Strategy and Investment Funding - Start with what's real and work from there (#18)

“As an SPC on the Portfolio Level: The first time just be an assistant, not the head coach. Learn about how companies work, how they speak, how they behave.” - Nikolaos Kaintantzis

Hosts Nikolaos Kaintantzis, Stephan Neck, and Mark Richards take a deep dive into Lean Portfolio Management (LPM), focusing on the critical areas of Strategy and Investment Funding. The conversation sheds light on the real-world challenges of managing a portfolio in an agile environment, offering practical advice on how to make LPM a success.

Key Takeaways:

• Start with Reality, Not Invention: Mark emphasizes the importance of beginning LPM with what is real in your organization rather than inventing a portfolio from scratch. He stresses the need to uncover the true nature of your portfolio and build from there.
• The Power of Visualization: Niko highlights how visualization tools can be instrumental in managing portfolio traffic. By making the current state visible, organizations can more effectively identify bottlenecks and areas for improvement.
• Continuous Improvement: Ali underscores the importance of embracing continuous improvement in LPM. He emphasizes that the journey doesn’t end with aligning strategy and investment funding; it’s about continuously refining processes to adapt to changing business needs and ensuring that the portfolio remains a dynamic and value-driven entity.
• Innovation vs. the Hamster Wheel: Stephan reflects on the balance between innovation and routine activities within LPM. He likens it to getting off the hamster wheel—only when strategy and investment funding are correctly aligned can innovation truly take flight.
• Practical Tips for Implementation: The team offers actionable advice for SPCs looking to improve their LPM practices, from prioritizing transparency to ensuring continuous feedback loops. They stress that LPM is not a static process but one that requires constant iteration and adjustment.

This episode is essential listening for anyone involved in Lean Portfolio Management. It offers a blend of strategic insights and practical advice to help you connect the dots between strategy, investment funding, and successful portfolio management.

Cast:

Niko Kaintantzis(Moderator)

Ali Hajou

Stephan Neck

Mark Richards

Transcript

Mark Richards: 0:01

You're listening to SPCs unleashed a shaping agility project that emerged from the 2023 Prague safe summit. The show is hosted by Swiss SPC, T Stephan Nick and Niko kaintances, Dutch, spct, ali hajou and Aussie safe fellow, Mark Richards. We're committed to helping SPCs grow their impact and move beyond the foundations taught during implementing safe each week, we explore a dimension from the frameworks competencies. We share stories about our journeys, the secrets we've found and the lessons we've learned the hard way. And welcome to another episode of SPCs unleashed this week we open the Lean portfolio management competency, and we are in the always interesting hands of Niko, and we're not quite sure yet whether he's going to ask us which Greek island leading portfolio management thinks about so without further ado, over to you, Niko. Take us away after

Nikolaos Kaintantzis: 0:56

a break, a holiday break for us, summer vacation from Mark, winter vacation, we are back with portfolio, a huge chapter, and this time we are going in the first time lean portfolio management, in the first competency, the first collaboration. It's about strategy and investment funding. And this time, I would like to ask you straight away, what is in the show, Ali, what's in the show from your side?

Ali Hajou: 1:21

Well, hi everyone. Today is a little bit of a weird one. Why? Because I think today I'm going to be Mr. Grumpy. Because whenever we talk about portfolio management, and we're going to talk about, let's say, lpm, and how lpm is being used very often. Things go wrong a lot and and it's really, yeah, it's really bad. So I'm gonna, I'm gonna be Mr. Grumpy. Not gonna talk about a true passion. I'm gonna talk about a true annoyance, the annoyance of people who ignore the fact of working with agile teams but simultaneously still having traditional project funding, and then just ignoring that, and, you know, parroting safe material or agile, let's say community dogmas. And I'm just, I'm very annoyed by that. So you'll, you'll hear a bit about that, to be

Nikolaos Kaintantzis: 2:23

our Grinch in this episode. Thank you very much. Let's ask Stephan.

Stephan Neck: 2:29

Yeah, hi. Ya all, uh, I'll second Mr. Grinch or the grumpy one. I think lpm is, is a real challenge. It's, it's finding this, this right flight level of collaboration and guidance. And for me, the portfolio is like a hot spot where you find the hamster wheel, you find innovation, you find small improvements, you find big leaps, you find everything. And if you get it right, it will fly.

Nikolaos Kaintantzis: 2:58

Thank you. Stephan, Mark time please, some passion, something positive. Otherwise, I'll be the only one smiling.

Mark Richards: 3:04

So I don't know. Did you guys have Mr. Men in Europe? Mr. Happy, Mr. Sad, Mr. Grumpy. It was like a big kids book thing. Over here was the Mr. Men. And there were all these little comics about Mr. Men. And there was, you know, missed all of the Mr. Men were in emotion. And as soon as Ali was like, I'm going to be Mr. Grumpy, I went, I'm either going to be Mr. Patient or Mr. Pragmatic. But you know, if you go to like, the biggest thing for me in terms of passion when it comes to learning portfolio management, is resisting the temptation to invent a portfolio. It's the misstep I see so many people take when they start down the LPN path, is they make one up. And you've got to start by finding an existing real portfolio and then apply the safe toolbox to the existing real portfolio. Don't make one up, or you're forever going to be limited.

