SAFe Participatory Budgeting (PB) is a powerful tool that Lean Portfolio leaders use to allocate portfolio budgets to value streams. Since its addition to the Framework in SAFe 5.0, PB has helped enterprises make better decisions on billions of dollars in portfolio investments.
One of the common assumptions of PB is that the money being used to fund value streams and Epics is free of any constraints in how this money is allocated and that the portfolio team can reallocate money as desired.
However, there are many applications of PB in portfolios that have specific funding allocation constraints. For example, Government organizations often have particular funding ‘earmarks” that require the finding to be applied to a specific initiative. Non-Governmental Organizations (NGO) operating across many countries may have legal constraints that require money raised for a philanthropic purpose in one country to be spent only on projects within that country (a geographic constraint). In a similar manner, for-profit enterprises with different legal entities within the same portfolio may be structurally constrained to only fund Epics by each legal entity (no pooling of funds) as opposed to having Epics funded by multiple entities (a legal entity constraint). In other words, there are often ‘strings attached’ that govern what the money can be used for,
The unfortunate consequence of assuming that PB is free of any constraints in the allocation of funds is that some enterprises avoid using PB, depriving them of the benefits of PB.
In this brand-new Community Contribution, SAFe Fellow Luke Hohmann (Chief Innovation Officer at Applied Frameworks, Inc.) and SPCT Nikolaos Kaintantzis (Enterprise Agile-Coach & SPCT, Kegon AG) describe how PB forums can be designed to accommodate a variety of common constraints, expanding the use of PB within and across enterprises. These improvements can increase alignment, portfolio flow, and create new opportunities for enterprises to fund the most important Epics.
Understanding the potential constraints that can influence a PB event can also help to steer practitioners away from various misuses, dysfunctions, and misconceptions about LPM and PB. Many of these myths and challenges are also described in this article.
We’re excited that Participatory Budgeting continues to evolve and become a mainstay of strategic funding. This article will help advance that cause.
Thanks to Luke and Niko for this special contribution. They wanted me to be sure and note that it was a broad collaborative process. Specifically, Brian Tucker, Simon Chesney, Adam Mattis, Thorsten Janning, Deema Dajani, and the SAFe Framework Team all contributed to or reviewed the work.
– Dean Leffingwell and the Framework Team