Traditionally, we have had projects as our investment vehicle. Once a project has been approved, we appoint a Project Manager and hand everything over to them. We give them a big bag of money and send them off to recruit the people they need to do the work (or at least the next phase) creating a new temporary team that will hand everything over to other teams when the project is finished.

This is true whether the work involves creating a new product or evolving an existing one. This is true even if the money has already been committed to funding people we already employ. This is true whether or not the Project Manager believes in or is passionate about the work at hand. This is true whether or not the Project Manager will actually be able to spend the money.

With Lean Portfolio Management, we pivot way from investing in projects and start investing in the people we have and the products they produce. We provide the funding and the challenge, and then let them self-organize. This reduces the number of handovers and avoids project start-up and many other delays inherent in the traditional approach. It means that we can look at recruitment and personal development as a long-term strategy and build the teams we need for long-term rather than short-term success.

This also allows the people involved to have long-term ownership of the products that they produce and long-term relationships with their customers. The teams that conceive a product build it, test it, deploy it, support it, and evolve it for its entire life. This continuity improves the alignment between the business and the teams providing the products that they rely on, improves quality, and helps us optimize the production system as a whole.

So, we allocate the money to the people and the products that will deliver the value that will make our portfolio profitable (the combination of which is often called a Value Stream) rather than to the specific pieces of work that we intend to do (the projects).

This is a major trend throughout the IT industry, where more and more organizations are moving away from projects and adopting a more product-oriented approach.

We do this to deliver the maximum value to our customers in the shortest sustainable lead time.

As we are now investing in products and people, and working experimentally with frequent deployments and releases, the traditional project phase gates that drive our workflows and define our intermediate success are no longer applicable.

We will focus on customer value and business outcomes to define our workflows and our success, moving away from a predictive sign-off based culture. We will still have the milestones we need to govern our investments, but these will be based on business achievements rather than document production.

This will give us more relevant products and lead to happier customers. By adjusting what we deliver based on customer feedback and customer outcomes, rather than on documents written many, many months, if not years ago, we will get better results.

Wrap Up

Hopefully, you can already see many of the differences between the traditional and lean approaches to portfolio management, as well as many of the benefits of adopting a leaner approach.

In blog part 2 we wrap up our jargon-free comparison by looking at why you should:

1. Stop being afraid of failure
2. Use transparency to enable faster decision-making
3. Let people focus and own their products

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