Unknown: 4:00

Wow,

Nikolaos Kaintantzis: 4:02

that's a great start. Thank you. And in my case, with where my passion is, visualize, visualize the things. It'll always help me showing the people where the problems are, why it doesn't working. So I will talk a lot about visualization in this episode. Great. So let's go to our first triggers. Before I do that, let me give you some small, three year input about what's in this collaboration. In this dimension, it's really about strategy, it's about funding, and it's about creating and maintaining the solutions business and the market needs. And if you hear all of this, my first question is, how do you start? No, how do you start. Or, let me say differently, it's really a huge thing. And we have also a whole podcast with with Mark and Eric, just about portfolios. It's really a huge thing. If you wanted to put a definition on this, what is a portfolio? And say, if it's easy, you go to the glossary and you see it's a set of. Development value streams, great. How you explain portfolio to your customers in easy words? Let's start with Ali,

Ali Hajou: 5:09

yes, the portfolio. I mean, we're talking about the safe portfolio. Here is, I try to reverse engineer it a little bit from the starting with the agile team, because in the end, whenever we talk about the safe portfolio, we're talking about how, how to make sure that we are spending the capacity that we have on the things that bring the most value. So it's, it's in the end, you know, we're trying to filter all of the work that eventually lands on the plate of the agile teams who are actually building the value, and then from there, you try to reverse engineer. So that means that we might have multiple agile teams surrounding a certain business line or certain product family. And, you know that means that these people who are building the value are having all types of different backgrounds. Some people call it blood groups. Some people call it a functional background, or, as I sometimes call it, engineering disciplines, but all of the skills that you need in order to build that value. So it's you'll have to organize around something. Typically, it's called the organize around value. But I think that definition is also a little bit insufficient. So what is a safe portfolio? Have you know, it's honestly I have, I don't have a really good description, but I would, I would like to much more focus on the value stream itself, which I call, and I tried to write it down a product family oriented business line, which is already a triggering term over there, but I did that on purpose which owns its stable capacity. So that means the people that you need in order to develop the value and owns the responsibility to distribute the budget for product, slash solution, solution development. And that's that little additional last part is what let's say, distinguishes the portfolio, as we are talking about, from the value stream. So it's, it's also the, I don't know, budget allocation, reallocation, evaluation processes around these, let's say, around the enablement of these value streams. So I think I need to summarize this somehow, but I'll do that in another moment. Yeah, yeah.

Nikolaos Kaintantzis: 7:44

I think our job as SPC is really to connect to the customers we have. And I think it's not so easy to define portfolio without having wrong things in it, because it's also a huge, huge area mark how you try to explain to your customers what the portfolio is what the safe portfolio

Mark Richards: 8:01

is. So if you run it was really interesting looking at the glossary definition. And it's probably a reminder, I should look at the glossary more often, because I saw, when we're doing the prep, I saw the glossary definition. That's interesting, because if you think about safe one point naught, the portfolio was basically anything beyond the train, if you had multiple trains, if you had a world that was part train and part something else, the portfolio was where you made the bridge. And over the years, it's evolved to become this kind of container, which Ali described, a set of stable teams organized into value streams with that responsibility and authority. The challenge I have with that is, if you wait until you can get the permission for that, you might be waiting a very long time, because to create the conditions in which you can have that, you need to exact an awful lot of change beyond the art. And so I think running with that kind of definition of portfolio to go it's only a safe portfolio if it does all of these things, it's like, well, how do I get into that place? And I know a lot of times I used to people that say, this is a portfolio, and go, that's not a portfolio. And what I've learned, and perhaps I've learned some humility along the way, is to go to the organization. What do you call a portfolio? Let's not make one up that lives by our rules. Let's understand what they think of as portfolios, because that's where we're going to have to start enabling the change. And the challenge for me, and you know, I mentioned this in my passion, and perhaps it's why I've learned to be patient, is if you look at all the safe material around lead portfolio management if you run through the lpm course, if you look at the number of words in the article about the competency, you'll find that probably two thirds to three quarters of it focuses on strategy and investment funding. But if you've just invented a portfolio, you almost certainly don't have the mandate to define strategy and. Of funding models. And it's not to say you can't get some good out of it. You can get some amazing stuff out of it in terms of leading into the world of agile portfolio operations and like governance. But if you want a seat at the table for strategy investment funding, you've got to find a portfolio in the organization. And there will be multiple flavors of portfolio in the organization. You've got to find one that actually has a mandate that includes setting strategy and driving a funding model. So how do I define a portfolio? How does the organization define a portfolio? And

Nikolaos Kaintantzis: 10:32

I think it's a really important thing, the main mandate question, the whole thing is called unleash SPCs, or SPCs unleashed. And I think one thing that we are doing wrong as SPCs is thinking we can just put over safe on the on something and call it a portfolio, and or waiting until everything is allowed to do. And finding a portfolio, having a mandate, or the whole mental thing, is really important to say, I cannot change something without yeah, having having the okay of some higher leader, or of people who are investing it to doing it, and all the portfolios have seen that failed were because people just tried something out, invented the portfolio without having the mandate of doing something, and they were surprised they are not allowed to doing it. So I love this mandate thing a lot. And if you here listen to podcast mark and Eric, that you will realize. Mark, say, a lot of a lot of times, mandates. And it really resonates with me. It's really an important thing. Stephan, your definition of a portfolio, yeah,

