Leveraging Agile Principles for Portfolio Management – Guiding Principle #1
Agile work methodologies have reshaped the way that project management offices (PMOs) deliver results to their organizations. With that track record, it’s no surprise that the next great frontier for many businesses is how to apply those Agile principles at the portfolio level, to enhance strategic decision-making, improve overall performance and deliver greater value both internally and externally.
However, if Agile is the best way to approach portfolio management, is there also a “best way” to approach implementing Agile Portfolio Management in your PMO? In a word, yes – and it starts by applying one of the key principles that has long benefitted product development teams, to your projects.
The Strategy: Deliver products, not projects.
You’ll hear this phrase a lot in project management spheres these days, and it’s probably a little unclear exactly what it means. After all, isn’t it the job of a PMO to deliver projects? It’s easy to see why there’s so much confusion. When we talk about delivering products versus projects, we’re not dumping projects into the trash bin — far from it. What we’re really describing is a shift in thinking and execution during the portfolio management process.
The Agile product delivery model was developed by the software industry to stay competitive, offer superior customer value and keep up with the speed of change in technology. In the world of software development, a rigid adherence to a set plan and timeline meant that you would likely deliver your product on time and within budget … but it would already be obsolete and useless to customers. There’s a famous quote from the 1944 western film Call of the Rockies that sums this concept up perfectly: “The operation was a success, but the patient died.”
With a product delivery strategy, your portfolio manager can use the iterative nature of an Agile methodology to shift goals, make changes, increase or divert investments and make improvements, all with the end goal of delivering more value to customers or stakeholders – those who stand to gain from the outcomes. They measure progress with milestones instead of task lists and the route to the finish can follow more than one path depending upon data and feedback. This may not be the best route for every project, but those that are more strategic or exploratory in nature will find this to be a better way to achieve the desired result.
Making the Shift
A quick analogy I like to use to bring clarity to project delivery versus product delivery is to compare it to buying a house versus owning a house. When you decide to purchase a home, you have a basic list of tasks to accomplish against a timeline that fits your needs. You find a realtor, secure funding, create a list of basic wants, house hunt, complete inspections and appraisals, close on the loan and accept the keys. After you check all of these off the list, you’ve achieved a project manager’s governance dream: completing a project, on time, in scope and under budget. You have a home.
The ownership of that home, however, is a whole different process. You, the homeowner, start living a product delivery model from the day you move in, even if you never considered it that way. Think about it. Every home requires upgrades and maintenance. You add or remove carpet. You paint. You landscape. You buy new furniture. And that’s just the fun stuff! Chances are you will also discover that the upstairs toilet leaks and needs to be replaced. The kitchen you loved so much during the walkthroughs is actually a bit too small and needs to be expanded. Your basement floods when it rains. The back fence falls down when it’s windy. These are all changes to your home you will have to make on the fly to keep it livable while you are in it and protect and enhance its value as an asset — and asset is the key word here. At the end of the day, your home sweet home is a product that you can sell, rent, or borrow against. That means you have to work to constantly refine and perfect it the entire time you live in it if you want it to deliver the most value.
The simplified analogy above illustrates the limitations of a project delivery strategy. Project delivery is finite. It ends when the project does. This inhibits the ability of your PMO to grow value and make improvements or even to achieve the best outcome with limited scope and vision. Of course, we like to finish a project and move on to the next, but in order to see real value from investment, there must be a plan for continued maintenance and upgrade to protect the benefits. Otherwise opportunities are lost despite the appearance of success. Alternatively, product delivery, by its very nature, is meant to adapt, grow and innovate with the end goal of customer satisfaction and better return on investment. By embracing this key strategy as part of your agile methodology, you’ll empower your PMO for success.
For more ways to leverage Agile Portfolio Management, check back for the next article, where I break down guiding principle #2: Centralize Project Portfolio Management Regardless of Methodology. As always, you can visit our website to learn more.