Lean Portfolio Management (LPM) is a triad of terms used in Dean Leffingwell’s Scaled Agile Framework®, SAFe®. It is a new type of portfolio management characterized by a strategy for and financing of so-called value streams, agile, iterative working methods and lean management with a focus on continuous improvement.
Lean Portfolio Management differs from classical project portfolio management in these ways:
- work is assigned to staff, not the other way around
- the desired results are defined, not the desired amount of results
- “value” is clearly defined and constantly redefined and value creation is more important than cost controlling
- decisions and plans are discussed retrospectively and at fixed intervals on the basis of new feedback
- budget and financing is flexibly adjusted in short cycles, instead of being fixed annually
- decisions are made decentrally in self-organizing teams
While traditional project portfolio management involves allocating resources to implement concrete plans that are expected to produce specific results, lean portfolio management focuses on assigning resources to a fixed team (the so-called team of teams) so that it can use its resources to implement initiatives. The resulting solutions are continuously evaluated for their value creation.