Stephan Neck: 11:33

it's interesting. Look. I'll take a really pragmatic and generic approach. It's for me, it's a crucial step. It's a huge shift from from a traditional approach to a really dynamic and value driven model, whatever that portfolio then could be. And behind that, I always have the same practical story when I dive into a transformation, I try to avoid an unnecessary discussion if you have value streams and if you know what you are dealing with. So I try to focus on what are actual drivers for the business, so you go into the current situation, right? And then you might start talking about, Hey guys, what's the capacity allocation you use for, like, life cycle, for innovation, stuff like that. Don't talk safe terminology at the beginning. Just keep it at the start line. Where are you and where are you heading to? And that ties very much to what Mark just said, right? Don't try to invent something. Don't try to sketch something on a board where you have to convince a lot of people what it is or what it should be, start where you are

Nikolaos Kaintantzis: 12:48

perfect. I just talked about about the glossary definition, and I think the gloss definition will it will change the next years, because if you see there are combined portfolios and so on, it will not hold on what I try to say, or what worked, usually, not always, and that's why I said at the beginning, as an SPC, you sometimes say something wrong, but it helps the customer go one step further from the position you are. I try to explain a portfolio is, for me, an investment vehicle. We're investing in products, in things you're selling and services you're selling. And at the end, you can sell the whole portfolio as a company somewhere else. So if you manage to find the portfolio, to have a portfolio that you can sell out of your company, then you have a really good one, because then you have strategy in it, and you have a lot of important stuffs in it. And in one case, one of my customer did it, they had four portfolios, and they sold one because they needed money to acquire something else. And yeah, if you can sell it as a company, then you have a really, really great portfolio. But it's not the best definition. It just works sometime Perfect. Now we've been a little bit outside on the portfolio, not on this, on this dimension, on this, on this collaboration. Let's go deeper in this collaboration, whereas about executive enterprise executives, business owner and the architect, talking about or caring about connecting the strategy, maintaining the portfolio vision, realizing this vision through epics, talking about or caring about guardrails, about budget guardrails, about Lean budgets, caring about portfolio flow. Oh gosh, this is so much we have to do here. It's really a two thirds of the whole portfolio content in it. And my simple question is, where do you start? You have so many bullet points. Where do you start when you have a portfolio at the start with Mark, because he's smiling so nice. Well,

Mark Richards: 14:38

knowing that you've listened to the portfolio podcast Niko, you've probably heard us say, start where you are hundreds of times. Yep. And I think there's a well, really, the first piece to me is to go, Well, what is the existing portfolio ecosystem? Big enterprise will have many portfolios. They'll have many portfolios of different. Flavors with different mandates. And you know, if you think about we've had a lot of teaching over the years when it comes to arts, we had the kidney diagram, and then eventually we had, you know, find somewhere with supportive stakeholders, a compelling problem to solve. And you know, it's like, where's your Bullseye in the middle of these flavors? And I think for me, you've got to do the same thing in the portfolio ecosystem. What are the existing portfolios? What's the level of pain they're in? What's the appetite and excitement about resolving that pain amongst their executives? And which ones have problems you think you might be able to help with. But then the second thing is, don't go in with your favorite tools, because, you know, as agile people, we have things we love to hate about traditional portfolios, like project funding, because we can see the problems that that causes. But if your portfolio executives can't see the problem that that causes, their excitement about fixing the problem that you can see is going to be pretty low. Find the problems they've got. There'll be plenty of problems you can help with. Find the problems they've got and find the tools that are going to help them solve the problems they care about. And then as you start to put some runs on the board and you build some confidence in applying these new tools, you get to start to draw their attention to some of the problems that you can see, and perhaps they couldn't see yet. Yeah,

Nikolaos Kaintantzis: 16:35

I loved, I love this start where you are, because it's something I'm doing visually. So I try to collect all the informations I have and put it on walls, on whatever tools they have. I personally don't care about tools, because I'm not strong in tools. By the way, even if I have a computer scientist background, I take whatever is there and I try to visualize everything. And last time, the last biggest mandate, I did a portfolio. I just collected every project they had. They had projects. I just collected everything they had. And it was so much. And they realized, okay, no wonder we have a traffic jam, because we are doing too much. And then people in the in this thing told me, Oh, no, no, there is more. There are things we're doing behind the scenes. We have some underground traffic too. And then we started putting this underground traffic too, on the same, on the same, same, common board. And then Okay. And what is missing there is our first priority projects, is the expedite projects, the flying cars. Okay, now we put also the flying, flying cards on this board. And at the end, we ended up with with work in process, about 200 projects at the same time being in implementing and no wonder nothing was done, because everything was ongoing on the ground, on the ground and flying. And the next thing, what they tried, is giving the next higher priority, the stuff, so that this thing is happening. Because the prior one, the flying cars, did not work. They're now going for rockets, because something must be faster. But this visualization helped them to realize we're doing too much. And what we did then is, through this visualization, we removed stuff. So when you want to add something new, you have to remove something. And with this removing something, sometimes they removed 20 projects at once because they realized they are all connected. We started somehow they will not bring the value we need. They will not help us to to achieve the goals we have, the battles we have to win. So they just remove 20 and put one. Okay, well, state of war, it's where it's 41 instead of five. But at least something happens, and this visualization really helped me. So start where we are. Visualize the things. Is also one of my advices. So just

Mark Richards: 18:39

jump in and give a shout out to our friend saheel, who, of course, lives in America. So is never a way for our SPCs unleash shows, but the recent community contribution article that he contributed to the framework around ENTERPRISE STRATEGY rooms gives some fantastic guidance on visualizing everything.

