lean portfolio management - agilityhealth...day 2: portfolio alignment. ‐ portfolio investment...
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Lean Portfolio Management
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Lean Portfolio Management Is…
Clarity on strategic intent & themes and alignment to outcomes at every level. Quarterly
planning cadence focused on delivering outcomes over deliverables.
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Lean Portfolio Management Principles
Align to Outcomes
Shift to Strategy
Move Decision Making Down
Limit WIP
Plan with Visual Artifacts
Quarterly Planning Cadence
Focus on Customer Value
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Lean Portfolio Management - Recommendations
1. Form the right Lean Portfolio Mgmt. Teams• Gain clarity on roles, decision rights and expectations
2. Move planning from Outputs to Outcome focus• Empower Teams to figure out the ‘HOW’, communicate the What/Why and
acceptance criteria3. Shift to quarterly collaborative face to face planning
• Move away from any automated intake process at the portfolio level4. Make outcomes visible, align to them and check-in on
progress at all levels
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Minimize Outputs & Maximize Outcomes
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Outcomes vs OutputObjective: Create an Awesome Customer Experience
Key Results: • Improve Net Promoter Score from X to Y. • Increase Repurchase Rate from X to Y. • Maintain Customer Acquisition Cost under Y• Improve page load times to less than 2 sec
Output:• Launch capability XYZ to market. • Redesign the customer journey. • Complete top 5 features requested.
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Align Through the Levels
Team Outcomes
& Goals
< 3 MonthsTeam
Capacity User Stories
< Iteration Iteration Outcomes & Performance
Team Growth Items
Team
of
Team
s
Quarterly Outcomes
3 MonthsTeam of Teams
Capacity Features
1 ‐ 3 Months Team of Teams Outcomes & Performance
Team of Teams Growth Items
Portfolio
1 Year Outcomes
< 1 Yr.
Investment Epics and Capabilities
3 – 12 Months Portfolio Outcomes & Performance
Portfolio Growth Items
Enterprise
3 Year Outcomes
3 Yrs. KPIs & Enterprise
PerformanceBudget Portfolio
Business Plan
1 Yr.Enterprise
Growth Items
Strategy Funding Work Results
Roll‐up and Remove Obstacles
Align and Achieve Outcomes
GrowthToday we
create 3 year strategy then focus all our efforts on ‘Work’
alignment. In the future, we need to shift focus to ‘Strategy’ alignment
and delivering outcomes
over output.
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Enterprise: 3-Year Outcomes (Strategic Intent)
• 3 to 5 high-level statements: the essence of winning• Speaks to “The Why”• Stable over time: 3 years out• Drives focus and alignment to strategy
Stretch targets that move the organization to compete in innovative ways
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3-Year Outcome: ExampleOutcome:
Hypothesis:
We Know we succeed when:
• Increased Market Share• Higher return on investment• Increased customer sentiment that we are a product leader in the small business
market
Modernize and innovate on our Small Business Insurance Products
We believe that modernizing and innovating our small business insurance products will allow us to be more competitive and become an emerging leader in this market
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Portfolio: 1-Year Outcomes
• 3 to 5 most important differentiators• Captures success measures as key results• Key results can be attained within a year• Drives effort and commitment to strategy
Portfolio’s Outcomes to achieve in the next year that align back to the 3 Year Outcomes
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1-Year Outcome: ExampleTitle:
Hypothesis:
Key Results / Metrics:
Title Progress Metric Now Target Team of Teams
Increase SMB membership
Active Members
30K 60k SMB Sales
Maintain Conversion Rate
Activation 72% 72% SMB Delivery
Quote applications for new products
Quotes 0 45K SMB Marketing
Overall Progress:
Customer/org Impact metric
New & Compelling Non‐medical SMB products
We believe that by launching new SMB non‐medical benefits insurance products to the market we will increase our market share for small business members.
