynamic interaction entails the portfolio receiving guidance from the enterprise strategy while providing valuable feedback to the enterprise through the portfolio context. This continuous exchange of information fosters better alignment, adaptability, and overall success.

  1. Receiving Direction: The enterprise strategy sets the strategic themes, goals, and priorities that inform the portfolio’s initiatives. By providing clear guidance on the organization’s objectives and desired outcomes, the enterprise strategy ensures that the portfolio is focused on initiatives that deliver the most significant value and impact.
  2. Providing Feedback: In return, the portfolio offers essential feedback to the enterprise through the portfolio context. This feedback can include insights on the progress of initiatives, resource allocation, and potential risks or opportunities. By sharing this information, the portfolio helps the organization make informed decisions, adjust its strategy as needed, and respond to changing market conditions.
  3. Continuous Adaptation: The bi-directional connection between the portfolio and the enterprise strategy enables continuous adaptation. As the organization’s strategic goals evolve or market conditions change, the portfolio can adjust its initiatives and priorities accordingly. This agility allows the organization to stay ahead of the competition and continuously improve its performance.
  4. Collaborative Decision-Making: The bi-directional connection promotes collaborative decision-making between Lean Portfolio Management and stakeholders. By working together to align initiatives with the enterprise strategy, the organization can make more informed choices about investments and resource allocation, leading to better overall outcomes.

The bi-directional connection between the portfolio and the organization’s strategy is essential for maintaining alignment and fostering adaptability. By continuously exchanging information and collaborating on decision-making, organizations can ensure that their portfolios are always focused on delivering maximum value in line with their strategic goals.

What is the LPM Portfolio Canvas?

The LPM Portfolio Canvas is a tool for mapping strategic objectives to portfolio elements in SAFe.

The Portfolio Canvas is a strategic instrument within SAFe LPM that links organizational objectives with portfolio constituents. It aids in articulating the vision, mapping it to themes, and identifying key metrics. This tool promotes clarity in strategic direction, aids in decision-making, and helps ensure that every initiative within the portfolio aligns with and contributes to the broader organizational goals. It’s a visual and interactive mechanism that enhances transparency and facilitates a clear understanding of the organization’s strategic trajectory among all stakeholders.

How does LPM Maintain the Portfolio Vision?

What is the LPM Portfolio Vision?

The Lean Portfolio Vision delineates the future state of value streams and solutions, pinpointing the gap that LPM aims to bridge.

Describing the future state of development value streams and solutions, the Lean Portfolio Vision highlights the gap that LPM must address. To ensure effective collaboration across the portfolio, the vision, goals, ideas, and expectations must be communicated continuously and transparently. This clear and consistent communication promotes a shared understanding and alignment across the organization, helping to direct resources and efforts toward achieving long-term goals.

What is the role of communication and collaboration in realizing the portfolio vision?

Effective realization of the portfolio vision hinges on frequent communication and collaboration among business owners.

Clear communication and collaboration are vital to realizing the portfolio vision effectively. Business owners should frequently communicate the vision and strategic themes during various events, such as PI planning and all-hands company meetings. A shared understanding of the vision promotes a ‘one portfolio’ mindset, enabling agility, alignment, and the ability to make mid-course corrections.

How do you create and manage the portfolio backlog?

What is the Lean Portfolio Kanban?

The Lean Portfolio Kanban is a visual system for managing the flow of epic-level work in SAFe.

The Lean Portfolio Kanban is a tool in the SAFe framework that enables the visualization and management of epic-level work items. It provides an overview of the progress of epics from the idea stage to implementation, giving transparency into the status of key initiatives. It aids Lean Portfolio Management by facilitating decision-making and providing a means to manage capacity, predictability, and the flow of value delivery. It consists of various states like funnel, reviewing, analyzing, portfolio backlog, and implementing, each representing a different phase in the lifecycle of an epic.

How do you use Lean Portfolio Kanban to manage the portfolio backlog?

The Portfolio Kanban creates a visual workflow for Business Epics and Enablers. It enables tracking Epic’s progress and identifying process bottlenecks or areas for enhancement.

The six key elements of managing the Portfolio Backlog with Lean Portfolio Kanban are listed below:

  1. The Portfolio Kanban system provides a visual representation of the progress of Business Epics and Enablers, making it easy to track their status and identify bottlenecks or opportunities for improvement.
  2. Epic Owners are responsible for the essential collaborations to manage Epics within the Portfolio Kanban system. They ensure that Epics are effectively developed, prioritized, and moved through the process.
  3. Enterprise Architects guide Enabler Epics, which supports the technical considerations for Business Epics. Their expertise ensures that the organization’s technical infrastructure aligns with its strategic goals.
  4. The Portfolio Kanban system helps to align strategy and execution by identifying, communicating, and governing the selection of the largest and most strategic initiatives (Epics) for a Lean Portfolio.
  5. Lean Portfolio Management (LPM) oversees the Portfolio Kanban, ensuring that it is effectively used to manage and monitor the flow of Epics within the organization.
  6. Strategic Portfolio Review and Portfolio Sync Events: The Portfolio Kanban system is often used during these events to facilitate discussions around Epics’ prioritization, selection, and progress. This helps to maintain alignment between the organization’s strategy and the initiatives in the portfolio.

What are the SAFe LPM Kanban Workflow states?

The workflow states describe an Epic’s stages, from initial ideation to completion. These states ensure that Epics are systematically analyzed, prioritized, and implemented based on their alignment with strategic themes and potential value.

Portfolio Kanban - Portfolio Kanban StatesThe following are the workflow states in a Scaled Agile Portfolio Kanban:

  1. Funnel: The Funnel is where all significant business and technology ideas are initially collected. Epics are described in the Epic Hypothesis Statement and are not WIP-limited. If an idea doesn’t exceed the Epic threshold, it moves to the ART or Solution Train Kanban.
  2. Reviewing: In this state, an Epic Owner refines and elaborates the Epic Hypothesis Statement with stakeholders. A WIP limit is typically specified. If an Epic isn’t viable or aligned with the portfolio’s strategic themes, it moves to the Done state.
  3. Analyzing: Epics with high potential are further analyzed in this state. This involves collaboration among various roles, including Business Owners, Enterprise Architects, and Product Management. Activities include identifying solution alternatives, defining the MVP, establishing cost estimates, and creating the Lean Business Case.
  4. Ready: Epics with the highest WSJF are pulled into the Ready state, periodically reviewed, and prioritized.
  5. Implementing: Epics are implemented based on Participatory Budgeting or a similar process. The implementation step has two sub-states, MVP and Persevere.
  6. MVP: Epics with the highest WSJF advance to the MVP state. Work on the MVP continues until the money allocated for the MVP has been spent or the hypothesis can be evaluated.
  7. Persevere: If the hypothesis is proven true, an Epic advances to the Persevere state, and teams will continue implementing additional features and capabilities.
  8. Done: An Epic is considered Done when sufficient knowledge or value is achieved or it is no longer a portfolio concern.

Achieving a better future state requires the Development Value Streams to adopt a ‘one-portfolio’ mindset, where they cooperate to achieve the portfolio’s higher-level objectives and the broader aim of the enterprise. The Portfolio Kanban’s design should evolve to match the needs of a specific portfolio and reflect continuous improvements to the process. These improvements may include adjusting WIP limits, splitting or combining Kanban states, or adding service classes to optimize Epics’ flow and priority.”

What is Enterprise Architecture, and how does it relate to LPM?

Enterprise Architecture (EA) is a strategic planning process in SAFe that aligns business objectives with IT strategy, processes, and infrastructure.

In SAFe, Enterprise Architecture involves a holistic view of an organization’s key business processes and IT infrastructure. It’s a strategy that ensures IT and business alignment by providing a blueprint of the system’s architecture, which aids decision-making. Enterprise Architecture plays a critical role in Lean Portfolio Management (LPM). It aids in understanding the current state of the organization’s technology and guides the technological evolution of the organization in sync with business goals. This alignment fosters the development and implementation of strategic themes and the portfolio vision, which are integral to LPM in SAFe.

What are the principles of Agile Architecture?

Agile Architecture in SAFe follows principles that foster adaptability, scalability, and emergent design, facilitating the development of systems that can evolve with changing requirements.

Agile Architecture in SAFe embraces a set of guiding rules that promote adaptability and scalability alongside emergent design. These principles aim to facilitate the creation of systems capable of evolving in response to shifting requirements. By adhering to these rules, teams in SAFe can design robust and resilient systems, adapt to changing circumstances, and develop to meet new business needs. This approach encourages a forward-thinking mindset, enabling teams to anticipate changes and design systems that can accommodate these shifts efficiently.

There are three specific principles in Agile Architecture:

  1. Fast Learning Cycles: Agile Architects should leverage rapid learning cycles to explore various design alternatives and approaches. This iterative process helps identify the best solutions quickly and minimizes the risk of investing in suboptimal architectures.
  2. Decentralized Decision-Making: Agile Architecture fosters an environment that encourages decentralized decision-making, empowering teams to make informed choices and respond to changes effectively. This approach enhances collaboration and ensures that the architecture is adaptable to evolving business needs.
  3. Collaboration and Coaching: Agile Architects are crucial in defining and communicating the architectural vision and strategy. They collaborate with development teams, providing guidance and coaching to ensure that the architecture is effectively implemented and aligns with the organization’s objectives.

Agile Architecture enables organizations to develop flexible and scalable solutions. While SAFe informs some of its principles, Agile Architecture’s application extends beyond just SAFe-implementing organizations. The real worth of Agile Architecture is embodied in its principles and roles that it introduces into an organization’s development practices. These principles and roles act as a blueprint, guiding the development of flexible solutions to accommodate changes and scalable to handle growth.

What are the SAFe Architecture Roles?

In SAFe, there are three architectural roles: System Architect/Engineer, Solution Architect/Engineer, and Enterprise Architect.

  1. Enterprise Architects focus on the strategic, organization-wide perspective, ensuring that the architecture aligns with the overall business objectives and vision.
  2. Solution Architects work at the project or program level, addressing large-scale solutions’ design and implementation concerns.
  3. System Architects operate at the team level, ensuring that individual systems and components are designed and built according to the architectural vision.

Architects collaborate across different levels to ensure alignment and address issues as they arise. System Architects, for instance, communicate the technical path through the architectural runway, non-functional requirements, and the design and support of the Continuous Delivery Pipeline (CDP). They also coordinate with Enterprise and Solution Architects to ensure their solutions align with the larger vision.

Finally, architects in any role serve as Agile leaders, mentoring teams and enhancing the overall capabilities of development teams. Organizations can create scalable solutions that meet their ever-evolving business needs by embracing Agile Architecture principles and roles.

What are the enterprise architects’ roles in LPM strategy and investment funding?

Enterprise Architects in LPM transform business vision into actionable technology plans and drive the portfolio’s architectural initiatives.

Enterprise Architects in LPM are responsible for transforming business vision and strategy into actionable technology plans. They advocate for adaptive design, sound engineering practices, and architectural governance, thereby steering the architectural initiatives of the portfolio. Their role in supporting business alignment becomes evident as they optimize the architecture to support the end-to-end value stream. This optimization is pivotal in enabling the organization to realize its objective of consistently delivering value in the shortest sustainable lead time. In essence, they act as key contributors to the strategic direction of the portfolio, shaping and guiding its investment funding decisions.

How do you balance intentional and emergent design in Agile architecture?

Striking the right balance between intentional and emergent design in Agile architecture involves maintaining a healthy Architectural Runway and staying adaptable to change.

In addition to balancing intentional and emergent design, architects and teams should prioritize understanding system goals and requirements, identifying areas where intentional design is necessary, adapting and evolving the design during development, and striving for consistency and cohesion in the design. By doing so, they can build a flexible, adaptable, and responsive system that caters to changing business needs while maintaining a clear direction and vision for future development.