Nikolaos Kaintantzis: 19:00

Yes, and I will just put the link on the LinkedIn stream in the comment section so you have also the link. I will just do it the next minute. Stephan, I give the word to you while I'm try copy pasting

Stephan Neck: 19:11

perfect. I like this streaming because my experience is fully in sync what we already heard, right? And I'm repeating, start where you are the current situation. And what I like is in the domain of portfolio management, I like sketching with the involved people. So go to a sketch board, go to a whiteboard and put the three elements of strategy, portfolio and execution on that board as a big column, and then ask the people like you said, What are you doing already, for example, what's the strategy process? Process? What are the guidance you can get out of a strategy right? Do we have a good diagnosis? Do we have guiding policies, and is it. Linked to what we actually do. And then you start talking about these guidelines. Are they inhibiting? Are they supporting stuff like that? Just again, in an agnostic way, start to paint that picture. And then you go into starting visualizing, what should we achieve this year, what should we achieve in the following years, so that we are compliant with our strategy? And this then kind of deviates into a discussion of, hey, our existing governance is probably not what we should have. And where are the white spots? Where is the where are the action fields? And again, I'm not talking safe at that moment. I'm just talking about what it is, where should we heading to? And that's how you involve people. And all of a sudden, portfolio management is not just this magic box between strategy and execution, it's an open box, and we have a we have a view into that box. And you start establishing a collaboration and talking about either an existing coordination or a missing coordination, the givens, what you should have and and that's, for me, the starting point. That's how I start with portfolio management. No matter what starting point I find in a mandate, what I find in a company? Ali, yeah,

Ali Hajou: 21:28

I've, I have a have a slightly, slightly different approach. Have any one of you ever received a question to start implementing lpm without even having agile teams in place. Yeah, yeah, yes. See quite some hands. Fantastic. Because I think, I think somehow portfolio management and adjusting that is very sexy, so you know, and it feels very big, and it's the next back thing, and every next best thing, and everyone is done with that agile stuff. So let's do portfolio management. So I find that fascinating, because if you try to adjust or implement anything lpm before having agile teams, then I think there's still some value in it, the value that Niko just mentioned about visualizations, you really understanding what is really currently sort of in process, which almost always is a surprise, and that generates the insight that we really need to do something about it. So I see that value. But typically, let's say, diving into Portfolio Management or lean portfolio management is not that easy. And what do I mean with that? Most companies, you know, especially most corporates, they need to adhere to all kind of International Financial Reporting Standards. IFRS, gap, FASB, what is it? 60 or 86 there is all kind of international standards that that countries need to or companies need to adhere to, and these standards are implemented and are audited by other companies. So changing that require means that you're changing an audited process. So trying to move away from project funding and move to product funding that in itself is a huge issue and change in I don't know, I haven't seen an SPC, including me, who has has been able to do that on on their own. It really requires, like, I mean, that's, that's a big change that requires a, you know, everyone from finance, accounting, internal audits, external audit to be involved, to even make those kind of adjustments, and doing that without having agile teams in place, I think is, I don't know very, a very weird one, so, but given the situation where you do have agile teams in place and agile with these trains. What I noticed is that I've, I've been parroting the mantra that I've heard from Joe Fauci, one of the say fellows where he I've heard him say this many times, money allocated does not equal money spent, and that's, that's one line. That one line got me the seat at the that many lpm tables, to at least start the conversation, to also look at our the way we we, you know, budget and fund a. Our projects and our initiatives and our products. So money allocated does not equal money spent. But in my experience, the situation is still that due to the aforementioned regulation and legislation, projects are the things that are being funded. So if projects are the things that are being funded and simultaneously you have agile teams, well how do you do that together? And I think that is, you know, that's where my grumpiness comes from. We very quickly overlook that very, very often we're saying, well, we shouldn't do that. No, we shouldn't fund projects. We should fund products well, but the situation very often is that we can't change that. So we need to find a bridge between traditional project funding, which is sometimes unchangeable or not easily changeable, and the other side, agile teams and agile lease trains and value streams. So how do you how do you bridge that? And for this one, there is, I'll mention that in a second, but there is a really nice example, which is also on YouTube, from Sharon bridal and from Gail garmonez, both from from the company Air France, KLM. There's a little YouTube video about exactly this, how they at Air France, KLM implemented lean portfolio management within one of their largest divisions. Had the opportunity to help out in at that time, the video is, I think, published in 2019 or so, recorded at Ali onsen, which is a conference about agile, and it is held at the Sen, which is in Paris. So Ali en where they really, they're really open about how they've implemented lean portfolio management within the context of Air France scale Lab, which is really fantastic, which also means that they still have traditional project funding, because company that big, spanning multiple countries, we could have France, Caleb, you know that they, you know, there's a lot of processes and audits and whatsoever in place, but still, they found a way To match the two things together, and that works really, really well. And it's still coming back to money allocated does not equal money spent. So I'll talk a little bit more about that in a second, because what I think they did over there was brilliant. But coming back to, how would I Where? Where would I start? I would start with where you are, which is typically project funding, and start with just making sure that agile teams are are in place before changing all of these financial and accounting standards. It is, is just a lot of additional headache. May

