Let's take a look the concepts which enable agility in portfolio management.
One important force in any portfolio is the need to innovate and explore new areas for future competitive advantage. Technical innovation and feasibility, however, often emerge from the technical team commonly members at the base of the pyramid. Periodic iterative assessments and all-hands proposal submission processes provide great opportunities for agile portfolio managers to recognize and foster innovation.
Not only will they fill the funnel with great project ideas, they will allow portfolio managers to request funding and support for an idea for one of the future iterations. Agile software engineering with its iterative-incremental practices fits very elegantly with this approach. Resources can be allocated to one or two iterations, so the idea of the project is "tested" before more resources are designated and potentially wasted. An agile portfolio manager can actively influence the future of the portfolio, rather than comparing historical metrics and requesting detailed business cases.
To compliment the assessment of a project, metrics in an agile portfolio management process should support the decision-making and selection process. These should not replace the periodic assessment. Similar to a financial portfolio, a metric must be reduced to the most fundamental but effective amount, for example a stock-quote. If buy or sell decisions are made, more scope can be made available, similar to quarterly summaries of a stock company.
The established metrics need to give executive management insight into the situational health of a project and compare it with other projects. The way metrics are derived must therefore be consistent among all participating projects. Equipped with the review and metric, executives can actively steer and lead the portfolio towards their evolving corporate strategy. A good example is an agile portfolio management process which emphasizes only on one value which allows executive management not only to view the state of the projects, but also of the entire portfolio.
Recently I heard a doctor say "I believe it only when I see it twice." A slightly modified version of it for an agile portfolio manager could be "I believe it only when I see it at least once." Eye-witness observation of progress, first hand information from the project team, and comparisons of visions (corporate versus project) are integral parts of supporting sound decisions. The assessment is a social event between humans demonstrating progress and explaining decisions. As a periodic event, the assessment allows the project team to feed the corporate vision with new innovative ideas for the future. It could transform a command-based "please implement this specification" to an open-forum environment "let me exceed your expectations."
Instead of go/no-go decision points, agile portfolio management opens doors for a more detailed and effective selection process.[iv] Most important, the portfolio should be balanced and emphasize maximizing return of investment. Therefore, newer and more prominent project proposals might compete with running projects for resources. For that reason, running projects might be paused for a very short period of time, temporarily understaffed, and delayed to free-up resources, deployed with a subset of the features, or simply put back into the funnel of proposals for later revitalization. The world of an agile portfolio manager is not black or white.
The pyramid has been used to visualize the dependencies between agility and organizational needs. The four level of agility (corporate strategy, portfolio management, project management, and development) all need to be in place to gain the full benefits of for all stakeholders. Lacking in one or more will break the foundation of the pyramid