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Team of Teams: Quarterly Outcomes
• Each outcome should: • Be clearly stated•Have measurable results• Be able to be completed in a quarter
Team of Teams’ Outcomes to achieve in the next quarter that align back to the Annual Outcomes
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Quarterly Outcome: ExampleTitle:
Hypothesis:
Key Results / Metrics:
Title Progress Metric Now Target Team of Teams
Increase SMB membership
Active Members
30K 37k SMB Sales
Maintain Conversion Rate
Activation 72% 72% SMB Delivery
Quote applications for vision insurance
Quotes 0 12K SMB Marketing
Overall Progress:
Customer/org Impact metric
“Got to Have it” Small Business Vision Insurance Product
We believe that by launching a modern and innovative SMB vision insurance product to the market we will increase our market share for small business members.
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Guidance for Writing Effective Outcomes
Created by Intel’s Andy Grove, made popular by ‘John Doerr at Google
Objectives & Key Results (OKRs)Hypothesis Statements
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Types of Key Results IMPACT/LAGGING
Measure the Business or Customer results you aim to achieve, may take more than
a quarter to measure.
LEADINGMetrics we have control over that we can measure within the quarter/PI to validate we’re on track.
BALANCINGGuardrail metrics defined to protect against unintended
consequences
IMPACT/LAGGINGAcquisition, Activation,
Revenue, Retention, Referral, Cost Reduction, Market share
LEADINGSuccessful experiments, confidence of pilot users,
page performance improvement, search results
matching new offering,
BALANCINGEnsure quality doesn’t decrease if you have a ‘go faster’ metric.
Examples
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Types of Quarterly Goals TEST IT (EXPERIMENTS)
Your idea is new and hasn’t been proven so you should focus this quarter on running experiments
and validating your assumptions. This goal is usually owned by your Discovery team members.
NAIL IT (MVP)You’ve validated the idea and are now ready to build an MVP so you should pick metrics that prove the MVP is valuable, usable, feasible. Also consider
performance and quality metrics.
SCALE IT (MMP)You’re ready to hit the market so now you can measure Pirate like metrics and market share
expansion, revenue and customer success metrics. Consider balancing metrics.
For your quarterly outcomes, identify the right key results based on the goal
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Workshop: Writing Outcomes
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Lean Portfolio Management Team• Aligns 3‐Year and 1‐Year Outcomes
• Aligns outcomes & initiatives (epics)
• Reviews, approves & prioritizes portfolio work
• Manages the Portfolio Kanban & backlog
• Performs quarterly planning
• Reports progress toward outcomes, investment & performance targets
• Removes portfolio‐level obstacles
Enterprise Architect Or Lean
Governance
Portfolio Manager(s)
Portfolio Owner(s)
Portfolio Mgt. Team
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Planning Cadence: Enterprise
Team Outcomes
& Goals
< 3 Months
Team
of
Team
s
Quarterly Outcomes
3 Months
Portfolio
Strategic Themes & Outcomes
< 1 Yr.
Enterprise
Strategic Intent
1 – 3 Yrs.
Strategy
Align & Elaborate
Part 1‐Enterprise
Level
Part 1‐Enterprise
Level
Day 1: Vision & Strategy‐ Clarity on 3 year Vision & Strategic Intent‐ Define market strategy and how to win (by market
segment or product)‐ SWOT and market analysis data‐ Define Strategic Themes (1 year outcomes)‐ Define investment pool
Day 2: Portfolio Alignment.‐ Portfolio investment allocation‐ Review/modify current portfolio org design‐ Align portfolios to strategic themes‐ Identify risks, gaps and mitigation plan‐ Seed initial enterprise risks/obstacle board‐ Consensus and next steps
Day 1: Vision & Strategy‐ Clarity on 3 year Vision & Strategic Intent‐ Define market strategy and how to win (by market
segment or product)‐ SWOT and market analysis data‐ Define Strategic Themes (1 year outcomes)‐ Define investment pool
Day 2: Portfolio Alignment.‐ Portfolio investment allocation‐ Review/modify current portfolio org design‐ Align portfolios to strategic themes‐ Identify risks, gaps and mitigation plan‐ Seed initial enterprise risks/obstacle board‐ Consensus and next steps
Annual Planning with Quarterly Check‐Ins
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Planning Cadence: Portfolio
Team Outcomes
& Goals
< 3 Months
Team
of
Team
s
Quarterly Outcomes
3 Months
Portfolio
Strategic Themes & Outcomes
< 1 Yr.
