Anchor new approaches in the culture.
—John Kotter

Enhance the Portfolio

This is article twelve in the SAFe^® Implementation Roadmap series. Click here to view the entire roadmap.

In the previous articles in the SAFe Implementation Roadmap series, we described the first eleven’ critical moves’ of the roadmap:

By this point in the journey through the SAFe implementation, a lot has been accomplished. Measurable benefits in time-to-market, quality, productivity, and employee engagement are being realized. The new ways of working are becoming second nature for those operating within the development value streams. For most organizations, the next best focus area for the transformation is to enhance and improve the effectiveness of the SAFe portfolios.

Details

In the last article, Launch More ARTs and Value Streams, we described how to drive and facilitate the broader implementation of SAFe. The expanding success story of these ARTs and development value streams creates a buzz in the organization about new and better ways of working. And yet, at this stage in the journey to business agility, there may be a growing sense that there are additional opportunities to maximize the full potential of SAFe to accelerate value delivery. In many cases, the focus shifts to the effectiveness of the portfolio. Leaders responsible for vision, strategy, funding, budgets, prioritization, and financial performance may be asking how they can apply the new ways of working to their roles.

One of the best ways to address these questions is to engage higher-level leaders with practical examples of how Lean-Agile practice patterns directly contribute to better business results and how extending those patterns into their areas of responsibility can further accelerate business agility. One example might describe how continuous communication and visibility of strategic initiatives can create better alignment between product development priorities and the business’s goals. Other insights could emphasize matching new feature demand to the capacity of the value streams to drive faster value delivery. Additional conversations could focus on applying Lean thinking to funding and governance practices to eliminate bottlenecks in the flow of value generated within the development value streams.

The remainder of this article provides guidance on how enhancing the portfolio can help leaders seize these opportunities and unlock the full potential of the new ways of working.

Adopt and Improve LPM practices

Every enterprise has portfolios of products and solutions, whether the practices of Lean portfolio management have been adopted or not. Early in the Implementation Roadmap, we recommended that the LACE train executives, managers, and leaders in basic SAFe concepts and specifically in how they can contribute to better value delivery by transitioning to Lean Portfolio Management (LPM). Adopting LPM helps organizations shift from traditional practices to a Lean-Agile approach, as shown in Figure 1.

Figure 1. Critical shifts in portfolio mindset and practice

These shifts expand the benefits of SAFe by extending the new ways of working to the highest levels of decision-making and financial accountability for the solutions and value streams in the portfolio. SAFe helps facilitate these shifts through the practices described in LPM.

Figure 2. The dimensions and activities of LPM

As illustrated in Figure 2, LPM provides guidance for:

Strategy & Investment Funding – ensures the entire portfolio is aligned and funded to create and maintain the solutions needed to meet business targets.
Agile Portfolio Operations – coordinates and supports decentralized ART execution and operational excellence.
Lean Governance – provides oversight and decision-making of spending, audit, compliance, forecasting expenses, and performance measurement.

Adopting LPM

For those organizations that have not yet adopted LPM, the best way to enhance the portfolio is to start the LPM adoption process! Scaled Agile provides extensive training and guidance for launching LPM, built from success patterns emerging from the field. These assets include:

LPM training – The two-day LPM course helps portfolio leaders understand LPM practices and how they differ from traditional approaches.
Getting Started with LPM workshop – This one-day workshop helps the team of change agents who will guide the LPM implementation to begin the practical planning for launching LPM within the organization’s context.
LPM Adoption Roadmap – This set of practical online ‘how to’ resources compiled by a large team of experienced LPM practitioners gives the implementation team the critical tools and best practices to guide the organization’s adoption of LPM. Figure 3 summarizes this guidance:

Figure 3. LPM Adoption Roadmap

While training and field-tested guidance are essential, the most critical success factor for adopting LPM is for leaders with portfolio responsibilities to fully engage in the change process and incorporate LPM practices into their individual roles.

Improving existing LPM implementations

For organizations that began their LPM adoption earlier in the implementation roadmap, there are additional opportunities for further growth to realize all the benefits of Lean portfolios.

In the spirit of SAFe’s core value of ‘relentless improvement,’ the next best action to enhance the portfolio is to begin a focused and deliberate journey to:

evaluate the health of existing portfolios,
identify the areas of greatest opportunity for improvement, then
devote the people and resources required to implement the most valuable enhancements.

The critical moves to relentlessly improve portfolios include:

Use the LPM competency assessment – The LPM competency assessment consists of approximately 50 statements describing the best practices for strategy and investment funding, Agile portfolio operations, and Lean governance. Identify the right stakeholders with the knowledge of these practices in your organization, conduct the assessments, analyze the results, and then prioritize the list of potential improvements. (Refer to the enhanced guidance article Facilitating SAFe Assessments for detailed instructions.)
Engage stakeholders for each improvement – Some areas of improvement may need the support of stakeholders who have not been engaged in LPM and may not fully understand or be on board with needed changes to legacy practices. LPM advocates must invest the time required to identify these stakeholders, cultivate positive connections, socialize the assessment findings and recommendations, and build urgency and buy-in for change.
Add improvement items to appropriate backlogs and prioritize – Improvement requires real work and real capacity from the stakeholders with authority to evolve legacy systems, policies, practices, and roles. Adding improvement work to the backlogs where the work is needed provides visibility, builds alignment, and helps balance competing priorities. As a result, the work to enhance the portfolio will follow a Plan-Do-Check-Adjust cycle like any other work in a Lean-Agile enterprise.