What is the SAFe Portfolio Roadmap?

The SAFe Portfolio Roadmap visually depicts the planned initiatives, illustrating the sequence and timing of significant value pieces or CapEx-funded Epics.

Portfolio RoadmapThe SAFe Portfolio Roadmap, a visual representation of intended initiatives, provides a clear view of the proposed order and timing of substantial value pieces, known as CapEx-funded Epics, planned to be delivered over a specific timeframe. This roadmap provides a holistic overview of the organization’s strategic direction and the anticipated outcomes. Its primary function is to align all portfolio stakeholders – from executives to Agile teams – on the expected timeline for major initiatives, promoting transparency, enhancing coordination, and enabling more effective planning and prioritization within the SAFe context.

What is the purpose of the SAFe Portfolio Roadmap?

The SAFe Portfolio Roadmap aims to integrate lower-level roadmaps, guiding the timing and direction of solution roadmaps with its initiatives.

The Lean Portfolio Roadmap integrates lower-level roadmaps into a comprehensive view, with initiatives in the roadmap influencing the direction and timing of solution roadmaps. The roadmap may span multiple years to account for longer-term initiatives, requiring Agile estimation methods to maintain flexibility and adaptability. This cohesive plan serves as a guiding force for the organization, enabling it to navigate the path to the desired future state effectively.

How do you establish a vision for the Portfolio?

Establishing a portfolio vision involves aligning it with the organization’s long-term goals, guided by Strategic Themes in SAFe.

Establishing a portfolio vision in SAFe starts by synchronizing it with the organization’s long-term objectives. This vision is not static but adaptable, allowing it to evolve as the organization progresses toward its goals. The direction of this vision is shaped by Strategic Themes, which act as inputs. The vision must be rooted in the organization’s strategic priorities and ambitions. Setting measurable outcomes is vital to validate the vision’s effectiveness and track progress. These could include indicators, milestones, or other metrics clearly showing the portfolio’s performance.

How do you define measurable outcomes for the portfolio?

Measurable outcomes for the portfolio are defined by aligning them with strategic objectives and ensuring they are quantifiable.

In the context of a SAFe portfolio, defining measurable outcomes entails linking them directly to the organization’s strategic goals. They must be quantifiable, enabling precise tracking of progress and achievement. These outcomes can encompass a variety of metrics depending on the nature of the organization’s objectives, such as performance indicators, project milestones, or customer satisfaction levels. It’s also important to ensure these metrics are adaptable and can change in response to shifting goals or market conditions.

How does the Portfolio Roadmap support business forecasting?

The Portfolio Roadmap supports business forecasting by providing a visual timeline of planned initiatives aligned with strategic objectives.

In SAFe, the Portfolio Roadmap acts as a visual guide, offering a timeline of upcoming initiatives that align with the organization’s strategic goals. It aids business forecasting by allowing stakeholders to see the direction and pace of their strategic initiatives. By consolidating lower-level roadmaps, it offers a broad view of planned work over an extended period, often several years. This allows for informed prediction of business outcomes, aiding in budgeting, resource allocation, and risk management decisions.

Regular forecasting using the roadmap offers organizations the confidence to meet timelines or the early warning required to take corrective action. By focusing on the next timebox, such as a Program Increment, this confidence allows organizations to limit their commitment and remain agile.

How do Portfolio and Solution roadmaps impact each other?

The relationship between portfolio and solution roadmaps is bi-directional, meaning each roadmap impacts the other.

The Portfolio Roadmap, comprising strategic themes and epics, guides the direction of Solution Roadmaps, which detail the tangible outcomes of these strategic decisions. Conversely, progress and insights from the Solution Roadmaps feed back into the Portfolio Roadmap, contributing to its continuous evolution. As such, they act in tandem, the Portfolio Roadmap setting the strategic path and the Solution Roadmaps providing the steps to reach that destination while influencing future portfolio decisions based on on-the-ground developments.

The Portfolio and Solution roadmaps impact each other in 4 specific ways, and they are:

  1. The Portfolio Roadmap sets the strategic direction and priorities for the organization. As a result, it influences the solution roadmaps by providing guidelines and goals that solution teams should strive to achieve. This ensures that individual solutions contribute to the organization’s broader objectives.
  2. Solution Roadmaps inform the portfolio roadmap by providing insights into the progress, challenges, and opportunities that solution teams encounter. This feedback can lead to adjustments in the Portfolio Roadmap, ensuring that the organization’s strategic direction remains relevant and adapts to changing circumstances.
  3. The bi-directional influence of roadmaps fosters a continuous alignment process. As the organization progresses, the portfolio and solution roadmaps are updated to reflect the latest information, ensuring that the strategic direction and individual solutions remain in sync.
  4. The mutual influence of roadmaps promotes collaboration between different teams and stakeholders within the organization. By understanding how their work impacts the broader portfolio and how the portfolio’s direction affects their projects, teams can better coordinate their efforts and work towards common goals.

How do you use Epics to Realize the Portfolio Vision?

Epics in SAFe materialize the Portfolio Vision by driving the development of significant, value-delivering initiatives.

In SAFe, Epics are the key drivers to realize the Portfolio Vision. They represent large-scale, value-delivering work items that encapsulate strategic initiatives. The portfolio vision is translated into actionable work through these epics, which then get decomposed into capabilities at the Program Level and further into features and stories at the team level.

As work progresses and epics are implemented, they achieve the portfolio vision. It’s a continual, value-centric process that ensures alignment of all levels of the organization with the portfolio vision.

What are Portfolio Epics?

Portfolio Epics are significant solution development initiatives that require the creation of a Minimum Viable Product (MVP) and approval from Lean Portfolio Management (LPM).

There are two types of Portfolio Epics, and they are:

  1. Business Epics are large-scale initiatives to deliver customer value or achieve a strategic business objective.
  2. Enabler Epics: These are initiatives focused on supporting or enhancing the organization’s infrastructure, processes, or capabilities to deliver Business Epics successfully.

Stakeholders need to agree on the intent and definition of Epics, which are developed and managed through the Portfolio Kanban system. Epics require analysis and the creation of a Lean business case for LPM to review and make a go/no-go decision. Defining the MVP is crucial for proving or disproving the Epic hypothesis.

Estimating the costs of an Epic, both for the MVP and the full implementation, is essential for understanding the potential investment required. T-shirt sizing is a simple way to estimate Epics, particularly in the early stages.

Forecasting an Epic’s duration is essential for proper portfolio functioning. To forecast duration, consider an Epic’s estimated size in story points, the historical velocity of impacted Agile Release Trains (ARTs), and the percent capacity allocation dedicated to the Epic.

How do you use the Lean Startup Cycle to implement Portfolio Epics?

The Lean Startup Cycle validates Portfolio Epics by building minimal viable products (MVPs), measuring outcomes, and learning from feedback.

The Lean Startup Cycle, consisting of Build-Measure-Learn steps, helps validate Portfolio Epics in SAFe. It begins by creating a minimum viable product (MVP) for an epic, the smallest possible version that delivers value and tests a hypothesis. Outcomes are then measured against the expected results. Learning comes from analyzing discrepancies and using them to adjust the epic or the approach.

Epics can enter the persevere state or be dropped depending on the results of the hypothesis. ART and Solution Train Epics may also warrant LPM attention, requiring a Lean business case and review through the Portfolio Kanban system.

This iterative process reduces risk and waste by confirming the epic’s value early in its lifecycle.

How do you use WSJF to prioritize your portfolio?

WSJF prioritizes the portfolio by calculating and comparing each item’s cost of delay and job size.

Weighted Shortest Job First (WSJF) is used in SAFe to prioritize the portfolio. It calculates a score for each item in the portfolio by dividing the cost of delay (CoD) by the job size. The CoD captures the item’s value over time, while the job size estimates the effort required to deliver it. This calculation helps to prioritize items that provide the highest value and urgency relative to their size.

What is WSJF?

WSJF, or Weighted Shortest Job First, is a prioritization method in SAFe that compares the relative cost of delaying work items.

WSJF ScoreWeighted Shortest Job First (WSJF) is a Scaled Agile Framework (SAFe) decision-making tool. It’s a prioritization method that ranks work items based on the cost of delay and job size. The aim is to prioritize items that deliver maximum value with the least effort in the shortest time. This approach helps to optimize the flow of value across the enterprise.

WSJF is a prioritization model used to determine the sequence of portfolio items based on their value and time-criticality. It helps organizations decide which initiatives to prioritize for maximum benefit. Within SAFe, WSJF is recommended for prioritization to avoid unnecessarily complex Cost-Of-Delay discussions.

What is the difference between WSJF and Cost of Delay?

WSJF uses relative values for Cost of Delay estimation, while traditional Cost of Delay utilizes actual values, like an amount of money expressed in a currency.

Traditional Cost of Delay (CoD), utilized in Kanban and Lean Product Development, employs tangible, numerical values, typically currency, to express the economic impact of delaying work items. This concrete measure provides an unambiguous sense of urgency. Still, it doesn’t factor in the size or complexity of tasks, which could result in larger, more complex tasks always being given priority, potentially impeding overall value delivery.

Contrastingly, Weighted Shortest Job First (WSJF) in SAFe uses relative scoring based on stakeholders’ input, considering factors like value, risk, and opportunity enablement. This relative scoring incorporates job size, providing a more balanced view of value vs. effort.

By dividing the CoD by job size, WSJF prioritizes tasks that deliver the most value for the least effort, fostering a quicker and more consistent flow of value.

However, this approach can be subject to interpretation and debate, given its reliance on stakeholder input and relative values instead of concrete numerical measures.

How does WSJF support decision-making?

WSJF supports decision-making by providing a quantifiable metric for comparing and prioritizing work items in the portfolio.

Weighted Shortest Job First (WSJF) aids decision-making in SAFe by providing a consistent, quantitative means to compare and prioritize work items. It balances the urgency and value of a work item against the effort required to complete it. Doing so helps stakeholders decide which items should be tackled first to deliver the most value to the organization in the shortest time.

How do you calculate WSJF scores?

WSJF scores are calculated by dividing the cost of delay by the job size for each portfolio item.

WSJF Calculation

In SAFe, the Weighted Shortest Job First (WSJF) scores calculation involves dividing the cost of delay by the job site. In SAFe, the cost of delay combines three relative values, and they are:

  1. User value
  2. Time criticality
  3. Risk reduction/opportunity enablement.

Job size represents the effort needed to complete an item. The resulting score provides a value that helps compare and prioritize items in the portfolio. Higher scores indicate a higher return on investment and are prioritized over lower scores.

How do you use WSJF at the Portfolio level?

WSJF at the Portfolio level is applied by assessing epics based on the Cost of Delay divided by Duration.

WSJF is a valuable tool in LPM. It helps organizations prioritize their initiatives based on their potential value and urgency, ensuring that the most critical and valuable projects are addressed first. Organizations can effectively balance short-term goals with long-term investments by understanding the nuances of WSJF and considering the variations at the Portfolio level.

At the Portfolio level in SAFe, Weighted Shortest Job First (WSJF) is implemented by evaluating epics using a specific formula: Cost of Delay divided by Duration. This formula allows us to assess the relative priority of epics based on their business value, time criticality, and risk reduction opportunity enablement, compared to the effort required to complete them. It ensures that the highest value constantly flows through the system by tackling the most critical work.

What are the challenges with using WSJF at the Portfolio Level?

The challenges with using WSJF at the Portfolio level include subjective scoring and difficulty estimating duration.