Stephan Neck: 28:04

I be a little bit provocative, Ali, I would even say, you don't, you don't need agile teams. You already have teams if you start talking about a portfolio, right? Because somebody is doing the work. So clarifying, visualizing who's doing the work in what way, showing what kind of work system topology you have is a good base to then start talking about, how do you coordinate? How do you collaborate as is, and how do you transition in a targeted situation where you then start introducing new topics, new ideas, or tackling those, those, yeah, different situations, different things that you already mentioned. I'm, I mean, I'm even moving away from, should we have agile teams? Yes, or No, no, you have teams. You have people doing the work on a daily basis. Start with what you've got, right? Yeah? I

Ali Hajou: 29:00

see what you mean. Yeah, I see what you mean. But what I'm just triggered about is trying to manage your portfolio, which might contain projects and epics and whatsoever, but having a very fluid, let's say, part of the organization. That actually does the work. So that means, if we're all of a sudden become way more variable on the level of projects or epics, you know that and but not have stable teams, it means that on a much more frequent basis, we're going to readjust teams, because, you know what, we've decided to stop this project, which also means we decided to stop this project team, which means we're going to start another project, which means we need another project team. So all of a sudden teams are there is a risk that, I see that teams are being pulled away from each other, so engineers and you know it's. Members and people you know, the software magicians and the our hardware enthusiasts. You know, they're pulled away from each other on a much more frequent basis. And I think that is, in the end, something that in at least in my environment, that is something that I really would like to prevent.

Mark Richards: 30:18

But I'm going to take a quick segue on that one. And I think my segue is in if you take an existing portfolio rather than inventing one, it's probably going to have a mix. It'll have some agile teams, it'll have some other things. And if you come back to visualize everything and taking that systems level view, I had a coaching conversation. I was mentoring a coach earlier this week, and I said, Sometimes you've got to be a slightly evil coach, and you've got to find a way to generate the metrics that help move the conversation. And if you can start a portfolio with a blend, and you can start to generate visibility, you might be able to start to show the data about how much better the places where you have stable teams perform than the other ones. And this, for me, it's all I want to iterate. I don't want to waterfall my lpm. And, you know, iterating the operating model within the lpm might be an example. How do I find small experiments, like, if you think about changing funding models, changing funding models is scary. If it's a real portfolio, you're probably talking about hundreds of millions of dollars. And you know, how do you know, how do you change your funding model on that? And the big challenge I find with Lean portfolio is it's so sensitive, and there's so much strategy and money involved. Companies that have done it find it very difficult to talk about what they've done. And you know, people say, give me an example. I was like, Oh, I wish I could. But every now and again, I get a company who gets up on stage and shares a bit of their story, and I go, fantastic. I can share it now. My favorite example of this was an experiment Australia Post ran where they created what they called the Winterfell fund, and they were still dominantly project funded, not completely project funded. They were trying to create stable, agile teams in their digital world, and they were working some magic behind the scenes to go let's make sure that when the pro this project comes to an end, we've got another project ready to keep feeding our agile team so we can keep it together. But it was difficult, and they had these lulls where there might be in a sprint or two because of gating processes. And so they went to finance and they said, Look, can we get an allocation of a bucket of money that we can draw down on when we've got no project worth driving our teams to take care of minor enhancers, we've got a huge backlog of possibilities we could do that that you know, hadn't been bundled into projects and they never get attention, we'll be really disciplined about what we do, about the benefit data. And if you can give us that bucket of money and we just draw it, draw down and keep our teams alive, we'll come to you at the end of the quarter and we'll say, this is what we achieved with it. And if you're happy with what we achieved, you'll top the bucket up again. And if you're not happy, we'll go, Okay, well, the experiment. Yeah, we thanks for letting us experiment. And their code name for this was the Winterfell fund, because winter was coming for their agile teams.

Ali Hajou: 33:11

Nice, the experiment, and then some dragons and some blazing Fire. It

Mark Richards: 33:17

was, it was glorious, but the experiment was beautifully successful. And in the beginning it was quite a small amount of money, and we're talking about a semi government organization here, right? And you think about finance and a semi government organization, but a couple of years later, they were capacity funding all their arts, right? They'd moved out of the project funding model into a capacity funding model, but they did it because they ran experiments, and they generated proof points and confidence, and then they ran bigger experiments. And that for me, I think the secret of generating that change,

Stephan Neck: 33:46

listening to you Mark triggers something in my head. There's different discussions with different groups of people. The experiments you mentioned is for the existing teams, or the newly formed agile teams, how to get there from one stable stage or condition to the other, right? But with senior management, we probably have a different discussion about what is, what is the future situation, what is the targeted situation based on the intent, which then is, as you mentioned, Mark, it's a huge learning curve for us as coaches, understanding what these people are dealing with on a daily basis. And if it comes to senior management, that's a whole different world that's not applying some agile activities or methods or practices, it's a different world. And learning on that is, is pretty crucial for me as well, and and this discussion then tends to go towards where is the most needed alignment, and where is probably the biggest impact based on your biggest pain points you have, and that's that's a different discussion, but I like the. Discussion, because that shows the way into the future and how you kind of support and and maintain a continuous improvement on on the portfolio level,

Nikolaos Kaintantzis: 35:13

that's great. I would like to throw a timeout question. We talked about cool stuff, but the audience normal SPCs, maybe not so much experience in portfolio, who is listening and say, wow, they are too cool stuff lets me go also for detour and try something out, or whatever. What is your advice on new SPCs who start with lpm, because the stories are great, but some kind I'm a little bit afraid of people now saying I can do whatever I want, because those guys are doing anyway, whatever they want. So what is your advice to to you fresh SPCs doing first time? Lpm, it's a time out question, Eric,

Mark Richards: 35:52

we got to start with Mr. Grumpy here.

