Earlier this week I watched a webinar discussing the use of Kanban for Portfolio Management. Basically it was being used to add a structure to the process of prioritizing projects for an organization.
It seems that Kanban is enjoying a new lease of life with an ever-increasing range of applications. It really is quite a simple idea and one that started out in supermarkets (shelf-stocking) and became popular in the manufacturing space thanks to Toyota. Essentially, it encapsulates a demand-driven flow (‘pull’) with a replenishment system for keeping the hopper full and thus aligns supply with demand.
In manufacturing, a Kanban system is often used for low-value, high demand parts (eg nuts & bolts, protective gloves, labels, pens etc). One common implementation uses two bins and the system is self-serve from the first bin until it is empty and then switches to the second bin. A key aspect is that the first bin is refilled and replaced before the second bin is emptied. This service can often be outsourced. It should be noted that the number of bins is irrelevant – what is needed is a signal, visible to all parties, that triggers replenishment.
I expect you use a version of Kanban at home; I certainly do. For example, I normally have two cans of deodorant – one in use and one in reserve. When I need to start using the 2nd can then this item gets added to the list for the next regular visit to the store. Of course, you could just adopt the signal of ‘almost empty’ but then a visit to the shops might become unduly pressing…
In Agile software development there is a primary bin containing a prioritized list of requirements to be implemented – the ‘backlog’. The team self-serves from this backlog and gradually progresses the chosen requirements through a sequential set of bins established for other key steps (eg Design, Develop, Verify, Validate, Deploy, Done). The requirement is ‘pulled’ through the system.
The application to Portfolio Management considers the process of migrating ideas to implementation as projects or programs and starts with an “Ideas Backlog”. The next bin would be some form of Evaluation/Selection process that facilitates the promotion ideas to an active assessment of Feasibility. Subsequent bins would address Review and Final Selection. Again, the ideas are ‘pulled’ through the system.
A key theme driving the adoption of Kanban for Portfolio Management is that it can be highly visual and provides a useful overview of the types of ideas being considered, how they align strategically and whether or not they can feasibly deliver value. Additionally, since it is demand driven, there will be clear visibility of the capability of the organization to turn ideas into action.
This concept can be extended into later phases, for example, to consider how a project is progressed from ‘down-selected idea’ (backlog) to business case approval and implementation. There are many software tools available to support the Kanban method and a simple whiteboard and Post-it® notes option also works well so why not give it a go?