Using WSJF at the Portfolio level presents 3 specific challenges, and they are:

  1. Subjectivity in WSJF scoring: The relative scoring system in WSJF can lead to subjective judgments, underlining the need for diverse representation in decision-making.
  2. Difficulty estimating epic duration: Predicting the duration of large, complex epics with many unknowns can be challenging, affecting WSJF scoring.
  3. Balancing short and long-term objectives: The “Shortest Job First” principle in WSJF can pose challenges in balancing short-term wins against long-term investments at the Portfolio level.

To address the above challenges, there are 5 variations for WSJF to consider and they are:

  1. WSJF using Total Epic Effort: This approach factors in the total effort required to complete an Epic, promoting a comprehensive view of investment needs.
  2. WSJF using Predicted Duration: This variation leans on estimating the total time an Epic will take, aiding in better planning and scheduling.
  3. WSJF using Experimental Effort: This method emphasizes the effort needed for experimentation, fostering an innovative learning culture.
  4. WSJF considering Risk Factors: This version incorporates potential risks, ensuring a balanced approach to managing Epics’ uncertainties.
  5. WSJF within the Investment Horizons: This variation applies WSJF within specific investment horizons, enabling more targeted decision-making for short, medium, and long-term investments.

These variations allow for a more nuanced approach to prioritization at the Portfolio level.

How do you establish Lean Budgets and Guardrails for LPM?

Establish Lean Budgets and Guardrails in LPM by allocating funding to Value Streams and defining spending boundaries.

Lean Portfolio Management (LPM) establishes Lean Budgets and Guardrails by allocating funding to different Value Streams rather than specific projects or programs. This allows for more flexibility and responsiveness to changing business needs. On the other hand, Guardrails are defined as setting spending boundaries and policies that guide the decentralized decision-making process. These guardrails ensure alignment with the organization’s strategy and provide fiscal governance without the need for traditional project cost accounting.

What are Lean Budgets in LPM?

Lean Budgets in LPM refer to funding allocated to Value Streams instead of specific projects.

In Lean Portfolio Management (LPM), Lean Budgets allocate funding that differs from traditional project-based funding. Rather than assigning funds to specific projects or programs, Lean Budgets distribute funding to Value Streams. By funding Value Streams, organizations have more flexibility and can more easily adapt to changing business conditions without renegotiating budgets.

What are Guardrails in LPM?

Guardrails in LPM are defined boundaries and policies guiding decentralized decision-making.

In Lean Portfolio Management (LPM), Guardrails refer to the defined boundaries and policies that guide decentralized decision-making within the organization. They are created to ensure that decisions align with the company’s strategy and to provide fiscal governance. They can include spending limits, strategic investment directions, policies, and constraints. By setting these guardrails, organizations can allow teams to operate autonomously while ensuring alignment and governance.

Guardrails support lean budgets by offering governance and spending policies and practices. These guardrails ensure that the organization’s financial resources are used effectively and efficiently while maintaining control and oversight.

What are the benefits of Lean Budgets and Guardrails?

Lean Budgets and Guardrails offer benefits like increased agility, alignment, and financial governance.

Lean Budgets and Guardrails provide 3 specific benefits in Lean Portfolio Management (LPM), and they are:

  1. Lean Budgets and Guardrails increase agility by enabling the rapid reallocation of funds in response to changing business needs.
  2. Lean Budgets and Guardrails ensure alignment and governance by setting boundaries within which teams can operate autonomously while staying aligned with the organization’s strategy.
  3. By replacing project-based cost accounting with Lean Budgets, organizations can reduce overhead and simplify financial governance, allowing more focus on delivering value.

Lean Budgets and Guardrails provide funding and governance practices that improve development throughput while maintaining financial and fitness-for-use governance. This approach reduces friction, delays, and overhead associated with traditional budgeting and project management methods. By eliminating the need for time-consuming cost accounting and project-based funding approvals, Lean Budgets and Guardrails enable organizations to allocate resources more quickly and efficiently, resulting in faster decision-making, increased agility, and better alignment between strategic initiatives and available resources. Moreover, this streamlined funding approach fosters greater team collaboration and trust, improving overall performance and value delivery.

What is the value of implementing shorter funding cycles at the portfolio level?

Shorter funding cycles at the portfolio level offer quicker adaptation to market changes.

Implementing shorter funding cycles at the portfolio level allows organizations to adapt more swiftly to market or business environment changes. Instead of setting budgets annually, funding decisions are made at regular, shorter intervals. This allows for frequent reassessment of priorities based on current market conditions and business needs. By reducing the cycle time between funding decisions, organizations can reallocate resources to where they are needed most, improving their ability to deliver value and remain competitive in a rapidly changing business landscape.

Adopting shorter and incremental funding cycles enables organizations to make funding decisions aligned with their learning and delivery cadence. Approaches such as rolling wave planning, metered funding, and value engineering help organizations allocate resources more agilely, allowing them to adapt quickly to changing market conditions or customer needs. By using incremental funding, organizations can better prioritize their projects and initiatives while making better-informed decisions about whether to persevere, pivot, or abandon activities.

How do guardrails support rapid decision-making?

Guardrails expedite decision-making by providing predefined boundaries for autonomous decisions.

Guardrails in Lean Portfolio Management (LPM) expedite decision-making by setting clear parameters for team autonomous decision-making. Including investment limits and strategic directives allow for rapid decisions aligning with the organization’s strategic goals, reducing the need for constant higher-level approvals. Transitioning from traditional funding approaches to empowered decision-making necessitates the establishment of guardrails that provide clear criteria for prioritizing, resource allocation, and decision-making. These guardrails ensure accountability, furnish necessary data for informed decisions, and can be customized to the specific needs of various organizations, thereby fostering business agility and effective LPM adoption.

How do shorter funding cycles enable faster adaptation?

Shorter funding cycles enable faster adaptation by allowing a more frequent reassessment of priorities.

Shorter funding cycles pave the way for swift adaptation by enabling organizations to reassess and adjust their priorities regularly. This flexibility allows for dynamic responses to market shifts, technological changes, or new business opportunities, enhancing the organization’s agility, resilience, and competitiveness. In order to match the cadence of learning and delivery, the funding and budgeting cycles need to be abbreviated. Such incremental funding decisions support prioritization, aligning with the pace of learning and delivery, thus ensuring efficient and effective resource allocation.

How do you establish portfolio flow for optimal execution?

Establish portfolio flow for optimal execution by managing WIP, visualizing and limiting queues, and reducing batch sizes.

Portfolio flow, a key aspect of Lean Portfolio Management (LPM), can be established for optimal execution through several practices. Work in Progress (WIP) must be managed to maintain a sustainable pace of work and avoid overloading the system. Visualization of the work and queues helps identify bottlenecks and areas for improvement. Limiting queue lengths reduces wait times and increases flow. Reducing batch sizes and implementing frequent integration and feedback can improve quality and reduce risk. These practices collectively contribute to creating a smooth, efficient portfolio flow.

The Big Picture of the Scaled Agile Framework version 6 showing the Scaled Agile Portfolio level

What is Portfolio Flow?

Portfolio Flow is the movement and delivery of large initiatives through the portfolio Kanban system.

Portfolio Flow, in the context of SAFe, refers to the smooth and efficient movement and delivery of large initiatives or epics from ideation to delivery. It involves managing the flow of these epics through the Portfolio Kanban system, from the initial funnel stage, through review, analysis, and implementation. The goal is to balance the demand against the capacity of the Value Streams, maximize throughput, and ensure that the most valuable work is always the focus.

What is operational excellence in portfolio flow?

Operational excellence in portfolio flow is about achieving consistent, reliable outcomes through the efficient execution of Epics.

Operational excellence in portfolio flow, as per SAFe, encompasses delivering consistent, reliable results by executing Epics with maximum efficiency. It revolves around improving the flow of value through the portfolio by reducing lead time, minimizing variability, and managing capacity. It’s a vital part of Lean Portfolio Management and facilitates the reduction of delays in value delivery by swiftly identifying and addressing bottlenecks. This approach promotes better decision-making by providing frequent feedback on progress and performance.

What is Lean Portfolio Flow?

Lean Portfolio Flow is the efficient and effective delivery of portfolio value to the end user.

To delve deeper, Lean Portfolio Flow, within SAFe, is a principle that emphasizes the smooth and swift delivery of portfolio value directly to the end user. This principle encourages the reduction of batch sizes and the management of queue lengths to accelerate value delivery. By focusing on these areas, Lean Portfolio Flow helps organizations to react quickly to market changes, improve product development cycles, and ultimately deliver more value. It’s an integral part of the Lean Portfolio Management competency. It is designed to ensure that the strategy and execution alignment is maintained while being flexible enough to adapt to changes.

The LPM competency aligns strategy and execution by applying Lean and systems thinking approaches to strategy and investment funding, Agile Portfolio Operations, and governance. Improving the flow of customer value through the portfolio is a key economic driver for the enterprise.

Agile Portfolio Operations

What is Agile Portfolio Operations?

Agile Portfolio Operations is the function that ensures strategy and execution alignment in SAFe.

Agile portfolio operations are the backbone for coordinating and supporting decentralized execution across an organization. By embracing Agile principles and a Lean-Agile mindset, these operations empower Agile Release Trains (ARTs), Solution Trains, and teams to work autonomously while maintaining alignment with the overall strategy.

Agile Portfolio Operations coordinates and supports decentralized program execution in 4 specific ways, and they are:

  1. Coordinate Value Streams – Agile Portfolio Operations orchestrate value streams by aligning work flow across teams and programs to deliver customer value efficiently. This includes coordinating efforts, resolving dependencies, and facilitating smooth collaboration to ensure that strategic objectives are met effectively.
  2. Support Release Train Execution – by providing necessary resources, guidance, and support to Agile Release Trains (ARTs), the primary delivery vehicles in SAFe. Agile Portfolio Operations aid in removing roadblocks, aligning strategic objectives with execution, and ensuring that these value delivery pipelines run smoothly to produce consistent and reliable outcomes.
  3. Foster Operational Excellence – Agile Portfolio Operations emphasizes cultivating a culture of continuous improvement, quality, and efficiency. This means encouraging the adoption of Lean-Agile principles and practices, fostering innovation, and ensuring the organization maintains a customer-centric approach to delivering value.
  4. Measure and Improve Flow – Involves monitoring and optimizing the value movement through the system. It includes tracking key metrics related to throughput, cycle time, and work-in-progress (WIP) and using that data to identify bottlenecks, reduce waste, and improve the overall flow of value.

Who are the key stakeholders in Agile Portfolio Operations?

Effective Agile portfolio operations rely on collaboration and shared responsibilities among various organizational roles and groups.

LPM Agile Portfolio Operations - collaboration and responsibilitiesThere are 5 key stakeholder groups in Agile Portfolio Operations, and they are:

  1. Value Management Office (VMO): This group ensures value delivery and alignment with the organization’s strategic objectives.
  2. Lean Agile Center of Excellence (LACE): The LACE promotes and supports adopting Agile practices, tools, and culture across the organization.
  3. Release Train Engineer (RTE): The RTE facilitates and supports the work of ARTs and Solution Trains, ensuring alignment and effective execution of initiatives.
  4. Scrum Master/Team Coach: provide coaching and support to individual teams, helping them adopt and adhere to Agile principles and practices.

How do Agile Portfolio Operations coordinate value streams?

LPM Agile Portfolio Operations coordinates value streams by aligning strategy, funding, and execution.

Although many value streams operate independently, cooperation among solutions can provide unique, differentiating portfolio-level capabilities and benefits that competitors can’t match. Value Stream coordination defines how to manage dependencies and exploit the opportunities that exist only in the interconnections between value streams.

Value Stream Coordination manages dependencies between value streams and capitalizes on opportunities arising from their interconnections. When effectively coordinated, value streams can deliver unique and differentiated capabilities that give an organization a competitive advantage.