Ali Hajou: 35:54

Yeah, Mr. Grumpy is going to talk. Yes, I'm gonna go back to the example from airfield, Air France, KLM, why? Because I think what they did over there was genius. Just like in many big companies, there is a annual budgeting cycle. That's sort of where you are. That's where you start, typically and having agile teams in place, and also some traditional projects as well. What was organized was a sort of a, let's just call it a sync session, to just understand, what are we doing with her, with the money, and we started to plan that once and prepare that quite well to really understand, you know, for the upcoming year, we have this amount of money as our innovation budget, and for the upcoming quarter, this is sort of what we're going to work on across these multiple projects and multiple value streams. And inside of those value streams, we had all streams, we had arts, but we also had some some standalone teams, but sort of, this is the overview, and we made a sort of an exercise out of it that looks very much like a one day pi planning. And during that exercise, and much more. It's just the details can be found in the video on YouTube. Much but what will what is done in that exercise is to understand what the budget is for the upcoming quarter, which is basically the entire year, but then, you know, you split it in four and understand what the budget is for the upcoming quarter, and then just see whether the scope that was initially imagined with all of the projects and all of the epics and whatsoever fits in the capacity that we have, so therefore in the so called budget that we have, that's how it started with actually quite a small group of people. I think it was about 50 or so. Obviously, quite a lot of issues happened over there because you saw that. Oh, well, we're trying to do a million things simultaneously, but we, you know, are we over planning anything? Exactly the same happens in normal pi plannings, but we did this with budgets instead of, you know, the capacity and sprints of teams. And we did this with epics and projects in instead of stories and features that we, you know, do and normals. So after doing that once, which was really much more of a sync session, you know, looking at just whatever information is already in existence, after doing that once, we've asked, Would you like to host this sync session again next quarter? And from the top of my head, 95 or 96% of the respondents, people that were there, said, Yes, please. Let's do that again, because we understood very quickly that some projects have been consuming way more capacity budget than others, way more that it was intended to do, it to be and we had to stop them. And, you know, stopping a project has a requires a ramp down, so that takes a while. And just those insights alone were fantastic. And then the second time, a quarter later, was was being hosted a much more looking at how would we fund, I mean, if we have budget, I mean, the budget is already allocated, but how would we fund the epics, essentially, right? That's, that's where Joe Fauci mantra comes back again, that money allocated does not mean money spent. So you can sort of reallocate in a way. We started to do that on a quarterly basis, and we took it from there. But the first you know, where would I start? I would start to get clarity and visibility about the money coming in and how the money is being being spent. And there. For we need to get a total overview of what you said, Niko, of all of the projects that are on the ground, that are flying, that are going as a rocket ship, as sort of the expedite through the system, get that visibility and in a way, confront everyone about how budget is being allocated. And that doesn't have to be done with 50 people. It can be done with 10 or with five. Those insights will generate the traction. And I think that was a really nice way to start the entire lpm journey. Great.

Nikolaos Kaintantzis: 40:34

I take with me. You start where you are and to continuous improvements. Stay with the basics, principles you have, and continue great other tips for fresh SPCs.

Mark Richards: 40:44

So I'm going to jump in with my two coaching mantras that I live by, and they're both from Jerry Weinberg, and one of them is help people see their world more clearly, and then let them decide what to do. And it's back to Niko comment about visualization. It's actually the backdrop of what Ali just talked about became an opposition. How do you help them to see something they haven't been able to see before? And you're not suggesting the action, you're helping them to see it, and you're letting them figure out what to do. So that's Advice number that's advice. Number one, right advice? Number two, back to Mr. Weinberg, know how is great, know when is better. You've gotta know your timing, and you've gotta learn to take 99% of the things you wanna do and put them on the backlog and find the 1% the one idea that people are ready to step into. I

Stephan Neck: 41:42

like that. You probably see my glowing eyes, and it pays into what just Mark said, and one of my mentors taught me this, this very good advice, you have to listen, not to respond. You have to listen to understand. And that was was hard for me at the beginning, and I'm getting better every day to listen, to understand.

Nikolaos Kaintantzis: 42:05

I think there's a great advice is, because what I see at young fresh SPCs is they're trying to convince people doing something, and they have not so much experience in lpm, and they don't have the jargon, the vocabulary people using there. So my tip is the first time, just be an assistant, not the head coach. Learn about how companies work, how they speak, how they behave, and then when you understood them, you can try to be one of the people leading it. And by the way, for me, portfolio is not something. Oh, now I earned it, because now I have more batches. I'm now a chief captain or whatever, is still just coaching work we are doing. So I love doing portfolio work, but I also love introducing Kanban to teams. So it's not something. We are not better because we're doing portfolio stuff. It just it happens we're doing portfolio stuff. So it's, please, dear SPCs out there, don't say I want to be a portfolio coach, because it's something better I have to do to go up the hierarchy. It's not the going up, it's just the same job, just with different language and different things you have to

Ali Hajou: 43:14

do. Oh, what it's it's not a promotion. Niko, and then I need to update my LinkedIn profile.

