Portfolio management implementation

The core of the portfolio management function is that the connection is made between strategy and execution. Many organizations are currently working on improving their portfolio management function, an improvement that is increasingly inspired by the need to be more agile. My colleague Rini van Solingen has written a book together with Henny Portman about what Agile portfolio management is. This series of blogs is not about the what, but about implementing and improving Agile Portfolio Management. I have written a guide about this together with Rini, inspired by the Scrum guide and our practical experiences. You can find this guide here. find.

Scrum and portfolio management

The challenge of more agile execution has led to the formation of Agile teams and Agile teams-of-teams in organizations over the past 15 years. Many organizations started bottom-up, with the teams on the work floor, and have now arrived 'at the top'. Organizations are also working on becoming more agile there, in that 'thin air'. The question you can ask is 'what can we learn from the introduction of the Scrum framework at team level that we can reuse when introducing agility at portfolio level?'

Question 1. Is it possible? What are the similarities and differences between Agile delivery and agile Portfolio management?

In the Scrum guide, Scrum teams work on a 'product'. You could say that Agile portfolio management does not focus on products, but on a function, namely governance. What do you optimize as a Portfolio team? However, there are approaches that identify products as part of governance, e.g. the management products of Prince2. If you view a Portfolio backlog as a product, you can also use an increment and a DoD for this backlog, just like with a Scrum team.

Scrum teams recognize a product goal. Value is added to the product in increments on the way to the long-term goal. Agile portfolio management also recognizes a long-term goal that is worked towards in steps. Scrum teams use an empirical method (transparency, inspection and adaptation) and use feedback loops to adjust towards optimal value. The analogy with portfolio management does not stop there…

…Because Agile portfolio management teams also work iteratively and incrementally. Scrum teams work in complex environments with relatively many uncertainties. For the sake of risk management and to optimize predictability, they work iteratively and incrementally. If scrum teams in an organization already work in a context with relatively many uncertainties during production, then this certainly also applies to the portfolio management function. Management and production cannot be viewed separately. The portfolio management function also benefits from iterative and incremental work. Finally, it is not only Scrum teams that work in a cadence, a sprint. Agile management is also tackled cyclically, for example a practice such as a QBR is carried out quarterly in many organizations.

Figure 1 Agile Portfolio Management in Scrum Framework

Question 2. What are the benefits of looking at Portfolio management function from a Scrum framework perspective?

Scrum teams assume shared ownership, collective responsibility for team results. This is not the case with the Portfolio Management function. Portfolio boards often have directors who represent different components, supported by a portfolio manager who prepares meetings and is the bridge to the execution after the Portfolio board meeting. Directors do not necessarily have to pull the same string.

In the context of uncertainty, wouldn’t Portfolio boards be better off as goal-oriented Portfolio teams like Scrum teams, where team members commit to a common long-term goal? With specialty roles in those portfolio teams, such as a portfolio owner (Product owner) who is ultimately responsible for the Portfolio result, a team member who optimizes the portfolio process (SM) and, for example, an architect who contributes from a technical perspective?

Perhaps even more importantly, we know that credibility is a key component of leadership.

Wouldn't it contribute to the credibility of leaders if they showed that their management function is also shaped iteratively and incrementally in a similar way as in scrum teams? That they adapt along the same lines as they asked delivery teams to adapt to a new context? Or that they show that they steer on the quality of management processes, in the same way as they ask scrum teams. That they use feedback from their stakeholders (e.g. the scrum teams), just as scrum teams do? That they show that they want and can learn from the steps that have already been taken by Scrum teams at an earlier stage? That Portfolio owners also join a product owner guild of their own organization to learn about their own role?

Practice what you preach, Portfolio directors!