Lean Portfolio Management

Correct Answer: Allocating fixed capacity for innovation while maintaining stable delivery streams

Allocating fixed capacity for innovation while maintaining stable delivery streams is the optimal approach in Lean Portfolio Management for several reasons: Key benefits of this approach: - Ensures predictable delivery of ongoing business needs - Provides dedicated space for innovation - Maintains portfolio stability - Enables systematic experimentation - Balances risk and reward effectively Why other approaches are less effective: Establishing multiple parallel innovation streams can fragment focus and resources, potentially compromising both delivery and innovation outcomes. Rotating between predictable delivery and innovation sprints creates unnecessary context switching and can disrupt flow, making both activities less effective. Creating separate teams for innovation can lead to silos, reduce knowledge sharing, and create artificial barriers between innovation and delivery activities. The optimal approach maintains a steady state of both predictable delivery and innovation, allowing organizations to evolve while meeting current business commitments.

Correct Answer: They coordinate portfolio execution and ensure alignment with strategic objectives

In Lean Portfolio Management, Program Portfolio Management Teams (PPMTs) have the primary responsibility of coordinating portfolio execution and ensuring alignment with strategic objectives. This is their key function as they operate at the portfolio level. The correct answer reflects their core responsibility of maintaining strategic alignment while coordinating across the portfolio. The other options are incorrect because: - Managing individual team backlogs and daily scrums is handled at the team level, not the portfolio level - While PPMTs may provide input on financials, they do not focus exclusively on budgeting and resource allocation - Establishing technical standards and architectural guidelines is typically the responsibility of architecture teams or communities of practice, not PPMTs

Correct Answer: Cost of Delay analysis combined with WSJF prioritization

Cost of Delay (CoD) analysis combined with Weighted Shortest Job First (WSJF) prioritization is the most effective method for evaluating short-term, tactical investments in Lean Portfolio Management because: - It focuses on time-sensitivity and economic impact - Provides quick feedback for tactical decisions - Helps quantify the urgency of work - Allows for dynamic reprioritization based on changing business conditions - Perfect for short-term horizon evaluations Other approaches are less suitable because: Traditional ROI calculations are too slow and rigid for short-term tactical investments, requiring longer time periods to show meaningful results. Net Present Value analysis is better suited for long-term strategic investments and requires extensive time to demonstrate value. Balanced scorecard approach is more appropriate for strategic, long-term organizational performance measurement rather than tactical investment decisions.