To exploit the potential of interconnected value streams, organizations need to focus on the following 6 key aspects:

  1. Coordination Roles: Assign specific roles to facilitate value stream coordination, such as Enterprise Architect, Solution Portfolio Management, and Value Management Office (VMO). These roles help provide technical guidance, oversee integrated solutions, and support efficient Agile Release Train (ART) execution.
  2. Apply Cadence and Synchronization: Implementing a shared PI or quarterly planning schedule, integrated demos, and Inspect & Adapt events enables multiple value streams to collaborate and deliver portfolio-level initiatives. This approach ensures that routine tasks happen predictably and lowers the transaction costs associated with change.
  3. Introduce New Portfolio-Level Work: Establish a reliable rhythm for adding new portfolio-level work at planning boundaries. This cadence helps release trains achieve enterprise predictability needs and manages epics through the Portfolio Kanban system.
  4. Ensure Integration Points: Perform partial integration throughout the planning interval when full integration is impossible. These cadence-based integration points are crucial for measuring portfolio velocity and accelerating learning.
  5. Portfolio Roadmap: Derive the portfolio roadmap from solution roadmaps, aggregating relevant aspects and their associated milestones into a comprehensive view. This higher-level perspective communicates the larger picture to enterprise and portfolio stakeholders.
  6. Release on Demand: Effective DevOps and Continuous Delivery Pipeline capabilities are vital for deploying and releasing integrated value. In some cases, additional considerations may require dedicated or shared services and system teams for individual release trains and across value streams to integrate the solution into a portfolio-level release.

How do Agile Portfolio Operations support ART execution?

Agile Portfolio Operations supports ART execution by setting strategic themes and lean budgets and facilitating cross-ART coordination.

It supports ART execution by establishing strategic themes and Lean budgets that guide the execution of work in ARTs. LPM also facilitates cross-ART coordination, ensuring that dependencies and interdependencies between different ARTs are effectively managed. This allows for synchronized execution across ARTs, enabling the organization to deliver value in a coordinated manner. It’s also a part of the LPM’s responsibility to manage risks and dependencies at the portfolio level, ensuring that ARTs can operate effectively.

There are 6 specific ways that Agile Portfolio Operations supports ART execution, and they are: 

  1. Strategic Alignment: Ensure ARTs align with the organization’s goals and objectives. Portfolio Management provides clear guidance on prioritizing initiatives, epics, and features contributing to achieving the desired business outcomes. This alignment helps ARTs focus on delivering value that supports the overall strategy.
  2. Resource Allocation: Portfolio Management facilitates effective allocation across different ARTs based on priorities and capacity. This involves determining the appropriate budget, staffing levels, and other resources required for each ART to achieve its objectives.
  3. Cross-ART Coordination: Foster collaboration and coordination among multiple ARTs working on interdependent initiatives. Portfolio Management identifies and addresses dependencies, risks, and potential obstacles to ensure smooth execution and minimize delays.
  4. Governance and Compliance: Establish clear governance and compliance guidelines that ARTs must adhere to during execution. This includes defining relevant policies, standards, and procedures related to quality, security, and regulatory compliance of the solutions delivered by the ARTs.
  5. Performance Metrics and Reporting: Define and monitor key performance indicators (KPIs) that assess the progress and performance of ARTs. Portfolio Management regularly reviews these metrics and provides feedback to the ARTs, enabling them to adapt and improve their processes for better results.
  6. Continuous Improvement: Encourage a culture of continuous improvement at the Portfolio level by sharing best practices, lessons learned, and success stories across ARTs. This helps create an environment where teams are motivated to refine their processes and achieve greater efficiency and effectiveness.

How does LPM foster operational excellence?

LPM fosters operational excellence by implementing Lean-Agile principles at the portfolio level.

LPM promotes a culture of continuous learning and improvement, reducing waste and optimizing the flow of value through the portfolio. LPM also encourages a systems thinking approach, focusing on understanding the portfolio as a whole rather than individual parts.

How do you move “Program Management” to “Value Management” with LPM?

You move from PMO to VMO in LPM by transitioning from project-centric to value-centric management.

It involves a shift from project-centric management to value-centric management. This means focusing on the flow of value to customers rather than managing individual projects. The VMO works on aligning strategy, funding, and execution across value streams and drives the organization toward its strategic objectives. This transition is key for organizations that want to improve their business agility and responsiveness to market changes.

Operating through LPM, the VMO leverages the current PMO’s specialized skills, knowledge, and relationships while transitioning themselves and the portfolio to a new Lean-Agile way of working.

What are the key activities of the Value Management Office?

The Value Management Office Engages in 11 key activities:

  1. Facilitates the portfolio events
  2. Works with the LACE to develop, harvest, and apply successful ART execution patterns across the portfolio
  3. Facilitates Lean budgeting and coordinates portfolio governance
  4. Fosters decentralized PI Planning and operational excellence
  5. Establishes objective metrics and reports progress toward business agility
  6. Focuses the portfolio on measuring and improving value delivery
  7. Leads the move to objective metrics, milestones, and Lean-Agile budgeting
  8. Establishes and maintains the systems and reporting capabilities
  9. Offer guidance for OKRs and KPIs
  10. Communicates and amplifies the portfolio’s strategy
  11. Fosters more Agile contracts and leaner Supplier and Customer partnerships

How does LPM manage value streams?

LPM manages value streams by aligning them with the organization’s strategic themes and Lean budgets.

Managing Value Streams involves coordinating the work between value streams, especially when they are interrelated or have dependencies. LPM also helps manage risks and dependencies at the portfolio level, ensuring that value streams can operate effectively. By managing value streams, LPM enables the organization to deliver value to customers in a coordinated and efficient manner.

Lean thinking is the foundation of Value Stream Management. The lean principles provide a shared mindset for everyone involved in solution delivery to improve operational efficiency and eliminate delays. Lean Portfolio Management (LPM) is accountable for establishing the value streams and fostering operational excellence.

How does LPM establish and support Communities of Practice?

LPM establishes and supports Communities of Practice by promoting a culture of continuous learning and improvement.

CoPs are groups of individuals who share a common interest or expertise and come together to learn from each other. LPM supports these communities by providing them with resources and facilitating their activities, encouraging knowledge sharing, problem-solving, and innovation across the organization.

How does LPM establish and support the LACE?

LPM establishes and supports the LACE by providing resources and fostering a Lean-Agile culture.

The LACE is a cross-functional body that drives and sustains the Lean-Agile transformation across the organization. LPM supports the LACE in its role of coaching, mentoring, and training individuals and teams in Lean-Agile practices and in its effort to drive continuous improvement across the organization.

Operating under the auspices of LPM, the Agile Center of Excellence also plays a significant role in fostering operational excellence. This typically includes:

The Lean-Agile Centre of Excellence fosters operational excellence in 6 ways, and they are:

  1. Facilitating Value Stream identification workshops
  2. Communicating the business need for SAFe
  3. Integrating Lean & Agile Practices and Fostering Communities of Practice
  4. Creating alignment around organizational changes
  5. Providing coaching and training to ART stakeholders, Solution Trains, and Agile Teams
  6. Establishing objective measures for progress, product, and process

How does LPM accelerate flow?

LPM accelerates flow by optimizing the value delivery process.

Portfolio Flow represents a state where Lean Portfolio Management continuously delivers new epics to Solution Trains and Agile Release Trains (ARTs) to fulfill the portfolio’s vision and strategic themes. Aligning strategy and execution through Lean and systems thinking approaches enhances business outcomes for enterprises adopting these principles.

To further optimize flow and drive value, the following eight flow accelerators can be employed:

  1. Visualize and Limit Work in Process (WIP): Overloading the portfolio with WIP can negatively impact performance, value delivery, and employee engagement. Make all significant epics visible, review and adjust the epic threshold, validate portfolio Kanban WIP limits, understand each value stream’s and ART’s capacity, and ignore sunk costs.
  2. Address Bottlenecks: Portfolio gridlock can hinder the progress of essential initiatives. Ensure the Lean Portfolio Management (LPM) team has proper decision-making authority, increase the pool of Epic Owners, understand ART capacity, and streamline the Lean Business Case process.
  3. Minimize Handoffs and Dependencies: Efficiently managing work through the portfolio Kanban requires collaboration and stakeholder engagement. Support Epic Owners, understand cross-value stream coordination requirements, and recognize the need to refactor value streams.
  4. Get Faster Feedback: Rapid customer feedback is crucial for evaluating new initiatives. Test business model assumptions, engage with customers early, and focus on leading indicators for Minimum Viable Products (MVPs).
  5. Work in Smaller Batches: Smaller batches improve system throughput and learning speed. Limit the number of epics reviewed during LPM events, reduce the transaction cost of reviewing and analyzing epics, conduct low-fidelity tests during analysis, leverage a common cadence, and reduce experiment size.
  6. Reduce Queue Lengths: Long queues can negatively impact enterprise competitiveness. Reroute non-portfolio work, attend to critical market events and rhythms, eliminate non-strategic ideas quickly, and replace fixed schedules with flexible roadmaps.
  7. Optimize Time in ‘The Zone’: Executives need dedicated time to develop and evolve strategic plans. Allocate sufficient time for strategy development, hold effective portfolio events, recognize when a Portfolio Epic no longer needs LPM focus, eliminate redundant portfolio governance practices, and invest in meeting facilitation.
  8. Remediate Legacy Policies and Practices: Address historical impediments by identifying legacy portfolio activities that should be stopped or replaced and ensuring reasonable fidelity to the adopted process.

How does LPM measure and improve flow?

LPM measures and improves flow by using metrics and feedback loops.

LPM uses metrics that provide insight into the effectiveness and efficiency of the value delivery process. LPM also establishes feedback loops that enable continuous learning and improvement, enabling the organization to optimize flow continually.

The three most common metrics that LPM uses to measure and improve flow are: 

  1. Flow time is needed to complete all steps in a defined workflow. Portfolio flow time can be estimated from ideation to production or when an epic enters the “review” state until its hypothesis is evaluated.
  2. Flow load represents the number of items currently in the system. Maintaining a limited number of active items in portfolio WIP is crucial for enabling the fast flow of strategic value. 
  3. Flow distribution measures the volume of each type of work in the system at a given time. An informative view of portfolio flow distribution can reveal the trend of money allocation across investment horizons.

While these flow metrics can pinpoint improvement opportunities for portfolio work, they cannot provide a complete picture independently. Qualitative analysis is necessary to offer context for the flow metrics and better understand the portfolio’s current state.

How does LPM manage risk?

LPM manages risk by implementing risk-adjusted backlog prioritization and iterative development, which help manage risk.

  • Risk management helps organizations prioritize their investments, make informed decisions, and optimize resource allocation. A well-structured risk management process ensures that potential issues are identified and addressed before they escalate, minimizing negative impacts on the portfolio.
  • Agile principles advocate for flexibility, transparency, and collaboration. Aligning risk management with these principles ensures that risk-related information is shared openly, and teams can adapt their risk response strategies based on evolving circumstances and learning.

Lean Governance

LPM Lean Governance - collaboration and responsibilitiesWhat is Lean Decision Making in LPM?

Lean Decision Making in Lean Portfolio Management (LPM) is an approach to making informed decisions quickly, often with incomplete information.

Lean Decision Making involves making strategic choices rapidly and informedly, frequently based on incomplete or uncertain data. This practice, adopted by LPM, hinges on the principle that making good-enough decisions faster often yields better results than waiting for perfect data. This approach aligns with Lean thinking and promotes adaptability, encouraging decision-makers to pivot based on new information or changes in the business environment.

