Lean Portfolio Management Blog Series Part 2: Strategic Alignment

Strategies for shifting from “imitation LPM” to “real LPM.”

In the previous installment of this blog series we provided an overview of the signs of imitation Lean Portfolio Management (LPM). In this state, organizations have implemented the processes of LPM but have not challenged and changed the underlying organizational assumptions that Real LPM needs to be successful.

In this blog, we’ll explore the first signs that show up in the strategy sphere.

LPM Assumptions Around Strategy

Real LPM assumes that organizations create strategies focused on delivering products and services to customers and that the entire organization is aligned to accomplish that strategy.

In organizations practicing real LPM you’ll see the following:

Strategic alignment through all organizational units from top to bottom

All the mid-levels echo the strategy that emerges from the most senior level. A mid-level director, for example, may describe their strategy as a child of the senior-level strategy. They may have a visual that shows how the strategies are connected. They show that picture, talk about the strategy, and make sure that their teams understand the ‘why’ behind it.

Imitation LPM becomes apparent when trying to see the connection between senior and mid-level strategies. When the strategy doesn’t connect, when there’s no clear path between the highest level and the mid-levels, that’s an indicator that your leadership team is not aligned. It means that one level is saying ‘stop’ to your teams, and another is saying ‘go.’ It is the opposite of the frictionless, smooth flow of direction that is needed to set up a frictionless, smooth flow of value, the promise of LPM.

An active discussion point, pivot point, decision point built into day-to-day processes

Here strategy becomes an active discussion, where you invite people to discuss, question, and suggest changes consistently. This consistency reflects itself in cadenced meetings where stakeholders discuss and constantly reevaluate work against it. You’ll recognize this in companies that always prioritize based on strategy, where strategy can shift from quarter to quarter without massive freakout of teams or disruption to processes. In those companies, a culture of questioning, asking, and pivoting prevails and is accepted.

An imitation of this is when the strategy is communicated once or twice, say at a corporate town hall, but never discussed again. The feedback loop from delivery to leadership is non-existent, and open discussion or questioning of the strategy is discouraged. A lean business case for an initiative may exist, but usually, it’s on PowerPoint or Excel and siloed with a ‘need to know’ mentality to making it publicly visible. Without the mechanisms to make strategy alive and active, it tends to be forgotten and die a 2D (on paper) death.

A key driver for all work in the organization

This is what we call ‘building strategy muscle memory.’ A living, breathing strategy becomes apparent in the approval and management of work. It shows up in systems, where all work must visibly establish its connection to strategy. It shows up in approval mechanisms, where work must elaborate on how it meets a strategic goal before it’s approved. And it shows up in how people think of their work. You may have people start to question performing any work that doesn’t clearly connect to the strategy. This means that strategy drives communication muscles, process muscles, approval muscles, and cultural muscles.

In organizations struggling to implement LPM, we often find that the approval and management of work are unrelated to strategy. The authority and will of an individual who wants something done can become the sole impetus for assigned work. You are also likely to find busy teams at work that consume all their time, but none of the work is essential or even relevant to the strategy.

Testable with highly public visible measures

Finally, LPM assumes that you both have a strategy and can prove that it’s working. Sound strategies have measurable results. Those measures will be leading indicators that can show positive progress before all the work is done. The measures will be well known to everyone working on the strategy.

An excellent example of this is GitLab’s Category Maturity score. GitLab has a goal that at least half of their products are so functional (mature) that customers love them — they call the highest stage of CM ‘lovable maturity.’ They base the concept on science and simple customer surveys consistently used throughout the product development lifecycle. In other words, GitLab has built testing for the measure into the immediate feedback of products. And all this is public for all of us to see.

A sure sign of imitation LPM is a strategy with no way to prove itself. There may be measures in place, but the measures, when examined, are not testable or are siloed on a SharePoint site where most people remain unaware of their existence.

The Least Amount You Can Do

When we think ‘lean,’ we are thinking about the least amount of work we can do for the most significant impact. When it comes to very large initiatives, most of us don’t ask ourselves, ‘how can we make this smaller?’ This is because we know, as initiative creators, that to get the approval to do something big, we have to justify the cost before we build something. This means we have to put in a lot of time and effort in an approval process and develop estimates for work that could be a year or two out.

But lean thinking asks you to do the opposite. It asks you to consider how you can quickly build something and then test it right away to see if what you’ve built is doing precisely what you expected. Then, and only then, do you continue to move forward and spend more money to scale the solution.

Taking the Exits

Lean thinking also allows you to stop. In traditional product management, we would get a pot of money to do something, and we had to spend that pot and continue to deliver the thing, even when everything changed. Lean has built-in mechanisms along the route from inception to completion that allow you to exit if what you’re doing no longer makes sense. For example, in SAFe, practitioners constantly re-evaluate priority, and then, even when you’ve started the work, SAFe asks you to consider pivoting into something new. In other words, lean thinking prioritizes the actual value delivery of sunk cost.

But We are Doing All the Things

Many organizations have set up process structures that look like LPM. They have a portfolio kanban with clearly defined exit states. They do monthly portfolio reviews. Then even have lean business cases. But within those structures, they are moving long, massive, and expensive initiatives through very slowly. This is because they are doing lean but not thinking lean.

Dive Deeper

In our webinar series on LPM, we explore these topics and touch on real-world examples of companies that are shifting from imitation LPM to real LPM. We invite you to take a look and continue to engage with us on this important topic.

Read the next blog in this series: Lean Portfolio Management Organizing for Value – LPM Blog Series Part 3 >>

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Michiko Quinones, Jira Align Consultant
Michiko Quinones, Jira Align Consultant
[email protected]