Responding To Accelerating Change: Adopt Lean Portfolio Management for Survival

[Fred Champlain]

Two recent reports recently released by Accenture highlight an unprecedented and rapid shift in the rate of change that businesses are facing driven foremost by GenAI disruption.

GenAI opportunities and challenges are putting businesses under more pressure to innovate, transform and reinvent themselves to maintain their competitive advantages for sustainable growth. 

The Accenture Pulse of Change: 2024 Index C-suite survey found that 78% of executives perceive an accelerated rate of change in their industries, with 65% anticipating further acceleration in 2024.   Over the past four years the same survey found an accumulative increase in change of 183%, attributed to six broad factors: technology, talent, climate, economic, geopolitical, and consumer & social trends.  

In Reinventing With A Digital Core, Accenture notes that “expectations for gen AI are exceeding their current digital core capabilities” and suggests a three pil lar model to tackling this acceleration of change:

• Build An Industry-Leading Digital Core
• Boost Innovation Investments
• Balance Technical Debt Liabilities

Higher performing companies have found that the adoption of Lean Portfolio Management (LPM) is essential to their business agility success.

Lean Portfolio Management (LPM) is an approach for managing portfolios that is focused on dynamically funding prioritized initiatives that results in maximizing value delivery to customers and enabling faster decisions.

While LPM is frequently associated with SAFe due to the extensive amount of guidance that SAFe provides regarding portfolio management, the concepts of LPM are independent of SAFe and can be used successfully regardless of agile methods or scaling approaches being used in an organization.

LPM is comprised of several practices that together are at the heart of the sustainable business agility needed to meet the challenges and leverage the opportunities that GenAI brings:

Aligning Execution to Strategy - To thrive in this environment, organizations need an approach that aligns business strategy with execution.  Analyzing and prioritizing investment opportunities continuously provides the LPM cadence.   OKRs and KPIs are used to continuously monitor the performance and outcomes of the portfolio, providing opportunities to adjust funding dynamically as needed for optimizing the portfolio for value. 

Leveraging Lightweight Business Cases (LBCs) - Epics are used in LPM to capture and define the work to be done in a portfolio.  To prioritize funding of Epics, the portfolio must understand the investment needed to fund the resources and teams needed to accomplish the work.   A LBC is typically a one-page view adapted from the well-known Business Model Canvas.

Aligning to Value - Value stream alignment is a key consideration in structuring team topologies of portfolios.  This alignment guides investments to align with customer experiences as well as aligns resources to value.  For organizations shifting to a product-centric strategy, value stream alignment is paramount.

Agile Portfolio Operations - Operating a portfolio using lean and agile practices is essential to successful LPM to coordinate across value streams and to provide continuous funding using the Lean Startup Cycle as a guide to pivot, persevere, or stop investments in Epics, based on whether expected outcomes are met.  Integrated risk management across a portfolio to the enterprise provides broader visibility.

Lean Governance - LPM emphasizes decentralized decision-making, guardrails, lightweight processes, and continuous improvement. This includes managing a portfolio kanban system to visualize and manage the flow of Epics from funnel stage to completion, as well as involving all key stakeholders in funding decisions.

Architecture Runway - Enterprise Architecture is a key element of LPM, to ensure the coordination of investment in technical enablers, to identify complex dependencies, and manage technical debt.  Enterprise Architects are a key stakeholder in LPM, as a peer to business stakeholders and product managers.

Lean Portfolio Management provides a robust approach for enhancing enterprise agility, enabling organizations to thrive amidst constant change.  

ServiceNow Strategic Portfolio Management, Enterprise Agile Planning, Enterprise Architecture, and ServiceNow GenAI support the implementation of Lean Portfolio Management.  By adopting ServiceNow for your LPM, you gain the advantage of leveraging ServiceNow GenAI to accelerate your organization’s AI strategy and execution with an unparalleled end-to-end breadth spanning from strategic initiative to execution to operations to value delivery.