Portfolio Management and Agile

8/4/2019 Portfolio Management and Agile

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Portfolio Management and Agile:A look at portfolio risk and value

with the agile paradigmA presentation to

PMI Central Florida ChapterJohn Goodpasture, PMP

andAlex Walton, PMP

Copyright 2011 John Goodpasture and Alex Walton


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Are portfolio value-risk trade-offs compatible with

agile management practices such as: Dynamic backlogs

Evolutionary scope

Persistent teams

Incremental plans


The Question


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PerhapsThese are among the issues well address in this

presentation.


The Answer


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The Tension


Portfolio value is planned

Plans- Actions & behaviorare systematically

sequenced and related

Planning Horizon - A fewmonths to a year or more

Agile effects emerge

Emergence - Unplannedpatterns of interaction,

actions, and behavior

Planning horizon - A fewweeks to several months


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Portfolio: The Idea


Project Office

Portfolio 1 Portfolio 2 Portfolio N

Projects of common affinity are grouped


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Portfolio Management


Leadership

Business Value

Risk Management

Strategic Alignment

Management

Resource Management

Cross-project Coordination

Project Governance


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Value and Risk


Value

The business gets more in return thanthe stake put at risk

Constituents are more satisfied andbetter off than before

A system of projects is more effective

than a collection of individualprojects

Risk

Portfolios diversify business assetsamong projects

Boundaries between teams andprojects isolate unfavorable effects

Redundancy and backup among

projects protects business


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A SYSTEM is a specific set of structures

interconnected in such a way so as to producespecific patterns of desired behavior.

A system NETWORK contains nodes (where the workoccurs) and relationships (that carry the value

between the nodes).


Systems and Networks


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Strategic plans couple

relationships between projects Governance manages project-to-

project behavior, mitigatingconflicts and priorities

Project office protocols assureinformation exchange among

projects Redundancy mitigates failure to

produce business value from oneproject or another


Portfolio as a Network


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Portfolio Value Risk

Coupling

Triggers, drivers, data, andcontrol interconnected

Teamwork effects and behaviorsinterconnected

Loose coupling

dissipates or blocks badeffects

Coherence

Disparate effects harmonized forthe greater good

Noise becomes song

Less energy goes intodisharmony

Cohesion

Teams stick together Systems bend but dont break

All for one; one for all

Diversification

Value more predictable Value depends less on any one

project success

Risk spread among manyproject outcomes


Portfolio as a SystemThree Cs and a D


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Coupling

Co-located teams are tightly coupled Virtual teams are loosely coupled

Tight coupling fosters accurate and timely communication Loose coupling fosters innovation

Coherence

Goal alignment promotes the greater good Strategy aligns allocation of resources Sequencing logic phases deliverables and adoption

Cohesion Team coupling drives teams cohesion Interconnections promote cohesion

Diversification Risk events impacts are diluted Process and practices are situationally adapted


Three Cs and a Dfrom a Portfolio View


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Plan

Envision

Strategize

Risk adjust

Allocate

Apportion

Sequence

Reserve

Measure

Analyze

Act

Adjust



Plan, Allocate, Measure


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Plan Envision

Strategize

Risk adjust

Allocate

Apportion

Sequence

Reserve

Measure Analyze

Act

Adjust



Plan, Allocate, Measure


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Does Agile fit into portfolios?



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Almost any methodology can bemade to work on some project.

Any methodology can manage to failon some project.

Agile does fit, but

Alistair Cockburn


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The dynamics of Agile pose special challenges,but also present unique opportunities


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Agile in a Larger Context

Multi-year

strategic plan

1-3

Agile Horizon cycles

Annual

businessportfolio

AgileIterations


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Plan

Envision

Sequence

Prioritize

Do

Slice

Develop

Deliver

Measure

Reflect

Adjust

Act


Agile - Plan, Do, Measure


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Tensions of Accountability

Project centric

Earned valuethe projectmetric

Measures of effective use ofassigned resources

Measures for benchmarkingand historical reference

Business centric

Value earnedthe businessmetric

Measures of business success

Measures of customersatisfaction



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The Requirements Paradox

Requirements must be stable for

successful development; butuser requirements are never stable

We dont want requirements to change,but

because changing requirements are aknown risk, we should provokechangenow.

Its about Requirements!

Niels Malotaux


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21Copyright 2011 John Goodpasture, All Rights Reserved

Backlog cycle

Deliverables

Must Do

Should

Do

Reflect

Replan

Dynamic Backlog Cycles


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Portfolio 1


Portfolio Elasticity

Portfolio plan and valueproposition

Agile emergent patternand Value Proposition


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The Portfolio HorizonPatterns emerge, and value is in the eye.


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Customers Throughput is what customers buy and use

Stakeholders Throughput improves the business scorecard

Project

Each agile iteration produces throughput

Each iteration consumes resources, and Depletes the business balance sheet

Business Throughput restores balance sheet over time


Throughput is Value


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Throughput Builds Value

Business value $

Time

Resourceconsumption

ValueEarned

Resourceconsumption

ValueEarned

Project Project


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Agile Management

Coupling

Co-location tightens coupling War rooms tighten coupling

Stand-up meetings tighten coupling Iterations or sprints loosen coupling Object practices loosen coupling

Coherence

Embedding product managers challenges coherence Sprint sequencing enables coherence

Re-useable objects reinforce consistency Emergence weakens coherence


Agile: Three Cs and a D


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Agile Management

Cohesion

Humanity of teamwork emphasized Loyalty, trust, and sharing creates strong team cohesion

Effective conflict resolution holds things together Personal accountability and commitment fosters cohesion

Diversification

Dynamic backlog diversifies risk Frequent deliveries diversifies early-late adoption risk Process and practices situationally adapted

Collaboration in co-located settings enables reduces learningcurve effects


Agile: Three Cs and a D


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If the customer is not

satisfied, he may not want topay for our efforts.

If he is not successful, hecannot pay.

If he is not more successfulthan he already was, whyshould he [pay]?

Niels Malotaux

The ultimate test


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Summing up!


Portfolios constantly attend

to the value-risk trade Tension exists between

emergent value andportfolio plans

At each iteration, cohesion,coupling, and coherence areevaluated anew

Agile focuses on business

value [throughput] The many iterations of agile

diversify risk

The ultimate test iscustomer satisfaction Business Value & Risk


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More in the books

PUBLISHED BY J. ROSS PUBLISHING

Square Peg Consulting, LLC


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Thanks for the opportunity to speak tothe Central Florida Chapter

John Goodpasture Alex Walton


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Contact us

Square Peg Consulting, LLC

[email protected]

[email protected]

3PM, LLC

[email protected]

[email protected]

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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How would you explainemergent outcomes tostakeholders with specificexpectations?

Should portfolio managers bein the business of allocating

by top down planning?

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Portfolio Management and Agile

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