Decentralized decision-making and empowering teams enable faster decision-making, reduce bureaucracy, and allow for more adaptability to changing market conditions. Organizations can foster decentralized decision-making using 3 specific strategies, and they are:

  1. Establishing clear decision-making criteria and guidelines
  2. Providing teams with access to relevant information and resources
  3. Encouraging a culture of trust and autonomy

What is Adaptive Forecasting and Budgeting in LPM?

Adaptive Forecasting and Budgeting in LPM is a method for financial planning that considers frequent changes and uncertainty in the business landscape.

Adaptive Forecasting and Budgeting is a financial planning technique that LPM employs, acknowledging business scenarios’ inherent unpredictability and fluidity. Unlike traditional, rigid budgeting methods, this approach enables more flexibility by adjusting financial plans in response to evolving business conditions and market demands. This method helps ensure the organization can quickly respond to changes, allocate resources efficiently, and maintain a competitive edge.

Lean governance supports spending, audit, compliance, expenditure, measurement, and reporting oversight. It requires the active engagement of the Value Management Office (VMO), Lean-Agile Center of Excellence (LACE), Business Owners, and Enterprise Architects. A Lean approach to budgeting replaces fixed, long-range budget cycles and financial commitments with a more fluid and agile process. Budgets are adjusted on a cadence, typically every six months or when significant events warrant it. 

Adaptive Forecasting and budgeting offer organizations 3 specific benefits, and they are:

  1. Respond more effectively to changes in market conditions or business priorities.
  2. Allocate resources more efficiently and avoid overcommitment
  3. Foster a culture of continuous improvement and learning

What is Lightweight Reporting in LPM?

Lightweight Reporting in LPM is a simplified reporting process that provides enough information to make informed decisions.

As implemented by LPM, Lightweight Reporting offers a simplified and streamlined process for conveying crucial information. Rather than overwhelming stakeholders with excessive data, this approach emphasizes providing the necessary information to make informed decisions. The goal is to reduce the time spent producing and consuming reports, focusing instead on delivering value and driving strategic objectives forward.

Simplifying reporting processes and focusing on relevant, actionable metrics is essential for effective Lean Governance. This approach minimizes the overhead associated with traditional reporting and allows organizations to focus on key performance indicators that drive value.

There are three steps to implement lightweight reporting, and they are:

  1. Identify the most relevant metrics that align with strategic objectives
  2. Standardize reporting templates and processes to reduce complexity
  3. Encourage regular reviews and data-driven discussions among stakeholders

What is Continuous Improvement in LPM?

Continuous Improvement in LPM is an ongoing effort to enhance the portfolio’s processes, products, and services.

Continuous Improvement within the context of LPM is an unending endeavor to incrementally improve a portfolio’s processes, products, and services. It’s about fostering a culture where every team member is empowered to identify areas of potential improvement and suggest changes. Organizations can realize significant cumulative effects that enhance efficiency, quality, and customer satisfaction by implementing these changes over time.

Organizations can promote a culture of learning, experimentation, and improvement across the portfolio using 3 strategies, they are: 

  1. Encourage teams to share best practices and lessons learned
  2. Provide opportunities for training and skill development
  3. Implement regular retrospectives and process improvement initiatives

What is the Innovation and Accounting Framework in LPM?

The Innovation and Accounting Framework in LPM is a methodology for evaluating and funding innovative initiatives.

The Innovation and Accounting Framework, as utilized in LPM, is a systematic approach designed to assess, fund, and track innovative projects. This framework allows organizations to allocate resources to groundbreaking initiatives in a manner that balances risks and rewards. By using this methodology, companies can encourage innovation, manage potential losses, and maximize value creation.

What are feedback loops in LPM?

Feedback loops in LPM provide constant information into the system to allow continuous improvement and adaptation.

Feedback loops in the context of LPM represent a continuous cycle of information feedback that enables constant adjustment and learning. These mechanisms help to collect information about the outcome of various actions and decisions, which is then used to make necessary corrections and improvements. This approach allows the organization to continuously learn and adapt, enhancing its agility and responsiveness to changing conditions.

Establishing regular feedback and communication mechanisms help organizations in 3 ways:

  1. Identify potential issues and bottlenecks early
  2. Ensure alignment between teams and business objectives
  3. Foster a culture of transparency and collaboration

What are Compliance and DevOps in LPM?

Compliance and DevOps in LPM refer to integrating regulatory compliance into the DevOps process.

In the context of LPM, Compliance, and DevOps refers to incorporating regulatory standards into the DevOps process. This approach ensures that as the development and operations teams work together to deliver software quickly and efficiently, they also adhere to necessary regulatory requirements. This minimizes the risk of non-compliance and fosters a culture of shared responsibility toward maintaining regulatory standards.

By integrating compliance requirements with DevOps practices, Lean governance ensures a smooth and secure value delivery process. This more continuous approach allows organizations to address compliance obligations while minimizing risks and overhead.

Organizations can integrate compliance with DevOps practices in 3 steps, and they are: 

  1. Embed compliance checks and audits into the development and deployment processes
  2. Automate compliance-related tasks and documentation wherever possible
  3. Collaborate closely with relevant stakeholders to ensure adherence to regulations

How does LPM coordinate Compliance?

LPM coordinates compliance by integrating it throughout the organization’s work processes and making it a shared responsibility.

LPM manages compliance by instilling it into the organization’s work processes. It promotes an environment where adherence to regulatory standards is not an afterthought but an integral part of the operational flow. By making it a shared responsibility across teams, LPM ensures that compliance becomes a collective endeavor, thus reducing the risk of regulatory missteps and enhancing the overall standard of the organization’s output. By having compliance as a cornerstone of its operational strategy, LPM helps to create an organizational culture that values integrity and transparency.

Lean governance includes coordinating ongoing compliance with relevant standards, such as internal or external financial auditing constraints and industry legal or regulatory guidelines. This approach minimizes overhead while maintaining adherence to necessary requirements.

Organizations can achieve continuous compliance coordination through the following 3-step process:

  1. Establishing clear communication channels between teams, stakeholders, and regulatory authorities
  2. Implementing robust monitoring and reporting processes to track compliance status
  3. Regularly reviewing and updating compliance policies and procedures to reflect regulations or business practice changes.

Evidence-based Decision Making

What are LPM metrics and KPIs?

LPM metrics and KPIs are quantifiable measures used to evaluate the effectiveness of Lean Portfolio Management.

In the context of SAFe, LPM metrics and KPIs are specific, quantifiable measures used to gauge the success and efficiency of Lean Portfolio Management. These measures provide insights into various aspects of the portfolio, from financial performance and delivery speed to quality and customer satisfaction. These metrics serve as navigational aids, guiding the organization toward its strategic objectives and helping it identify areas that need improvement or adjustment.

How are metrics used in LPM?

In Lean Portfolio Management, using Metrics and Key Performance Indicators (KPIs) is essential for evaluating performance and driving continuous improvement. Identifying the right metrics for LPM is crucial for effective decision-making and alignment with strategic objectives. Regularly monitoring and using KPIs can help organizations identify areas for improvement and drive progress toward their goals.

Each portfolio establishes the minimum metrics needed to measure portfolio performance to ensure:

  • Progress with strategy implementation
  • Alignment of strategy and execution
  • Spending aligns with the agreed boundaries
  • Business outcomes are continually improving without too much oversight of feature implementation
  • LPM competency is improving

What are LPM measurable outcomes?

LPM measurable outcomes are tangible results that can be tracked and evaluated to determine the success of Lean Portfolio Management.

Measurable outcomes in LPM, within the SAFe framework, refer to distinct, quantifiable results that can be tracked and evaluated to assess the effectiveness of Lean Portfolio Management. These outcomes may include the successful delivery of value, the realization of strategic objectives, improved quality, and enhanced customer satisfaction. By monitoring these outcomes, organizations can assess their performance and inform future strategic planning and decision-making processes.

Organizations should define Objectives and Key Results (OKRs) for Strategic Themes and Value Stream Key Performance Indicators (KPIs) to measure business outcomes effectively. 

  • OKRs are a goal-setting framework that helps align ambitious goals with reality by providing objective evidence of progress (Key Results) toward achieving business outcomes (Objectives). 
  • Value Stream KPIs are specific, quantifiable measures of business results for the value streams within the portfolio, which are informed by the strategic themes.

How do you measure LPM flow?

Measuring LPM flow involves tracking value movement through the portfolio to assess speed and efficiency.

In LPM, measuring flow refers to tracking and analyzing the value movement through the portfolio. This includes observing the speed at which work items move from concept to cash and the efficiency with which value is delivered. Assessing flow can help identify bottlenecks, inefficiencies, and areas for improvement, enabling the organization to optimize its processes and enhance its ability to deliver value rapidly and consistently.

Understanding and improving the flow of work is vital for delivering value efficiently. Flow time, load, and distribution are key measures to help organizations assess their portfolio performance. 

  • Flow time measures the interval needed to complete all steps in the portfolio workflow. 
  • Flow load indicates the number of epics currently in the system by process state, while 
  • flow distribution measures the amount of each type of work in the portfolio for a given time. 

Focusing on accelerating flow and providing continuous epics is essential for achieving the portfolio’s vision and enterprise business objectives.

How do you use hypothesis-driven development in LPM?

Hypothesis-driven development in LPM involves using assumptions to guide product development and validating or disproving these assumptions through experimentation and learning.

Hypothesis-driven development, as used in LPM, centers around utilizing assumptions as a guiding principle for product development. Teams generate hypotheses about what they believe will deliver value, then develop and deliver increments of work based on these hypotheses. They then validate or disprove these assumptions through real-world experiments and user feedback. This approach promotes learning, reduces waste, and enhances the organization’s ability to deliver products and services that meet customer needs and expectations.

Hypothesis-driven development encourages experimentation and learning through iterative, data-driven development. By evaluating hypotheses and adapting plans based on evidence and emerging information, organizations can make more informed decisions and quickly respond to market or customer needs changes.

How do validation and adaptation support decision-making in LPM?

Validation and adaptation in LPM support decision-making by providing feedback, learning from implemented strategies, and allowing for necessary adjustments.

Validation involves assessing whether implemented strategies and decisions produce the desired outcomes, while adaptation allows for necessary adjustments based on this feedback. This cycle of validation and adaptation promotes learning, encourages flexibility, and enhances the organization’s ability to make informed decisions that drive it toward its strategic objectives.

Regularly validating assumptions and adapting plans based on emerging information and evidence is key to effective decision-making. Organizations can measure their competency in achieving business agility using the SAFe Business Agility assessment and the LPM core competency assessment. These assessments help organizations understand their proficiency in Strategy and Investment Funding, Agile Portfolio Operations, and Lean Governance, enabling them to take targeted actions to improve performance.

Lean Portfolio Management Events

What are LPM events?

LPM events in SAFe are scheduled activities facilitating various portfolio management aspects.

LPM events, within the context of SAFe, are planned activities that cover different facets of portfolio management. These events include strategic planning sessions, portfolio sync meetings, and the definition of lean-budget guardrails. They serve as structured opportunities for stakeholders to align on strategy, make decisions, review progress, and adapt plans as necessary. These events foster collaboration, promote transparency, and ensure consistent alignment toward strategic objectives across the portfolio.

What are the primary LPM events?

The Scaled Agile Framework (SAFe) suggests a set of events for operating a portfolio, which include:

  1. Strategic Portfolio Review
  2. Portfolio Sync
  3. Participatory Budgeting

However, it has been observed that these events may not be optimized for effectiveness in all contexts. It’s essential to strike a balance between too few and too many meetings, finding the “sweet spot” that ensures the effectiveness of each event without being overwhelming.

One challenge with the Lean Portfolio in SAFe is that it provides solutions without explicitly discussing the problems these solutions aim to solve. For effective customization, it’s important to understand the problem space first.

What is the purpose of LPM events?