Optimize Portfolio Flow

The central aim of SAFe is to facilitate the continuous flow of value to customers in the sustainably shortest lead time. This emphasis on flow has been exponentially enhanced in the most current version of the Framework. While SAFe has always focused on flow, the importance of flow at the portfolio level and the corresponding practices may have been less obvious. With the deeper discussion of the eight flow accelerators in Principle #6 and the new Portfolio Flow article introduced in SAFe 6.0, the ways to achieve a continuous flow of value through the portfolio are explicit and actionable.

Why is it important to focus on the flow of value through the portfolio when the actual work of solution building occurs in Agile teams and trains? Portfolios connect the enterprise’s strategy to the execution of value creation by aligning the vision, Lean budgets, value stream organization, and epic priorities with the larger aims of the business. However, if:

epics moving through the portfolio encounter bottlenecks
the portfolio takes on too much WIP, exceeding the capacity of its value streams
portfolio leaders continue to apply legacy waterfall governance policies to Agile development
shifts in solution strategy are not validated with customers through fast feedback

…then, these interruptions to portfolio flow will negatively impact the teams and trains responsible for building the portfolio’s solutions. Conversely, when the LPM practices described in the previous section are expertly applied, and the specific tactics of Portfolio Flow are put into practice, value can move smoothly from the formation of enterprise strategy to the delivery to the market of the solutions that enable that strategy.

The Portfolio Flow article describes why each of the eight flow accelerators in Principle #6 is important to flow at the portfolio level and provides specific practical ‘how to’ recommendations for implementing each accelerator. So, the next most important focus for enhancing the portfolio is to understand and implement the practices of portfolio flow that can provide the most significant and most immediate improvements to flow.

But where should a portfolio’s leaders begin? Here is a simple but effective series of steps to get started.

Capture data on current portfolio flow. Start by measuring the flow time of epics through the portfolio Kanban. Understanding average flow time is a good beginning, but dive deeper to understand the value stream map and where delays are occurring. Basing improvements on empirical data and analysis will help build support for changes necessary to improve flow.
Connect challenges to portfolio flow with impacts on teams and ARTs. Delays in flow at the portfolio will have greater urgency for improvement when the negative implications to teams and trains are clearly identified.
Create backlog items for portfolio improvement work. Capturing improvement work in backlogs improves visibility, prioritization, alignment, and capacity planning.
Measure and re-assess. As backlog items to improve portfolio flow are completed, periodically re-assess portfolio flow to determine if the improvements have created measurable increases in flow.

Reorganize Around Value

Early in the Implementation Roadmap, work was done to identify value streams and organize ARTs around the flow of value. This work informed the subsequent steps in the roadmap to launch one or more ARTs.

Over time organizations may find that those early decisions on organizing around value are not working as well as they did at the beginning of the transformation. Things have changed since the initial value streams were configured:

Solutions have evolved
Markets have evolved
Agile teams and ARTs have matured
New ARTs have been launched
New technologies have been introduced
Analysis of value flow has revealed bottlenecks

Organizational Agility (one of the seven core competencies of business agility) is the ability to recognize when things have shifted and a willingness to make adjustments to maintain an optimal flow of value. Value stream configurations need to be evaluated and, if required, reconfigured using the process described in Organize Around Value to better enable smooth and continuous portfolio flow.

Ideally, adjustments to value streams can be implemented by simply adjusting team backlogs to support the reconfigured value streams. If needed, entire teams can be allocated to different ARTs. As a last resort, make changes to the composition of individual teams only if absolutely necessary to preserve the cohesiveness of high-performing teams.

Moving Forward

By now, substantial business benefits are growing daily. Improvements in quality, productivity, time-to-market, and employee engagement are meeting or exceeding expectations. So how do you sustain this over the long term? This is the subject of the next critical move: Accelerate.

This article serves as a launching pad to explore these steps in detail and understand how to apply them to specific implementations.

Previous: Launch More ARTs and Value Streams

Next: Accelerate

Additional Resources

SAFe LPM Course – This is a two-day, interactive course that teaches the practical tools and techniques necessary to implement Strategy and Investment Funding, Agile Portfolio Operations, and Lean Governance. An additional one-day workshop is available to help enterprise teams get started with LPM in their organization.

SAFe LPM Execution Toolkit – This toolkit provides templates, tools, and other assets to support the ongoing operation of the LPM function.

Last update: 30 January 2023