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Lean Portfolio Strategy Part 2: Shifting from Imitation to Real LPM - The Move to True Value Streams

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Download the associated webinar: https://www.cprime.com/resource/webinars/lean-portfolio-strategy-part-2-shifting-from-imitation-to-real-lpm-the-move-to-true-value-streams/

Lean Portfolio Management (LPM) is touted as a world-changing paradigm. A shift that promises to boost productivity, time to market, quality, customer satisfaction, revenue, and a host of other vital business metrics. It promises to transform the organization to a leaner, more agile version of itself, primed to innovate effortlessly and outperform its competition at every turn.

Most organizations who have tried to establish LPM find the reality to be more nuanced than that. These companies end up implementing “Imitation LPM” where actions and some process changes may be in place and functioning, but the real promise of LPM- the increased agility and reduced waste- is not occurring.

Real LPM assumes that work is funded by value streams with teams organized around delivery of products and services that are valuable to customers. This is, perhaps, the hardest part of implementing LPM.

In part 1 of this webinar we explored how signs of imitation LPM show up in an organization’s approach to strategy. In this second of our series, we join Michiko Quinones (Jira Align Consultant) and Jean Dahl (General Manager, Scaled Agility) to explore:

- How to organize around value streams
- Real world examples of organizations who have successfully shifted from imitation value streams to true value streams
- The impact to funding and budgeting cycles

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Lean Portfolio Strategy Part 2: Shifting from Imitation to Real LPM - The Move to True Value Streams