The primary purpose of portfolio events is to make decisions related to moving forward with various aspects of the portfolio and to validate that activities outside the events are progressing correctly. To better understand which aspects need attention, we can examine the key elements or “Alphas” of a portfolio:

  1. Vision: The Portfolio Canvas describes the current and future states of the Portfolio Vision.
  2. Changes: Epics describe the changes that the Portfolio wants to make.
  3. People: Development Value Streams contain teams of people that can make the desired changes in the Portfolio.

The number of elements in a portfolio may vary, with some organizations needing more physical representations to make necessary decisions. However, it’s crucial to consider whether these additional elements contribute to the portfolio’s goal of “Value in the sustainably shortest lead time” or if they are adding complexity.

Epics go through a lifecycle that involves the progressive elaboration of a business case and, if approved, further progress through implementation. Understanding the events that perform, schedule, or track the activities affecting the operation of the portfolio is essential for effective Lean Portfolio Management.

To explore the scheduled events for Lean Portfolio Management, it’s essential to consider the following:

  1. What decisions need to be made?
  2. What information is needed?
  3. Where does the information come from?
  4. What is the frequency of the events?

What is the purpose and significance of LPM events?

The purpose of LPM events in SAFe is to facilitate strategic alignment, decision-making, progress review, and plan adaptation.

LPM events serve several important functions in SAFe. They bring together stakeholders to facilitate strategic alignment, ensuring everyone is moving in the same direction towards common goals. These events also provide a platform for making decisions, reviewing progress, and adapting plans based on feedback and changing circumstances. By promoting collaboration, transparency, and regular alignment, LPM events help drive the successful execution of the portfolio’s strategy and value delivery.

  • LPM events are a foundation for aligning strategic objectives, portfolio execution, and budget allocation.
  • They facilitate communication, decision-making, and synchronization among stakeholders to optimize the value delivered by the organization.
  • By conducting these events on a regular cadence, organizations can effectively manage their portfolio, adapt to changes in the market, and continuously improve their processes.

What is the proper cadence for LPM events?

The cadence for LPM events in SAFe is typically determined by the Program Increment (PI) timeline.

The frequency of LPM events in SAFe generally aligns with the Program Increment (PI) timeline, typically 8-12 weeks. The specific cadence for each event may vary based on its purpose and the organization’s needs. For example, strategic planning sessions might occur annually or biannually, while portfolio sync meetings could occur more frequently. Aligning these events with the PI timeline ensures consistency, facilitates synchronization across the portfolio, and enables timely feedback and adaptation.

The typical cadence for LPM events is as follows:

  • Strategic Portfolio Review: Quarterly
  • Portfolio Sync: Monthly
  • Participatory Budgeting: Semi-annually

What is the LPM Strategic Portfolio review?

The Strategic Portfolio Review focuses on two main decisions:

  1. Vision: Determine the vision for the portfolio, including measurable outcomes and metrics.
  2. Set of Approved Epics: Decide on the set of approved Epics that provide the Development Value Streams with the intent of what they should be working on.

Information is needed from the Portfolio Vision and the Epics themselves to make these decisions. The Strategic Portfolio Review might be better split into two separate meetings: one focusing on updating the vision and the other on determining the set of Epics for the next timebox.

What is the LPM Strategic Portfolio Vision session?

This event focuses on updating or creating the Vision. It needs input from the last set of PI or quarterly reviews and PI or quarterly planning to understand what was completed in the previous PI and what the teams think they can do in the current PI. It should happen within the first Iteration within the Program Increment, and its output is an updated Portfolio Vision.

What is the LPM Strategic Portfolio Epic approval session?

This event focuses on the set of Epics that should be in play for the next Program Increment. It needs input from the Portfolio Vision and the Epics themselves, either in the form of Business Outcomes and Leading Indicators to support the continuation of the Epic and avoid cancellation or a Lean Business Case for those Epics seeking Approval. This event should happen during the Program Increment, and its output is a Prioritized Set of Epics.

What are LPM Strategic Portfolio event anti-patterns?

  • Increasing Number Of Epics: Focus on cancellation before approval to avoid accumulating too much Work-In-Process and spreading the fixed capacity/effort across more work.
  • Everything Is Approved: If every idea proposed passes through the Approval process, question the value of the process. Ideally, only a few ideas should make it through, reflecting a set-based approach.
  • Lack of Participation: Present decision-makers with the economics of the situation to emphasize the importance of their participation in steering the consumption of investment in people and resources.

Understanding and organizing these portfolio events will help you better manage the lifecycle of Epics and the overall Lean Portfolio Management process.

What is the LPM Portfolio Sync?

The LPM Portfolio Sync is a regular meeting in SAFe where key stakeholders discuss portfolio updates and make strategic decisions.

In the SAFe framework, the LPM Portfolio Sync is a routine assembly involving crucial participants, including Epic Owners, Enterprise Architects, and others, who convene to discuss updates on the portfolio and make strategic decisions. This gathering serves as an opportunity to align all players on the portfolio’s current status, upcoming initiatives, and any adjustments to the strategic direction. It ensures that all parties work towards the same goals, fostering transparency and promoting organizational efficiency.

What is the purpose of the LPM portfolio sync?

The LPM Portfolio Sync aims to facilitate alignment and decision-making on strategic portfolio matters.

The LPM Portfolio Sync is designed to enable alignment and decision-making on matters of strategic importance to the portfolio. It brings together stakeholders to discuss the portfolio’s current status, the initiatives’ progress, and any strategic direction changes. It ensures all parties involved are on the same page and working towards the same objectives. This alignment is key to ensuring that the portfolio is effectively managed and delivers value aligned with the organization’s strategic goals.

What decisions are made in the LPM portfolio sync?

Decisions made in the LPM Portfolio Sync typically involve strategic direction, allocation of resources, and approval or rejection of new initiatives.

The LPM Portfolio Sync is a forum where important decisions concerning the strategic direction of the portfolio are taken. These may include decisions on allocating resources, approving or rejecting new initiatives, or adjusting the strategic direction based on the portfolio’s current status and feedback. By fostering a collaborative decision-making environment, Portfolio Sync ensures that all decisions are well-informed and aligned with the organization’s strategic goals.

Is the Portfolio Sync a Planning Meeting?

Yes, the Portfolio Sync is a planning meeting, not a reporting one. The event aims to produce a localized plan for collaborations between participants over the timebox between the current meeting and the next one. Focusing on planning can keep the meeting short and focused, allowing those not involved in resolving issues to continue their work.

What are the LPM portfolio sync sub-meetings?

Portfolio Sync (Epic Progress)
  • Objectives and focus: The Epic Progress sub-meeting ensures that activities to progress epics through their lifecycle happen efficiently. It provides a forum for Epic Owners to raise impediments and the group to start planning how to resolve them.
  • Facilitating as a planning meeting: The meeting should be facilitated as a planning event, with the group scheduling the work needed to resolve impediments and identify the necessary participants.
  • Recommended cadence: To provide sufficient feedback to the portfolio, holding these meetings at least once per iteration is recommended. They should be short, aiming for an hour at most.
Portfolio Sync (Development Value Stream Coordination)
  • Objectives and focus: The Development Value Stream Coordination sub-meeting addresses issues arising from development value streams.
  • Aligning with the organization’s cadence: To ensure issues are addressed in a timely manner, it is essential to align the meeting cadence with the organization’s agile practices.
  • Recommended cadence: Daily meetings are ideal, but aligning with the Scrum-of-Scrums cadence is also a sensible option. If held daily, meetings should be short, lasting no more than 30 minutes.

What operational items are covered in the LPM portfolio sync?

Operational items covered in the LPM Portfolio Sync include progress updates, resource allocation, and strategic adjustments.

In the regular LPM Portfolio Sync, operational discussions revolve around the implementation of epics, the status of KPIs, addressing dependencies, and removing impediments. The meeting provides an opportunity to identify and address any dependencies or impediments that may hinder the execution of initiatives or the flow of value across the organization.

What is the relationship between the LPM portfolio sync and the Strategic Portfolio Review session?

The Portfolio Sync is a frequent touchpoint for stakeholders to discuss portfolio progress and operational challenges. In some cases, the Strategic Portfolio Review may replace the Portfolio Sync, which offers a broader portfolio alignment and strategy perspective.

What is the ideal cadence and frequency for the LPM Portfolio Sync?

The ideal cadence for the LPM Portfolio Sync in SAFe is to keep it in sync with Scaled Daily Scrum events to allow rapid escalation of impediments.

The frequency of the LPM Portfolio Sync in the SAFe framework is typically tied to the Program Increment (PI) timeline, which usually spans 8-12 weeks. Aligning the Portfolio Sync with this timeline ensures regular and timely updates on the portfolio’s status, promoting effective decision-making. The specific frequency can be adjusted based on the organization’s needs, but maintaining it in sync with the PI timeline fosters consistency and enables efficient feedback loops.

  • Synchronizing Scaled Daily Scrum events for different levels allows rapid impediments to escalate within the organization.
  • Aligning with Scrum-of-Scrums cadence: Another option is aligning with the Scrum-of-Scrums cadence within the Agile Release Train, ensuring efficient team communication.

What are LPM sync patterns and anti-patterns?

LPM sync patterns include regular meetings, clear agendas, and decision-making, while anti-patterns include reporting instead of planning, inconsistent attendance, and lack of focus.

Positive patterns for the LPM sync involve routine meetings with clear agendas that promote efficient decision-making. The sync’s success relies on consistent attendance from all relevant stakeholders and the effective use of time to discuss strategic and operational matters. On the other hand, anti-patterns to avoid include inconsistent attendance, which can lead to misalignment and missed information, and a lack of focus during discussions, which can derail the meeting from its primary objective of promoting strategic alignment and effective decision-making, and a focus on reporting instead of planning: This classic stand-up anti-pattern occurs when participants focus on reporting their work instead of planning collaborations. Fostering cooperation and shared investment in the portfolio is essential to fix this.

What is Participatory Budgeting in LPM?

Participatory Budgeting in LPM is a method to allocate budgeting decisions to those who these decisions will impact.

Known as Participatory Budgeting, this approach in Lean Portfolio Management allows for the distribution of budget decision-making among individuals who will directly feel the effects of these decisions. Instead of a top-down approach, where a small group of executives makes budgeting decisions, Participatory Budgeting enables a wider range of stakeholders to have a say. This promotes more informed decision-making, incorporating a broader perspective and understanding of organizational needs and priorities.

What is the purpose of Participatory Budgeting in LPM?

Participatory Budgeting in LPM aims to democratize financial decision-making for improved investment outcomes.

Participatory Budgeting serves to democratize financial decision-making within Lean Portfolio Management. This is accomplished by involving a more diverse group of stakeholders in budgeting decisions, offering a more holistic view of the organization’s needs and priorities. By doing this, the organization is likely to see improved investment outcomes as decisions are not solely based on the perspective of a small group of executives. Still instead, they are rooted in a comprehensive understanding of the organization’s operational realities and strategic objectives.

What are the objectives of the LPM Participatory Budgeting events?

LPM Participatory Budgeting events aim to make informed and democratic financial decisions.

The goal of Participatory Budgeting events within Lean Portfolio Management is to make financial decisions that are both informed and democratic. These events capture diverse perspectives on the organization’s needs and priorities by involving various stakeholders. The result is a budgeting process that reflects the organization’s collective wisdom, leading to more effective and relevant financial decisions that align with the organization’s strategic goals and operational realities.

What is the ideal setup and frequency for LPM Participatory Budgeting events?

The ideal setup for LPM Participatory Budgeting events is a regular meeting with all relevant stakeholders, with the frequency decided based on the organization’s needs.

The best structure for Participatory Budgeting events within Lean Portfolio Management is regularly meeting with all relevant stakeholders. The frequency of these meetings is determined based on the organization’s needs, but it is important to ensure they occur regularly to maintain alignment and respond to changing circumstances.