Enterprise
Strategic Intent
1 – 3 Yrs.
Strategy
Align & Elaborate Part 2‐
Portfolio / Value Stream Level
Part 2‐Portfolio / Value Stream Level
Day 1: Demand Mgmt.‐ Review Vision & Strategic Intent‐ Review and align on Strategic Themes (Annual
Outcomes)‐ Create quarterly outcomes‐ Outcome readout and refinement‐ Build/Update Visibility Room /Outcome Dashboard
Day 2: Capacity Mgmt.‐ Review/modify allocation & investments‐ Review/modify current team of teams design‐ Align team of teams to outcomes‐ Update obstacle board‐ Retro on meeting planning, ceremonies, roles, etc.‐ Agree on next steps
Day 1: Demand Mgmt.‐ Review Vision & Strategic Intent‐ Review and align on Strategic Themes (Annual
Outcomes)‐ Create quarterly outcomes‐ Outcome readout and refinement‐ Build/Update Visibility Room /Outcome Dashboard
Day 2: Capacity Mgmt.‐ Review/modify allocation & investments‐ Review/modify current team of teams design‐ Align team of teams to outcomes‐ Update obstacle board‐ Retro on meeting planning, ceremonies, roles, etc.‐ Agree on next steps
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Planning Cadence: Team of Teams
Team Outcomes
& Goals
< 3 Months
Team
of
Team
s
Quarterly Outcomes
3 Months
Portfolio
Strategic Themes & Outcomes
< 1 Yr.
Enterprise
Strategic Intent
1 – 3 Yrs.
Strategy
Align & Elaborate
Part 3 ‐Team of
Team Level(PI/Big Room Planning)
Part 3 ‐Team of
Team Level(PI/Big Room Planning)
Day 1:‐ Vision & strategic themes‐ Present quarterly outcomes and top
deliverables/features‐ Architecture vision and practices‐ Team breakouts & planning‐ Draft plan review
Day 2:‐ Team breakouts & planning‐ Final plan review and alignment ‐ Team capacity, roles and allocation adjustments‐ Review dependencies, risks, skill gaps‐ Confidence vote‐ Planning retrospective
Day 1:‐ Vision & strategic themes‐ Present quarterly outcomes and top
deliverables/features‐ Architecture vision and practices‐ Team breakouts & planning‐ Draft plan review
Day 2:‐ Team breakouts & planning‐ Final plan review and alignment ‐ Team capacity, roles and allocation adjustments‐ Review dependencies, risks, skill gaps‐ Confidence vote‐ Planning retrospective
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Enterprise Visibility Room (EVR)
Where Quarterly Portfolio Planning Occurs
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Workshop: Walkthrough the EVRHealth & Maturity
Customer Segments & Personas
Performance KPIs
Strategic Intent & Themes
Quarterly Outcomes
Budget & Theme
Allocation
imped
imen
ts / Obstacles
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The blue columns represent ‘Demand’ the purple are
‘Capacity / Delivery’. You can click on any level of the org to gain visibility and alignment
on outcomes.
AgilityHealth Outcome Dashboard
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AgilityHealth Outcome Dashboard
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Lean Portfolio Management Implementation Path
Form the Portfolio Management Team
Create 1‐Year Outcomes
Prepare for Quarterly Planning
Conduct Quarterly Planning
Align the Epics/Capabilities to
the Outcomes
Establish the priorities for the
quarter
Align demand to capacity
Organize the Portfolio Backlog
Portfolio Work
Portfolio Outcomes
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Summary• Limit organizational Work-In-
Progress (WIP)• Make all work visual• Ensure cross functional team
alignment around customer value creation activities
• Connect Work to the Strategy and Vision
• Use Visibility Rooms at each level to Align Demand and Capacity
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