  1. 1. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. WWW.CPRIME.COM | 877.800.5221
  2. 2. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Lean Portfolio Strategy Part 2: Shifting from Imitation to Real LPM – The Move to True Value Streams
  3. 3. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. HOUSEKEEPING ITEMS Audio is streamed through your computer speakers, so make sure your audio is on and turned up. The recording and slides will be sent to everyone via email within 24-48 hours after the webinar concludes. Submit questions any time during this presentation via the Q&A box on the bottom panel of your screen.
  4. 4. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. OUR SPEAKERS Michiko Quinones Jira Align Consultant Cprime Jean Dahl General Manager, Scaled Agility
  5. 5. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. AGENDA 01 A HISTORY OF VALUE STREAMS 02 BUDGET IMPACT OF REAL VALUE STREAMS 03 REAL COMPANIES WHO HAVE SHIFTED 04 KEEP THE CONVERSATION GOING/Q&A
  6. 6. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Value Streams Key Points
  7. 7. A Value Stream is a _______ PUT YOUR ANSWER IN THE CHAT
  8. 8. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. POINT 1 It’s the Waste
  9. 9. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. VALUE STREAM MAPPING https://www.projectengineer.net/what-is-a-value-stream/ Customer need Product
  10. 10. Movement Overproduction Time on hand (waiting) Transportation Making Defective products Stock on hand (inventory) MANUFACTURING MUDA - TAIICHI OHNO
  11. 11. Movement Task Switching Overproduction Partially done Work Time on hand (waiting) Delays Transportation Handoffs Lost Knowledge Making Defective products Defects Stock on hand (inventory) Extra Features SOFTWARE MUDA - MARY POPPENDIECK
  12. 12. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. RARELY OR NEVER USED -Pendo: The 2019 Feature Adoption Report https://www.pendo.io/resources/the-2019-feature-adoption-report/ 80%
  13. 13. TRUE VALUE STREAMS • Less delays • Less dependencies • Less task switching • Less lost knowledge
  14. 14. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. POINT 2 It’s the Product
  15. 15. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. MCDONALDS 15 15 Happy Meal Need for Fun Affordable Family Meals Operational Value Stream Development Value Stream Food Fulfillment Customer need Product
  16. 16. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. SAFE’s ITERATION ON VALUE STREAMS Internal Value Customer need Product External Value
  17. 17. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. POINT 3 It’s a Map to Optimize Value Not An Organizational Construct
  18. 18. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. • NOT ”Are we organized into value streams?” but • “Are our teams optimized for delivering value?” THE QUESTION IS
  19. 19. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. CURRENT STATE From Waste/Product/Optimization to Planning/Process/Organization
  20. 20. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. MODELS FOCUS ON PLANNING/PROCESS Many organizations value stream mapping as a way to determine who needs to plan together in cadenced planning cycles. Or they use value stream mapping to understand process steps. Or value steams have become new organizational constructs.
  21. 21. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. • Similar to SAFe, focus is on the capabilities to start and end with customer value. PMI/DISCIPLINED AGILE’S ITERATION ON VALUE STREAMS
  22. 22. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. • Creating Value • Removing Waste • Product Focus lost as the goals Task Switching Partially Done Work Delays Handoffs Lost Knowledge Defects Extra Features
  23. 23. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Definitions Real value streams Built to deliver value on a product with the least amount of waste Looks like a network Imitation value streams Built to group similar functional agile programs for aligned planning or internal product delivery. looks a lot like the functional hierarchy.
  24. 24. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Pre-Agile Transformation Functional Units operating in Silos Post-Transformation - Good Functional Units Planning Together Post-Transformation - Better Networked Teams in Value Streams Imitation Value Streams Real Value Streams Post-Transformation - Best Full Stack Programs in Value Streams Optimized Real Value Streams D C B A
  25. 25. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Budget Impact of Real Value Streams
  26. 26. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. THE IMPACT ON BUDGETING
  27. 27. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. THE REALITY • The reality is that most organizations have imitation value streams. • They are still functionally aligned and budgets are still provided to functions, not value streams.
  28. 28. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. BUDGETING IMPACT Post Agile Transformation with Imitation Value Streams Post Agile Transformation with Real Value Streams Financial Systems are set up to fund Initiatives within Functional Units With the move to Real Value Streams, the Funding also has to shift
  29. 29. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. Real Life Stories
  30. 30. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. A Company that Tried and Failed Reminding Us That We Need to Connect Operational and Development Value Streams
  31. 31. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. A Company that Succeeded Reminding us to focus on stakeholders more than shareholders and to let the Street know Capex/Opex Impact
  32. 32. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. IDEAS FOR SOP-98 STAGES TRANSLATION TO AGILITY NOT TO BE CONSIDERED AS FINANCIAL ADVICE 20% of the PI 60% of the PI 20% of the PI Analysis Reviewing Portfolio Backlog In Progress In Deployment Done Chart from: https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176156442651&acceptedDisclaimer=true Kanban States (Pat Reed) PI % of Work
  33. 33. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. • Identifying Value Streams • Using the Value Streams to Organize Portfolios into Products/Product Lines • Funding by PI by Value Stream • Rewarding executives for stakeholder value more than shareholder value • Translating into SOP-98 Categories for CapEx/Opex • Informing the Street of the Impact to CapEx/Opex WHAT WORKED
  34. 34. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. KEEP THE CONVERSATION GOING… • Connect with our speakers on LinkedIn • Check out Cprime upcoming webinars, read our blog, download whitepapers/case studies & more: www.cprime.com/resources • Share with us what topics you are interested in, ask us questions or give us feedback: learn@cprime.com
  35. 35. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. FOLLOW US ON SOCIAL MEDIA Share in the conversation & keep updated on thought leadership, events & more! on LinkedIn, Twitter, Facebook, & YouTube
  36. 36. ©2021 Cprime, Inc. All rights reserved and no copying without express written permission. CPRIME SERVICES
  37. 37. QUESTIONS? WWW.CPRIME.COM | 877.753.2760 QUESTIONS?
  38. 38. QUESTIONS? WWW.CPRIME.COM | 877.753.2760 THANK YOU WWW.CPRIME.COM | 877.753.2760

Download the associated webinar: https://www.cprime.com/resource/webinars/lean-portfolio-strategy-part-2-shifting-from-imitation-to-real-lpm-the-move-to-true-value-streams/ Lean Portfolio Management (LPM) is touted as a world-changing paradigm. A shift that promises to boost productivity, time to market, quality, customer satisfaction, revenue, and a host of other vital business metrics. It promises to transform the organization to a leaner, more agile version of itself, primed to innovate effortlessly and outperform its competition at every turn. Most organizations who have tried to establish LPM find the reality to be more nuanced than that. These companies end up implementing “Imitation LPM” where actions and some process changes may be in place and functioning, but the real promise of LPM- the increased agility and reduced waste- is not occurring. Real LPM assumes that work is funded by value streams with teams organized around delivery of products and services that are valuable to customers. This is, perhaps, the hardest part of implementing LPM. In part 1 of this webinar we explored how signs of imitation LPM show up in an organization’s approach to strategy. In this second of our series, we join Michiko Quinones (Jira Align Consultant) and Jean Dahl (General Manager, Scaled Agility) to explore: - How to organize around value streams - Real world examples of organizations who have successfully shifted from imitation value streams to true value streams - The impact to funding and budgeting cycles

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