Everyone has a unique manner of carrying out tasks, right? Some of us prefer to eat our meat before our vegetables, while others skip to the dessert and some of us just eat tofu.
The same applies to portfolio management.
Choosing the appropriate initiatives or investments for your firm to undertake in order to accomplish its objectives is the main goal of portfolio management.
However, you can choose your projects or investments using a variety of approaches and styles; one of these ways is known as “Lean” portfolio management.
It may appear difficult at first, but after sorting through all the enterprise theory, you’ll find that it’s actually a very clever and straightforward method of keeping track of everything your firm has access to.
This post will define Lean portfolio management, go over the tenets of the Lean approach, and show you how to apply Lean portfolio management using Monday.com.
What is Lean management?
We need to discuss what “Lean” genuinely means before we get into how a Lean management style may be applied to portfolio management.
What is a “Lean” management style?
Many Agile managers utilise “Lean” management and quality improvement techniques to concentrate on waste reduction.
Many management nerds view lean management as more of a company philosophy than merely a tool or technique that should use sparingly. Moreover, this is due to the fact that in order to be effective, you must integrate Lean principles throughout your Agile portfolio’s operations and supply chain.
Toyota was the first company to apply this Lean philosophy. Firstly, the business made the decision to put into place a strict regime that concentrated on cutting excessive waste in each step of its Toyota Production System (TPS).
The outcome? Lead times decreased, production costs decreased, and quality increased.
Project and portfolio management can both be based on the same lean principles.
In project management, the majority of teams produce excessive waste in the form of pointless planning, pointless meetings, excessive paperwork, unneeded amendments, pointless multitasking, resource management, and other activities.
Meanwhile, you can eliminate all of this waste and reap the full economic benefits of each portfolio item by using the five lean management concepts to all of these project management components.
What are the 5 principles of Lean management?
When applying a lean management approach to your project or portfolio, you must take into account five fundamental concepts.
- Determine your consumers’ value by identifying them
- Decide on your value stream and map.
- Reduce waste Respond to client requests
- Strive for excellence
While some of these sections may be easier to understand than others, we’re delighted to guide you through each one to make sure everyone is on the same page.
Identify your customers and specify value
The first step in lean governance is to clearly define the goals of your team and use those to establish standards.
In order to implement a Lean management style, you must be aware of who your stakeholders are and what they want. Choosing the proper project involves meeting the needs of all your consumers or corporate stakeholders.
Identify and map your value stream
A value stream exists in every team. Understanding your value stream is essential to Lean portfolio management. It’s just a fancy way of explaining all the steps you must take to complete a project or a product.
By listing every step you take to complete a project or a task, you may determine in a safe environment which processes are necessary. Which ones are completely unnecessary, and where Lean budgeting could significantly reduce your costs.
Create a value flow and eliminate waste
In this section of the Lean portfolio management process, work begins to get done.
Furthermore, you’ll be able to eliminate waste wherever you find it once you’ve mapped out your value stream. You’ll be able to produce what the financial czars like to call a “value flow” after getting rid of that waste.
A value portfolio flow is define. It’s a resource-efficient procedure that makes sure there is as little waste as possible at every stage of the production, management, or selection process.
Respond to customer pull
You should be reacting to customer pull, which is another essential element of Lean portfolio performance.
This means you respond to demand without squandering resources, time, or money on activities that no one requests. Instead, concentrate on offering only the products or services that are in demand.
In manufacturing, effective LPM will reduce budgeting expenses and losses, and in project portfolio management. It will enable you to control the flow of projects depending on the need for your team to execute them.
The idea that there is always work to be done is the cornerstone of the Lean management concept.
No matter how efficient things appear to be at the moment, you must regularly review your procedures. Compare them to KPIs to ensure that you are spending as little time as possible and operating as efficiently as possible.
Overall, the goal of Lean and Agile management is to achieve the highest level of humanly attainable operational excellence, even if you never reach peak operational excellence.