Stephan Neck: 43:20

No badges today. Mr. Grumpy, no badges.

Nikolaos Kaintantzis: 43:27

Oh, let me ask one last question. What did I miss with all the triggers? Mark, sorry,

Mark Richards: 43:32

no, I'm just being naughty. I just, I just turned Ali into a temporary safe fellow because he needed a promotion, right? I Yeah,

Ali Hajou: 43:44

thank you. I feel much, great, great.

Nikolaos Kaintantzis: 43:48

So we have 15 minutes to go. Did I miss something? We had some side discussions. Did I really miss something in the core you want to add? Feel free, please. We have the time,

Mark Richards: 43:57

okay, I think, and probably just backing up your concept of startup being an assistant. And a thread that's come through here is learn their language. Talk the language of the portfolio you're working with. Don't try and make them learn yours. Eventually you'll learn to translate, but what you want is you learning to translate, not forcing them to learn to translate, and it's a very big language.

Stephan Neck: 44:24

And perhaps based on that, the practical advice, if you visualize the existing portfolio, no matter what it is in there, if it's projects, if it's initiatives, programs, epics, visualize, and then what I've learned over the time is to focus on three points the downstream is, start finishing. Finish the stuff, right. Don't interfere. Let them finish within the quarter, within, within the time frame they are working on those, those initiatives in the upstream, creating new stuff we've learned. Stop. Starting right if you're still with the downstream, stop starting. And that triggers another discussion. And then what I do quite often, I ask the agile teams. I ask the Agile release trains, the value streams, what kind of headboard in brackets or swim lanes or tagging do you use on your compound system that emulates portfolio aspects where you don't get any support or guidance from what you should have? And that, again, triggers another discussion, oh, we missed that. Or yes, we're doing it, but it's not visualized on the portfolio level, and that then triggers the evolution of the guidance we need on the portfolio level. Again, visualize, create big aha moments. Listen to understand, and if you understand, then ask the right questions to move forward.

Nikolaos Kaintantzis: 45:57

Great. Thank you very much. As Mark said, sometimes I mix things up, and I looking for surprise in moderation. This time I would like to continue with the Grow measure and grow for me in the prep. I was surprised that some things were not were not selected, but I just give you the word. What have you selected for a measure and grow. Ali, please yours.

Ali Hajou: 46:21

Oh, yeah, this was, this was kind of kind of a tough one. I need to go back to, to the measurements themselves, because whenever we talk about Lean portfolio management, there is actually a lot of things that can be measured simply because, you know, you have the three essential collaborations. But I've, I tried to search for something that would be easy, like an easy start, where we where would I start? And so I scrolled all the way down, and I saw the measurement that we match the we matched the demand to capacity by limiting the numbers of epic in the portfolio combat. So because, if you have the ability, so if you found a process, technique, trick, I don't know, to really understand what your capacity is, and also have a total overview of the demand, which is your mantra. Niko, visualize, visualize, visualize. If you have those two things, those two data points, then things can be matched. So are we able to do so? If so, then there is the ability to learn and understand and to reflect, and therefore also to understand that maybe we are over asking, and if we're if we're not able to do that yet, then I guess that we might have sort of zombie scrum on portfolio level, because we're, you know, we're acting without data. So I thought maybe that would be a good measurement to start with. I'm

Nikolaos Kaintantzis: 47:53

so thankful for explanation, because I stopped reading off the mountain capacity, and then I didn't realize what the great metric it is. Thank you for explaining it. I really stopped reading it. Nothing for me.

Mark Richards: 48:07

The funny thing, Niko is, if that metric had been limited to we match demand to capacity, it might have been a contender for my vote, because if you think about all the stuff you've got to do to actually match demand to capacity, and all the glue and the visualizations and the connections and the conversations you have to get a good supply and demand match like, what do you

Ali Hajou: 48:32

think about all that data from PMO? And that's

Mark Richards: 48:36

that's magical, but it's a lot more than just limiting the number of epics in the portfolio came back. So

Nikolaos Kaintantzis: 48:44

why have you chosen something else? Mark, look,

Mark Richards: 48:47

I'm going to also chip in right picking one Measure for Measure and grow when there's 25 measures for this dimension was a pretty big ask. But, you know, I lensed into, and I should probably put us on the view for screen sharing while we're chatting about this. I put us on we ensure our business and technology leaders are aligned to the portfolio strategy. And at the end of the day, if your leaders aren't aligned, problems are going to happen. And if I distill one thing down in the portfolio, one job to be done for the portfolio. It's helping the leaders establish and maintain alignment. And whether that's alignment, about strategy, about priorities, about goodness knows. But if you can get your leaders on the same page and enable them to stay there, amazing things will happen. That's why I picked that.

Nikolaos Kaintantzis: 49:41

And now how do you measure it? Sorry.

Mark Richards: 49:48

You remember vote. You ask your leaders, are you aligned? Right? If they give you a thumbs up, life's good,

Nikolaos Kaintantzis: 49:55

yeah, 150% of the leaders think they are aligned. Yeah? Stephan.

