Applying Lean to PPM: Lean Project Portfolio Management
Interestingly, lean management represents exactly what we have already seen in complex systems: non-interference in the work of the team. Lean is based on the notion that the person with the most information makes decisions, not the person with the greatest power. In other words, the person on the line, not a previously defined process, decides how and in what manner to tighten screws. Suggestions are recorded, discussed, and implemented in periodic quality circles.
2. Focus on Value
Precisely due to time dependencies (what is the customer willing to pay money for now), it is not ideal to create long lists of project priorities in one go, but rather to use simple lists. Record all projects to be implemented and sort them by hand. Ask yourself and other people with an overview: which project is more important here, what dependencies are there? Do this periodically. Set up the portfolio committee as an agile team that prioritizes projects instead of “user stories.”
Interestingly, this can also result in an increased need for money or resources: if it becomes clear that current resources are not enough, this can be a perfect opportunity to quickly expand capacities and integrate them in the team. The question at this point is not whether the necessary tasks fit within the budget, but whether the potentially achievable value contribution justifies the expense.
As soon as a project team has finished a project or a project substep, it can pull the next project exactly when the team is once again available; not according to a predetermined plan. This can, of course, also be when the portfolio committee has decided to end a project early.
Because such projects flow consistently through the system, the teams are permanently utilized to capacity, but not overloaded. The teams themselves decide who will work on what, and in what order. As a result, the members are utilized to capacity and do not need to waste time waiting through an excessive buffer until the next milestone, or work all night due to poor estimates. If you don’t want to do away with detailed, predetermined planning, it could be worthwhile to take a look at critical chain project management (Goldratt, Eliyahu M (1997): Critical chain. Great Barrington: The North River Press).
4. Pallet Size 1
The minimum pallet size, applied to PPM, consists in providing results as quickly as possible. This means that the review cycles between client and contractor should be kept as short as possible. Pallet size 1 is best approximated when, as in a kanban system, cycles no longer exist, but rather a result is delivered exactly when it is ready. Consequently, this means that there are no more milestones, planning calendars, or large cycles in the organization; instead, everything is processed as quickly as possible without overloading people.
5. Integration of Suppliers
Treat external companies and employees as real members of your organization. Be prompt about making decisions regarding the integration of external resources. This will minimize friction in the event of short-term resource increases. Additionally, think in the long term about the development of your organization and the need for skills in the future. This will help you make prompt decisions about expanding or about opening additional locations.
6. Avoid Waste
As I have already highlighted the seven forms of waste in another blog article, I will only briefly mention that lean emphasizes the avoidance of waste to such an extent because all activities that are not wasteful create value.