Framework, Options and Process

The framework specifies the limits and constraints that a delivery organisation must operate within. If we consider one such section of the framework… Deliver Value within the Portfolio, the obvious constraint is that the Portfolio has a strictly ordered backlog. Note that the framework does not state how the backlog should be ordered.

The decision on how to order the backlog is the responsibility of the portfolio owners. However, given that the portfolio owners may not be experts in Agile Techniques, it is useful to present them with a set of options. giving the pros and cons of each option.

Options for strictly ordering the portfolio in order of preference:

  1. The backlog is ordered with a process that takes account of complexity, informed by a quantitative version of Cost of Delay.
  2. A quantitative version of Cost of Delay / Joshua Arnold’s CD3.
  3. Don Reinertsen’s Wisdom of Crowds version of Cost of Delay.
  4. Safe’s Fibonnacci based version of WSJF.
  5. A value based approach to prioritisation.
  6. HIPPO based prioritisation.

Option 1: Complexity Based Solution, informed by a quantitative version of Cost of Delay

Description: Calculate the cost of each backlog item of interest. Convert the cost to the value that should be delivered expressed in business value metrics. Wisdom of Crowds the idea to work out which is the best for items in the Complex and Chaos domain. Use a quantitative version of Cost of Delay for items in the Obvious and Complicated Domain. Common sense prevails hopefully to order the backlog properly. This is a social structure informed data rather than following a rigorous “equation”.

Strengths: This approach combines the power of Dave Snowden’s Wisdom of Crowds with Don Reinertsen’s Cost of Delay.

Weaknesses: Even Chris Matts cannot find the write up of his piece. Possibly because he forgot to post it. This is an hypothetical ideal solution that has not been tested for a real portfolio.

Further Reading: Links to Dave Snowden videos, and Don Reinertsen books and videos.

Option 2 – A quantitative version of Cost of Delay / Joshua Arnold’s CD3.

Description: A quantitative version of Cost of Delay / Joshua Arnold’s CD3.

Strengths: The approach creates a clear unambiguous ordering of the backlog. Ideal for portfolios in the “Obvious” and “Complicated” domain, such as efficiency innovation.

Weakness: Care must be taken for portfolios containing investments in the “Complex” and “Chaos” domain, such as sustaining and disruptive innovation. May lead to a bias toward efficiency innovation.

Further Reading: Links to Black Swan Farming and Don Reinertsen.

Blah…. Blah…

Option 6: HIPPO based prioritisation

Description: The most senior person in the room dictates the order of the backlog.

Strengths: The most senior person gets to grab all the constrained resources to make themselves successful, but once they do this, they have no excuse if they fail to deliver the value that they promised. This approach is simple to implement, especially in traditional cultures with a high power distance index. The strict order of the backlog makes success or failure transparent and so HIPPOs are likely to support successful ideas after an initial attempt to simple support their own.

Weaknesses: It fails to harness the wisdom of the crowd and limits the IQ and knowledge of the Portfolio decision process to the experience, education and intelligence of the highest paid person in the room. This approach limits the organisation’s ability to grow its a more agile and self organising culture that uses distributed cognition instead of command and control.

Further Reading: Snakes in Suits by Paul Bablak

Organisation can help those pulling together a method by explaining the context in which an option works, and contexts where care must be taken.

Some organisations might prepare “Strip Maps” to illustrate the process that act as the “Easiest to implement” set of methods and tools to satisfy the framework in an organisation. For example

Example Strip Map (Partial)

Executives ensure a balanced portfolio of investments: Cynefin

………..blah…………

………..blah…………

Portfolio Owners strictly order Portfolio backlog: Hippo

………..blah…………

Teams lead time is less than a month: Lean Value Stream Mapping and Kanban

………..blah…………

………..blah…………

Team demonstrate reduction of technical debt: Extreme Programming

………..blah…………

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About theitriskmanager

A IT programme manager specialising in delivering trading and risk management systems in Investment Banks. I achieve this by focusing on risk rather than cost. A focus on costs can lead to increased costs. View all posts by theitriskmanager

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