Lean Portfolio Management (LPM) can significantly help during difficult economic times. But do we need to change our approach to managing investments in LPM during these challenges, or can we continue with business as usual? Let’s look at some of the practices in LPM and how they can help us make the most of our investments, even during tough economic times.
Keep in mind that LPM is not primarily about cost savings; when done well, it can indeed save costs.

Take a closer look at the Epic MVPs that are underway. These MVPs (minimum viable products) are being worked on to validate or invalidate a hypothesis. Let's examine the leading indicators - here hoping that the leading indicators defined are useful and on the right level.

Maybe we have enough data already to make a decision. Does the data show that we're on the right track, or is it pointing towards an invalidation of our initial wishes and hypothesis? If so, it's time to pivot from that Epic and avoid investing further in something that won't give us the desired outcome. We don't want to throw good money after bad. This is what LPM and the Lean startup cycle is all about - pivoting quickly from unproductive efforts and focusing on finding and investing in the ideas with the best possible outcome.

The teams can now plan to move on to the next Epic MVP in line and its features, or other work with higher cost of delay. This should be an undramatic event.

Resizing Epics in exploration states

So we have multitude of epics in the states review or analysis (WIP limits, folks!). Each epic takes up headspace, keeps hands busy and uses resources. A bet we want to make, a risk we want to take, which is necessary for innovation to happen. But even though we know that small batches flow faster through the system, from the organisation to the customer, our Epics tend to become larger than they need to be. Bloated with business outcomes, maybe?

Some are just large per definition, but now we are curious about the rest.
I want to look for epics with very broad business outcomes, or the ones with multiple objectives and more than one MVP:s. Those are often good candidates for splitting and resizing. By splitting the Epics we will get faster feedback once we start working on them. We learn more for a lesser investment, and can prioritise more efficiently.

Increasing Local Decision Making

During difficult times, we may feel that we need more control, but does that mean centralizing control? Instead, consider increasing local decision-making power even more.

We want to be able to make even more informed decisions in the front-line teams, close to the solutions and customers. Empowered Product managers, architects and teams are in a better position to make local product decisions and do what it takes to increase and maintain the desirability of the solutions they manage and develop. And this is what we strive to promote.
The budget guardrails in LPM can provide guidance and set boundaries for spending, while still allowing for local control:

Capacity allocation adjustment
With capacity allocation we want to inspect and adapt the amount of new features vs maintenance stories, architecture enablers et cetera we are taking into the planning period. It is tactically better right now to focus more on keeping the lights on, or would we rather introduce more differentiating new features into the products and services? What does the rapidly changing market tell us, and do we want to promote efficiency or effect?

Business owner engagement & Epic threshold
When did you actually do a follow up on the BO:s engagement, presence with the teams and frequency of interactions lately?
Im talking about decentralized decision making here, and to support that we want to make sure that there is a great amount of interactions here. We want to see a lot of discussions in our organisation around what we can do to improve and aim towards the same objectives in product development and business development alike.
And how large does an initiative have to be a concern of the portfolio? I see a tendency that the threshold is often set low, creating a lot of conversations in th eportfolio. We would rather let the empowered local product management and teams take care of more, in collaboration with business owners and such.

Investment horizons review
Given the current situation, I believe it is as important as ever to focus on the Investment horizons and evaluate how we allocate our investments between the different horizons.
Maybe this is exactly the right time to reallocate funds to emerging new offerings (horizon 2) because the market really is changing? On the other hand, if we are facing financial difficulties, it may be necessary to prioritize securing earnings from existing solutions and maintaining our market share (horizon 3). We want to make sure we are not missing out  on new innovations and markets that are arising and allow and promote exploring and testing them (horizon 1). Perhaps this is exactly were we need to double down and increase spending.

Whatever the case is, we will benefit from a review here, just keeping in mind that while we want to stay in business we cannot afford to pull all our troops home, crippling innovation and risk starving out the future of our company.

These are just a few examples of how LPM can support our efforts, and help us survive and thrive in a challenging economy. It's important to maintain trust in these practices and not revert to old ways out of fear.
Lean Portfolio Management is designed to help us navigate an uncertain future, no matter the state of the economy.

What about strategy, budgeting and forecasts?
Strategic planning is a top priority during tough times, and a few words on that are called for as well.
More on that in part two, coming soon.