portfolio – Manage Complexity

Cross-functional teams are the ideal of Agile cross-functional teams because of their ability to deliver high value continuously. Dependencies outside the team are proven to be the number one impediment to value creation[note] http://www.managecomplexity.dk/blog/2018/06/28/agile-is-organizational-re-design/ [/note]. Today we don’t just define cross-functionality as developers with different skills: the DevOps movement has brought operations into the teams, and BizDevOps is a common term for bringing business into the teams as well. I am a big believer in fully cross-functional teams, and I believe they can take direct responsibility for business development[note] http://www.managecomplexity.dk/blog/2019/05/23/agile-planning-circles/ [/note].

However, it’s not enough that teams are cross-functional if we desire to create as much value as possible with the resources we have available. It’s not enough that they are efficient within their bubble (e.g. project); portfolio management should make sure that they have the optimal responsibility. We must avoid the vicious cycle of portfolio management. The teams should not only be able to do all the necessary tasks. They should have full lifecycle responsibility for the product; they are developing to maximise their value creation from a holistic perspective.

At the team level, this means that all teams should be Quad-coloured. This article will explain the concept of Quad-coloured teams, which is derived from The Portfolio Circle[note] http://www.managecomplexity.dk/blog/2020/02/14/vicious-cycle-of-portfolio/[/note]. If you’re not familiar with The Portfolio Circle, you should read that article first.

This article will also make it clear how the Portfolio Circle and Quad-coloured teams have a significant impact on how we must think about Portfolio Management in the future.

Project portfolio management is in most organisations all about the strategic projects. Naturally, the focus is on getting as many of these, mostly far too many, projects through the development organisation as possible and spending as little resources on minor functional improvements, upgrading systems/platforms, and fixing bugs as possible because that is considered less valuable. It is rarely understood that the starvation of these other tasks leads to less overall value and congestion of portfolio planning. In other words, strategic portfolio management is an enemy of itself: too many large strategic projects lead to starvation of other tasks, which again leads to even more strategic projects, more starvation, and a vicious cycle starts.

This article will introduce The Portfolio Circle, which is a more holistic understanding of portfolio management, and it will explain why this is a necessary approach for those organisations who want to maximise value for their customers as opposed to just executing single projects.

The goal in developing this model has been to reduce the complexity of portfolio management, and through deliberate simplicity, create a level of understanding that can contribute to a more holistic use of the resources available to create value for users and customers.

Tag: portfolio

Agile Teams must be Cross-functional AND Quad-coloured

The Vicious Cycle of Project Portfolio Management