Definition
Understanding Lean Portfolio Management
Lean Portfolio Management (LPM) is a contemporary approach to managing project portfolios that aligns strategy with execution while optimizing resources. It’s deeply rooted in Agile and Lean principles, focusing on delivering value in the shortest sustainable lead time.
Key Aspects of LPM
- Strategy and Investment Funding: LPM links strategy to execution by allocating resources to the most valuable work.
- Agile Portfolio Operations: This involves the coordination of Agile delivery and support for decentralized program execution.
- Lean Governance: It provides necessary oversight and decision-making support without stifling innovation.
Advanced Aspects of LPM
LPM is not just about managing projects; it’s about managing value streams. It requires a shift in mindset from traditional project management approaches. LPM leverages metrics that matter, focusing on outcomes rather than outputs. It also emphasizes a culture of innovation, learning, and continuous improvement.
Usage Examples
- A software development company uses LPM to align their product development with strategic objectives, ensuring resources are allocated to high-value features.
- An enterprise adopts LPM to manage its portfolio of initiatives, providing transparency and enabling better decision-making.
- A startup uses LPM to continuously pivot and adapt their product roadmap based on validated learning and customer feedback.
Historical Context
The concept of Lean Portfolio Management emerged from the Lean and Agile movements, which sought to improve efficiency and adaptability in software development and beyond. It represents a shift away from traditional project management towards a more value-centric, flexible approach.
Misconceptions
- LPM is not just for software development; it can be applied in any industry or organization seeking to optimize their portfolio of initiatives.
- LPM is not just about doing projects faster or cheaper; it’s about delivering value and aligning execution with strategy.
Comparisons
- Unlike traditional project portfolio management, LPM focuses on value streams rather than projects.
- Unlike Waterfall methodologies, LPM embraces change and supports iterative development.
Related Concepts
- Value Stream
- Agile
- Lean
- Program Increment
- Product Increment
- Kanban