Stephan Neck: 50:01

Right? And that's exactly why I chose we respond quickly to changes that require our portfolio strategy to be updated. Why is that sometimes I'm being mean and naughty. As a coach to measure if we are aligned and if we can then act on changes and opportunities, I ask this question, okay, here's your compound system, here's your work system topology. Here's what you do if this happens, what is going to be happen in your organization, or how would you act differently, and how fast can you establish this change? Right? That's why I chose this one.

Nikolaos Kaintantzis: 50:42

Yeah, and I'm one beneath you. I've chosen the one that strategic themes describe our portfolio strategy. I love strategic themes. Meanwhile, at the beginning, it was just some sentences. Now it's much more flesh into the bone when we read the safe articles. I really love this. And also what I did with several customers is that each strategic theme has an icon, and each feature who pays into theme has the same icon again. So that's the connection I have, and I can quite cool measure that the most things I'm doing is connect the strategy because it's connected to strategic themes that somehow I've chosen. I've chose, I've chosen this one, and this time I stick to one, because you always love me when I have five stickers. So this is my only one sticker. But I have two questions to you, why we haven't chosen the one beneath, if you go down, establish lean port, 40 guard rails, why nobody chosen we found development value streams rather than projects, and why nobody has chosen our business owners ensure the R code is aligned with the portfolio. Why not? Isn't that so important? Or it's because you have only one vote. You've only got one vote, one vote, yeah.

Ali Hajou: 51:55

And also, I mean, that's typically not where you start. Yes, eventually you're going to look at these things. But it's, I don't know, it's maybe, but that's it. Is also my extreme bias. I really looked at, where would I start? So

Stephan Neck: 52:08

I agree with Ali. It's kind of an outcome. If you start in a good way on the portfolio level, these questions will arise, and then you find the answer together in the right collaboration, in the right group, right how do we fund value streams rather than projects? Because for a long time, you will have a hybrid situations. How do you ensure that that the priorities of the different value streams are aligned with the portfolio? Senior Management will will see that, will touch it, will feel it, and they will feel the pressure, and they will come with solutions within their authority.

Nikolaos Kaintantzis: 52:48

That's the sentence is worth looking for. Mark, yeah, well,

Mark Richards: 52:52

probably just echoing Stephan and adding a couple of words, lean budgets and guardrails are solutions. They're not problems. How well are we maintaining alignment between our business and technology leadership and our portfolio strategy, and how quickly are we responding to changes in the market, they feel much more like business problems. To me. Are we using some solutions? Go figure, we might be using the solutions, but if they're not solving the real problems,

Nikolaos Kaintantzis: 53:22

okay, it's great. And still we have 230 measurements for this dimension, and still they were so missing. The stage is yours. Stephan, what are you missing? What measurements are missing for you?

Stephan Neck: 53:35

Yeah, well, in an ideal world, and we're striving for that one, I would like to have a system that balances three functions on an operational level, the inside view and the now and then, if you consider the whole environment the outside and then what is a targeted situation, and balancing those two dimensions with A governance for information. If I had such a measurement that shows me the different components, how they interact and how they interfere as well, I will be happy.

Nikolaos Kaintantzis: 54:13

Great. Mark, you complained about so many measurements, and still you have one.

Mark Richards: 54:18

I have one, and be an interesting one to measure, but mine was portfolio conversations spend more time on strategic decisions than tactical ones. Because I think the problem I find with most portfolio groups is they spend every time they get together, their time is dominated with tactical in the now discussions, and they don't have the space, the information, the clarity, or the time to actually devote to the strategic questions.

Nikolaos Kaintantzis: 54:48

Great, and mine was slack. In addition to one I've chosen already, I would like to have more this, this traceability to saying I'm paying for I'm paying in for a goal that's more up, but that's somehow. Missed in all this thing there, or I wasn't great in reading, and there was so much I was tired at the end. But I want to have, I want people know why they are working that they say, Okay, this little story here, this feature here, is paying in for that strategic point there, and that somehow was missed, in my opinion, but maybe I was too lazy in reading, closing up, wrapping up this whole stream, this whole discussion, if you have only one sentence, only one sentence, which one would it be to wrap up this episode? Stephan,

Stephan Neck: 55:34

well, if the portfolio would be a party, I would say, don't organize a party if nobody shows up because you don't know your clientele.

Ali Hajou: 55:44

Ali, I'm going to parrot Joe Fauci, money allocated does not equal money spent.

Nikolaos Kaintantzis: 55:51

And in my case, it's one word, one word. Visualize. And if you want a sentence, visualize, visualize, visualize. Now you have a sentence. Mark, I had

Mark Richards: 56:01

a sentence. I needed more than one word, um, remember that the portfolio executive know far more about strategy than you learn before you try to teach perfect

Nikolaos Kaintantzis: 56:10

words. To close this episode, mark you can say bye, bye. For my side, bye.

Mark Richards: 56:16

All right. So that brings us to a wrap. Thank you Niko, and thank you for sparing us Greek islands and lean portfolio management and matches, although we did have a bit of fun with that on Discord, next week, we will be back. The Swiss holidays are over, and we're back on a regular schedule, and we will be continuing the world of Lean portfolio management, and we'll delve into lean governance, and we'll see whether that can make Ali even grumpier.

Ali Hajou: 56:43

Yeah, we'll see about that.

Stephan Neck: 56:48

We'll pull you back into Happy Land

Nikolaos Kaintantzis: 56:52

with governments, of course, all

Mark Richards: 56:54

right, we'll see you next week.