It is typically conducted semi-annually to balance agility and commitment while avoiding unnecessary disruptions to ongoing work.

Participatory Budgeting events need to occur far enough in advance of the investments changing so that those changes can be enacted. It is suggested to run it every six months, involving between 50 and 100 people.

By having a consistent schedule and involving the right people, these events can effectively democratize financial decision-making and lead to improved investment outcomes.

How does LPM participatory budgeting involve stakeholders?

LPM participatory budgeting involves stakeholders by giving them a voice in financial decision-making.

Participatory Budgeting within Lean Portfolio Management actively involves stakeholders by providing them a platform to influence financial decisions. This is achieved by inviting them to regular budgeting meetings, where they can present their views on the organization’s priorities and needs. This inclusive approach helps ensure that budgeting decisions reflect a broad understanding of the organization’s operations and strategic goals, leading to more relevant and effective financial decisions.

How does LPM participatory budgeting adjust value stream budgets?

LPM participatory budgeting adjusts value stream budgets based on collective decision-making.

In the context of Lean Portfolio Management, Participatory Budgeting can adjust value stream budgets based on collective decision-making. By involving various stakeholders in budgeting discussions. This approach captures diverse perspectives on the organization’s needs and priorities. As a result, adjustments to value stream budgets are made based on a comprehensive understanding of the organization, ensuring that financial resources are allocated to align with operational realities and strategic objectives.

What are common participatory budgeting patterns and anti-patterns?

Common Participatory Budgeting patterns include democratic decision-making and broad stakeholder involvement, while anti-patterns include the exclusion of relevant stakeholders and irregular meetings.

In Participatory Budgeting within Lean Portfolio Management, common positive patterns include democratic decision-making and broad stakeholder involvement. These practices ensure that a comprehensive understanding of the organization informs budgeting decisions. On the other hand, anti-patterns to avoid include the exclusion of relevant stakeholders from budgeting discussions and irregular meetings. These practices can lead to a narrow perspective on the organization’s needs and priorities, leading to less effective budgeting decisions.

Institutional Inertia: A challenge with Participatory Budgeting is the tendency for organizations to maintain the status quo rather than pursuing value relentlessly. A Development Value Stream should be dropped if it is no longer valuable or viable. Avoid inventing work to keep a Development Value Stream busy, as it wastes money that could be used for more valuable purposes.

What is the impact of effective LPM events on LPM?

Effective LPM events, such as Participatory Budgeting, positively impact LPM by enhancing decision-making and aligning with organizational objectives.

Participatory Budgeting and other effective Lean Portfolio Management events enhance the LPM process. By involving a wider range of stakeholders in decision-making, these events provide a comprehensive perspective on the organization’s needs and priorities. As a result, decisions made through these events are more likely to align with the organization’s operational realities and strategic objectives, leading to better investment outcomes and improved organizational performance.

  • Effective LPM events foster a culture of collaboration, transparency, and continuous improvement, leading to improved portfolio performance and value delivery.
  • By conducting these events regularly, organizations can maintain alignment, adapt to change, and optimize their investment in strategic initiatives.
  • Periodically re-evaluating Development Value Stream setups ensures they remain fit for purpose, align with the organization’s objectives, and respond to market or strategic direction changes.

Implementing Lean Portfolio Management

What are the benefits of implementing LPM early in the transformation roadmap?

  • Aligns strategy and execution: Implementing LPM early helps organizations align their strategy with execution, ensuring that all efforts are focused on achieving the desired outcomes.
  • Promotes transparency and visibility: Early implementation of LPM fosters a culture of transparency and visibility, enabling stakeholders to track progress and make informed decisions.
  • Supports continuous improvement: LPM encourages organizations to embrace continuous improvement, refining processes and practices for better results.
  • Enables faster delivery: By streamlining processes and focusing on value, early LPM implementation accelerates the delivery of valuable solutions to customers.

What are the challenges of implementing LPM?

Implementing LPM requires a shift in mindset, organizational structure, and processes. Organizations may face challenges such as resistance to change, lack of understanding of Lean principles, and the need for stakeholder alignment. However, these challenges can be overcome with the right approach, resulting in improved efficiency, decision-making, and adaptability.

How do you involve your leadership team in establishing the LPM function?

  1. Introduction to Implementing the LPM Function: Establishing the LPM function involves defining roles and responsibilities, assembling a team of leaders, and setting up an operating structure.
  2. Roles and Responsibilities: Key roles in the LPM function include portfolio managers, product managers, and agile coaches, among others. These individuals are responsible for guiding the organization’s strategic direction, prioritizing work, and ensuring the successful delivery of value.
  3. Assemble your leaders: Identify individuals with the skills, knowledge, and experience needed to lead the LPM function and create a high-performing team.
  4. Define the Lean Portfolio Management function: Establish the scope, objectives, and responsibilities of the LPM function within the organization.

What is the funding and operating structure of LPM?

  1. Find funding: Identify and secure funding sources for the LPM function, including reallocating existing resources and identifying new funding opportunities.
  2. Shift to stable yet iterative funding by value stream: Move away from traditional project-based funding and adopt a value stream-centric funding model that supports iterative planning and delivery.
  3. Build an operating structure: Establish a governance and operating structure for the LPM function, including decision-making processes, communication channels, and performance metrics.

How do you implement a Lean Workflow to establish LPM?

  1. Establish a Portfolio Kanban: Implement a Portfolio Kanban to visualize and manage work at the portfolio level, enabling better prioritization and resource allocation.
  2. Set up regular LPM events: Schedule regular events, such as strategy and investment reviews, to ensure ongoing alignment and communication within the organization.
  3. Implement a lean workflow: Adopt Lean principles and practices to streamline processes, eliminate waste, and improve the flow of value through the organization.

What shifts should you consider when implementing LPM?

  1. Shift to outcome-focused measurement: Focus on measuring outcomes rather than outputs to track progress and ensure alignment with strategic objectives.
  2. Shift to continuous flow and improvement: Embrace a continuous flow and improvement culture, regularly reviewing and refining processes for better results.
  3. Shift to less governance and more autonomy: Reduce bureaucratic governance and empower teams to make decisions and drive innovation.
  4. Shift to focus on customer value first: Prioritize initiatives and projects that deliver the most value, ensuring a customer-centric approach.

How do you overcome resistance to LPM adoption?

  • The Resistance of Leadership: Address any resistance from leadership by demonstrating the benefits of LPM, providing education on Lean principles, and highlighting successful LPM implementations in other organizations.
  • The Resistance of Middle Management: Overcome resistance from middle management by involving them in the LPM implementation process, providing training, and addressing their concerns about changes to roles and responsibilities.

What are the prerequisites for a successful LPM implementation?

  • Understanding of Lean principles: Ensure the organization’s leaders and teams have a solid understanding of Lean principles and practices.
  • Clear strategic vision: Develop and communicate a vision to guide the LPM implementation and align efforts across the organization.
  • Stakeholder alignment: Engage and align stakeholders at all levels of the organization to support the LPM implementation and ensure its success.
  • Data-driven decision-making: Adopt a data-driven approach to decision-making, using metrics and analytics to inform LPM processes and decisions.
  • Cross-functional collaboration: Foster a culture of cross-functional collaboration, breaking down silos and enabling teams to work together effectively.
  • Process standardization: Standardize processes and practices across the organization to ensure consistency, efficiency, and scalability.

How do you manage organizational change when implementing LPM?

What is an organizational change in the context of LPM?

Implementing Lean Portfolio Management (LPM) often requires significant organizational change, as it entails shifts in mindset, structure, and processes. These changes may include adopting new ways of thinking, reorganizing teams around value streams, and embracing Lean and Agile principles. It is essential to understand the impact of these changes and plan effectively for their successful implementation.

What is the role of change agents in an LPM implementation?

Change agents are crucial in leading the LPM implementation and guiding the organization through various stages of transformation. These individuals may include senior leaders, middle managers, or other influential figures who deeply understand LPM and its benefits. They are responsible for the following:

  1. Communicating the vision and benefits of LPM to stakeholders at all levels
  2. Engaging and motivating teams to embrace Lean and Agile practices
  3. Facilitating collaboration and cross-functional teamwork
  4. Monitoring progress and providing ongoing support throughout the transformation journey.

What are the key transformation stages in an LPM implementation?

The transformation process typically unfolds in stages, including:

  1. Awareness and alignment: Stakeholders become aware of the need for change and align around a shared vision for LPM.
  2. Preparation and planning: The organization develops a detailed plan for implementing LPM, including identifying change agents, defining roles and responsibilities, and establishing success criteria.
  3. Execution and adaptation: Teams begin to adopt LPM practices, iterating and adapting as they learn and gain experience.
  4. Consolidation and optimization: LPM processes and practices are refined and optimized to ensure long-term success and continuous improvement.

What is a change portfolio when implementing LPM?

A change portfolio is a valuable tool for outlining the initiatives and projects required to implement LPM within the organization. It provides a clear roadmap for change and helps to prioritize activities based on their impact and feasibility. Key components of a change portfolio include:

  1. A list of initiatives and projects aimed at implementing LPM
  2. A timeline for executing these initiatives and projects
  3. Resource requirements, including personnel, tools, and training iv. Dependencies and risks associated with each initiative or project

How do you measure the success of an LPM implementation?

Establishing metrics to measure success and track progress is also essential for ensuring the effectiveness of LPM implementation. These metrics may include:

  1. Time-to-market for new products or features
  2. Percentage of projects aligned with strategic objectives
  3. Resource utilization and efficiency
  4. Customer satisfaction and feedback

By regularly monitoring these metrics, organizations can gauge the impact of LPM adoption, make data-driven decisions, and continuously improve their LPM processes and practices.

How do you use continuous improvement to support an LPM implementation?

  • Add upgrades and clarity: Continuously improve LPM processes and practices by incorporating feedback, refining strategies, and enhancing communication.
  • Celebrate improvements: Recognize and celebrate the successes achieved through LPM implementation, fostering a positive culture and reinforcing the benefits of LPM adoption.

What is the SAFe framework, and how does it relate to LPM?

SAFe is a framework for scaling Agile principles across large organizations, with LPM as a component ensuring strategic alignment.

SAFe is a structured methodology that aids enterprises in applying Agile practices and principles at a larger scale. It creates a synchronized, collaborative environment that promotes alignment, transparency, and delivery across multiple teams. LPM, within this system, acts as the bridge that connects the strategic goals with the execution tasks. It ensures that all Agile teams’ efforts are directed towards fulfilling the strategic intent, maximizing value, and reducing waste.

SAFe Requirements Model Big PictureWhat are the SAFe configurations, and how are they relevant to LPM?

SAFe configurations are variations of the SAFe framework to suit different organizational needs, and all configurations incorporate PI Planning for alignment and synchronization.

SAFe configurations are adaptations of the SAFe framework designed to meet diverse organizational needs based on size, complexity, and specific business objectives. There are 4 SAFe configurations, and they are:

  1. Essential SAFe: This is the foundational level of the Scaled Agile Framework that provides the basic elements needed for teams to align on strategy, collaborate effectively, and deliver complex, multi-team solutions.
  2. Large Solution SAFe: This configuration extends Essential SAFe to address the challenges faced when multiple Agile Release Trains are needed to deliver large-scale solutions that typically involve coordinating multiple teams across an organization.
  3. Portfolio SAFe: This configuration adds strategic and portfolio management to the Essential SAFe configuration, providing a way to align enterprise strategy with portfolio execution and manage Lean-Agile budgeting, strategic direction, and investment funding.
  4. Full SAFe: The most comprehensive configuration, Full SAFe integrates all other configurations to provide a complete approach to delivering large, integrated solutions while coordinating multiple Agile Release Trains and managing portfolios at the enterprise level.

Regardless of the configuration, PI Planning remains a central event within SAFe. It allows teams to align their goals, understand dependencies, and create an achievable plan for the upcoming Planning Interval. It’s a shared experience, irrespective of the chosen SAFe configuration, and a fundamental mechanism to achieve alignment, synchronization, and delivery predictability across different levels of the organization.

What are the SAFe Core Competencies?

SAFe Core Competencies are a set of seven capabilities essential for achieving Business Agility.

SAFe Business Agility

The Scaled Agile Framework (SAFe) defines seven core competencies, and they are:

  1. Lean-Agile Leadership: Inspires adoption of Agile practices.
  2. Team and Technical Agility: Enhances team capabilities and technical skills.
  3. Agile Product Delivery: Delivers customer value through fast, integrated delivery cycles.
  4. Enterprise Solution Delivery: Manages large-scale, complex solutions.
  5. Lean Portfolio Management: Aligns strategy and execution.
  6. Organizational Agility: Enables quick, decentralized decision-making.
  7. Continuous Learning Culture: Encourages innovation and improvement.

These competencies provide a roadmap for organizations to navigate their transformation to Lean, Agile, and DevOps practices.

How does LPM support SAFe Core Competencies?

LPM supports SAFe Core Competencies by aligning strategic objectives with Agile execution and fostering a Lean-Agile culture.

By linking strategic goals with Agile execution, LPM supports Team and Technical Agility, Agile Product Delivery, and Enterprise Solution Delivery. LPM also fosters a Lean-Agile culture, supporting the Lean-Agile Leadership and Continuous Learning Culture competencies. By ensuring the efficient investment of resources in value-driven initiatives, LPM supports Organizational Agility by enabling the organization to respond swiftly to changes.

What is the role of LPM in modern organizations?

LPM’s role in modern organizations is to align strategic objectives with operational execution, ensuring resources are optimally invested.

In a more comprehensive view, LPM plays a pivotal function in current enterprises by synchronizing strategic goals with day-to-day operations. It’s a crucial instrument that allows organizations to allocate resources optimally, ensuring every decision and action aligns with the larger business strategy. LPM also promotes agility by aiding in the quick adjustment to market changes or shifts in strategic direction, maintaining a constant focus on delivering maximum value.

By prioritizing customer needs and fostering a culture of continuous improvement, LPM enables organizations to make better investment decisions, optimize resource allocation, and deliver value more efficiently and effectively.

What are the disadvantages of traditional portfolio management methods?

Traditional portfolio management methods lack flexibility and responsiveness and are less suitable for fast-paced, change-driven environments.

Conventional portfolio management methodologies have six distinct problems as follows:

  1. Conventional portfolio management methodologies are characterized by a rigid, top-down approach that lacks the agility necessary to respond to change quickly in a rapidly evolving business landscape.
  2. Classic Portfolio Management methodologies prioritize long-term and fixed budgets, restricting an organization’s ability to adapt to unexpected changes.
  3. Traditional Portfolio Management methods constrain an organization’s ability to capitalize on emerging opportunities.
  4. Portfolio Management compartmentalizes projects, missing out on the benefits of cross-functional collaboration and leveraging value streams.
  5. Traditional Lean Portfolio Management results in a misalignment between strategic objectives and execution.
  6. Conventional Portfolio methods result in sub-optimal resource allocation and
  7. Traditional Portfolio Management delivers diminished business value.

What are the differences between traditional Portfolio Management and Lean Portfolio Management?

The differences between traditional Portfolio Management and SAFe LPM can be mapped on seven specific dimensions: Planning and Budgeting, Scope and Business cases, Delivery and Governance, Risk Management, Team Structure and Organization, Communication, Customer Involvement, Metrics, and Funding.

The below table unpacks each dimension in more detail:

AspectTraditional Delivery ApproachLean Agile Approach
Planning and BudgetingBig up-front, top-down, long-term planning and budgeting with detailed business cases based on speculative ROIFlexible, iterative planning with lean budgets, guardrails, and participatory budgeting
Scope and Business CasesFixed scope defined upfront; overly detailed business casesAdaptive scope based on evolving requirements and customer feedback; lean business cases with MVP, business outcome hypothesis, agile forecasting, and estimation
Delivery and GovernanceLarge, infrequent releases; projects governed by phase gates and big milestonesSmall, frequent releases and continuous integration; products and services governed by self-managing value streams, objective measures, and milestones based on working solutions
Risk ManagementRisks are managed through detailed upfront planning and change controlRisks managed through continuous learning, adaptation, and short feedback loops
Team Structure and OrganizationPeople are organized in functional silos and hierarchical management, temporary project teams.People organized in value streams for continuous value flow; cross-functional, self-organizing teams with decentralized decision-making
CommunicationFormal, documented, and infrequentInformal, face-to-face, and continuous
Customer InvolvementLimited to initial requirements gathering and final acceptanceActive collaboration and ongoing feedback throughout the project
Performance Metrics and Progress MeasurementFocus on utilization, process compliance, documentation, and task completion.Focus on value delivery, customer satisfaction, team empowerment, and objective measures based on working solutions.
Funding and Work IntakeFund projects; centralized, unlimited work intake, project overload, and project cost accountingFund value streams; strategic demand managed by Portfolio Kanban; decentralized intake by value streams and value stream budgets adjusted dynamically.

What is the relationship between LPM and Agile and Lean Methodologies?

LPM is a bridge that connects Agile and Lean methodologies with organizational strategy and execution.

SAFe LPM integrates Agile and Lean principles into portfolio management. It facilitates the application of these methodologies at the enterprise level, aligning strategic goals with day-to-day operations. Agile and Lean methodologies foster flexibility, responsiveness, and efficiency, and LPM leverages these attributes to maximize value delivery, optimize resource utilization, and respond swiftly to changes in the business environment.

How does the Lean-Agile Mindset support LPM?

The Lean-Agile Mindset underpins LPM by promoting a culture of flexibility, continuous improvement, and value-centricity.

The Lean-Agile Mindset is a set of beliefs and practices that promote flexibility, adaptability, continuous improvement, and a relentless focus on delivering value. It acts as the cultural bedrock for LPM, emphasizing aligning strategy and execution, optimizing resources, and maximizing business value. This mindset encourages the organization to be nimble in responding to changes, to strive for improvement continually, and to ensure that all efforts are directed towards delivering the maximum possible value, which is all fundamental tenets of LPM.

SAFe Practices

What is the SAFe Requirements Model?

The SAFe Requirements Model combines Artefacts and activities that guide the creation of system solutions.

SAFe Requirements Model includes a combination of Artefacts – Epics, Capabilities, Features, and Stories, along with the corresponding activities necessary for defining and implementing a system. It’s a flexible model that can be adapted according to the needs of each organization. This model assists in breaking down large work items into manageable sizes, thus promoting incremental delivery.

What is PI Planning?

PI Planning represents a routine, face-to-face event where Agile Release Trains establish a plan for the upcoming Program Increment (PI).

Agile Release Train (ART) teams collaborate and align on a shared mission and vision in this event. PI Planning creates the framework for teams to understand their work in the broader context, set team and program PI objectives, and identify dependencies across teams. It involves two main parts: Day One focuses on business context, product vision, and team breakout sessions, while Day Two emphasizes draft plan reviews, management review, and problem-solving.

What is SAFe built-in Quality?

SAFe built-in Quality means integrating quality standards into every product increment, promoting high standards rather than fixing issues afterward.

Built-in Quality is one of the core values of SAFe and emphasizes prevention over cure. It encompasses flow, architecture and design quality, code quality, system quality, and release quality. Incorporating quality from the earliest stages of the development process reduces the cost of subsequent defects, promotes faster delivery times, and encourages frequent iterations.

What are SAFe Value Streams?

SAFe Value Streams identify the activities needed to deliver value to the customer through a product or service.

In SAFe, two types of value streams are identified: Operational and Development. Operational Value Streams are the steps that an organization uses to deliver the product or service to the customer. In contrast, Development Value Streams represent the organization’s steps to develop new products or services, underpinned by Agile Release Trains (ARTs).

What is SAFe Continuous Delivery?

SAFe Continuous Delivery refers to the development practice of always maintaining a releasable state of the product, enabling frequent and reliable releases.

SAFe’s continuous delivery pipeline consists of four aspects: Continuous Exploration, Continuous Integration, Continuous Deployment, and Release on Demand. Continuous Delivery allows teams to reduce the lead time of feature delivery, increase deployment frequency, enhance product quality, and heighten customer satisfaction by providing regular updates and improvements.

What are the SAFe Principles?

The SAFe Principles are a set of ten fundamental principles derived from Lean and Agile methodologies that guide the implementation of SAFe.

SAFe principles are guidelines derived from Agile practices and methods, Lean product development, and systems thinking to facilitate large-scale, complex software development projects. The ten principles that make up the SAFe framework are as follows:

  1. Take an economic view: This principle emphasizes the importance of making decisions within an economic context, considering trade-offs between risk, cost of delay, and various operational and development costs.
  2. Apply systems thinking: This principle encourages organizations to understand the interconnected nature of systems and components and prioritize optimizing the system as a whole rather than individual parts.
  3. Assume variability; preserve options: This principle highlights the importance of maintaining flexibility in design and requirements throughout the development cycle, allowing for adjustments based on empirical data to achieve optimal economic outcomes.
  4. Build incrementally with fast, integrated learning cycles: This principle advocates for incremental development in short iterations, which allows for rapid customer feedback and risk mitigation.
  5. Base milestones on an objective evaluation of working systems: This principle emphasizes the need for objective, regular evaluation of the solution throughout the development lifecycle, ensuring that investments yield an adequate return.
  6. Make value flow without interruptions: This principle focuses on making value delivery as smooth and uninterrupted as possible by understanding and managing the properties of a flow-based system.
  7. Apply cadence, and synchronize with cross-domain planning: This principle states that applying a predictable rhythm to development and coordinating across various domains can help manage uncertainty in the development process.
  8. Unlock the intrinsic motivation of knowledge workers: This principle advises against individual incentive compensation, which can foster internal competition, and instead encourages an environment of autonomy, purpose, and mutual influence.
  9. Decentralize decision-making: This principle emphasizes the benefits of decentralized decision-making for speeding up product development flow and enabling faster feedback. However, it also recognizes that some decisions require centralized, strategic decision-making.
  10. Organize around value: This principle advocates that organizations structure themselves around delivering value quickly in response to customer needs rather than adhering to outdated functional hierarchies.


  1. Scaled Agile Framework (SAFe): Lean Portfolio Management
  2. Scaled Agile Framework (SAFe): Lean Budgets
  3. Scaled Agile Framework (SAFe): Participatory Budgeting
  4. SAFe® 4.5 Reference Guide: Scaled Agile Framework® for Lean Enterprises by Knaster, R., & Leffingwell, D. (2018)
  5. Agile Software Requirements: Lean Requirements Practices for Teams, Programs, and the Enterprise by Leffingwell, D. (2020)
  6. Scaling Software Agility: Best Practices for Large Enterprises by Leffingwell, D. (2011)
  7. Large-Scale Scrum: More with LeSS by Larman, C., & Vodde, B. (2016)
  8. The Principles of Product Development Flow: Second Generation Lean Product Development by Reinertsen, D. G. (2009)
  9. Lean Software Development: An Agile Toolkit by Poppendieck, M., & Poppendieck, T. (2003)
  10. Implementing Lean Software Development: From Concept to Cash by Poppendieck, M., & Poppendieck, T. (2007)
  11. Management 3.0: Leading Agile Developers, Developing Agile Leaders by Appelo, J. (2011)
  12. Agile Estimating and Planning by Cohn, M. (2005)

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