SPM & Agile Coffee Chat-Beyond the Buzzwords – What SPM Really Means

Please note: This conversation was based on peer-to-peer engagement and shared experiences, not formal research. The insights shared reflect personal perspectives from within the community.

Strategic Portfolio Management (SPM) might sound like another corporate buzzword, but as we explored in our recent TBM Council Coffee Chat, it's a vital, low-investment, high-reward discipline. SPM empowers organizations to effectively plan, prioritize, and build towards enduring success, fostering a future-focused strategy that fuels productivity, performance, and prosperity.

Our hosts, Maxim Danilevsky and Jay Hrcsko, guided us through the SPM journey with an engaging and lighthearted "Alice in Wonderland" metaphor, proving that even seemingly dry topics can be both insightful and fun.

What's a TBM Coffee Chat?

Our goal with these Coffee Chats is to create a relaxed space where TBM community members can share real-world insights, ask questions, and learn from one another. It's all about connecting and growing together. These informal, engaging conversations are held every 4 to 6 weeks and typically last about 30 to 45 minutes. They're hosted by fellow TBM community members who are passionate about sharing their experiences and lessons learned. You won't see any slides—just honest, practical conversation focused on the 'how-to's' of implementing and evolving TBM in your organizations. We encourage you to participate—ask questions, drop thoughts in the chat, and let this be a space where you feel comfortable sharing. It's the community that makes these chats valuable.

Key Insights from “What SPM Really Means” Coffee Chat

During our "What SPM Really Means" Coffee Chat, several crucial insights emerged regarding Strategic Portfolio Management and its agile integration:

• SPM as a Strategic Compass: SPM provides the essential link between strategy and execution, acting as a "North Star" to ensure all efforts are aligned towards a clear organizational destination, preventing aimless work.

• Beyond Projects: A Holistic View: SPM is more than just project management; it's an enterprise-integrated process encompassing work, workforce, and finance, requiring cross-functional collaboration and a holistic organizational perspective.

• Culture's Critical Role: Implementing SPM inevitably impacts organizational culture by bringing together diverse perspectives (business and technology); acknowledging and proactively managing these cultural shifts is vital for successful adoption.

• Measuring True Value: Success in SPM is defined by outcomes – building the right thing (customer value), building it right (quality), and building it at the right speed (market responsiveness), along with ensuring the right people are working on the most valuable initiatives.

• Embracing Adaptability & Avoiding Sunk Costs: SPM provides the visibility to recognize when to pivot or stop initiatives that no longer deliver value, enabling organizations to reallocate resources effectively and avoid the "sunk cost fallacy."

Why SPM Matters: Navigating Wonderland's Paths

The core idea behind SPM, as highlighted by our hosts, is captured by the Cheshire Cat's wisdom: "If you don't understand where you're going, any place will get you there." Without a clear destination, organizations risk aimlessly "doing doughnuts" like a ship with a broken rudder. SPM acts as the crucial link between strategy and execution, with finance serving as the "glue" that holds it all together. It's about looking beyond immediate short-term gains and focusing on the long-term vision, understanding your purpose, and knowing where you're ultimately trying to get to.

The "Impossible Things" of Strategic Portfolio Management

One of the key takeaways from the discussion revolved around the "six impossible things" people often mistakenly believe about SPM. It's essential to understand what SPM isn't to truly grasp what it is.

A significant misconception is that SPM is solely about one thing, such as work management, planning, or project management. Instead, SPM is a comprehensive, enterprise-integrated process that also encompasses workforce management and involves various teams, including finance and accounting. The lines between business and technology are increasingly blurred, and organizations need to operate as a holistic entity.

Perhaps the most understated yet crucial aspect discussed was the impact of SPM on an organization's culture. Introducing strategic portfolio management and long-term planning can inevitably cause friction and disrupt existing norms. As Max pointed out, business and technology professionals often have different ways of thinking and incentives, and bringing them together inherently impacts culture and interpersonal interactions. Acknowledging this potential cultural shift upfront can help mitigate its impact.

Measuring Success: Are We Building the Right Thing?

A central question in any new initiative is how to measure its success. For SPM, this boils down to three critical questions, as inspired by Jorgen Hesselberg's book Unlocking Agility:

• Are we building the right thing? This focuses on delivering customer value and growing the organization's worth.

• Are we building the thing right? This emphasizes quality, ensuring that what is built functions as intended.

• Are we building at the right speed? This addresses market responsiveness, avoiding being too slow and lagging, or too fast and creating something without immediate value.

Beyond these, Max added the crucial element of having "the right people working on the right thing". SPM needs to consider workforce capabilities and allocation, as organizations pay people, not products, and understanding the financial impact of resource deployment is integral to a holistic view for strategic portfolio management.

The Inexorable March of Time: Avoiding the Sunk Cost Fallacy

As the Mad Hatter wisely notes, "wherever you knew time as well as I do, you wouldn't talk about wasting." Lost throughput and lost time can never be regained. SPM helps organizations recognize when to move on from initiatives that no longer provide value, even if significant effort or money has already been invested. This ability to "cut bait" and reallocate investments to more valuable opportunities is a key aspect of effective portfolio management, helping to avoid the sunk cost fallacy.

Getting Started: Visualize, Prioritize, Socialize

For organizations looking to embark on or improve their SPM journey, the discussion offered practical starting points:

• Visualize All Work: This seemingly simple question—"how do we visualize all of our work?"—is fundamental. From long-term goals to short-term tasks, having a transparent, unified view of all ongoing work fosters collaboration and identifies opportunities for synergy across different parts of the organization.

• Prioritize Effectively: Deciding what not to do is as important as deciding what to do. Prioritization techniques should go beyond the "highest paid person's opinion" and consider factors like cost of delay and strategic alignment. Understanding the economic model behind investments, including non-financial value such as compliance or employee safety, is crucial for informed decision-making. Additionally, visualizing the type of work (e.g., features, defects, tech debt) can help prioritize a balanced portfolio to avoid long-term platform issues.

• Socialize and Re-evaluate: Regular, scheduled touchpoints for portfolio review are essential. Plans inevitably change, and a continuous feedback loop at the portfolio level allows organizations to re-evaluate their direction and adapt to evolving market conditions, such as the rise of AI. This constant review and adjustment based on reality is key to success.

Another important aspect of getting started is visualizing the workforce alongside the work itself. Understanding who is working on what, their skill sets, and how they are structured (e.g., project teams vs. product teams) can reveal opportunities for optimization and ensure the right people are working on the most valuable initiatives.

Join the Conversation and be part of the SPM & Agile Community!

The "Alice in Wonderland" journey through Strategic Portfolio Management illuminated that, once you "see" the benefits and necessities of SPM, it's hard to "unsee" it. The question then becomes: how can your organization afford not to embrace this critical discipline?

We invite you to continue this conversation and explore further insights. Join the SPM & Agile Strategy Community on TBM Connect! You can participate in open forums, attend future coffee chats, engage with community members, and contribute to valuable assets. If you're interested in joining the workgroup, please apply by  using our application on the community page or  reach out to our community managers, Kaarina, or Jay.

Next Steps: Engage and Learn More!

To continue your journey with Technology Business Management, we invite you to explore our website, log into TBM Connect here, dive deeper into the TBM framework, learn the fundamentals of TBM modeling, and review our latest research here—including the State of TBM report and our ongoing study of TBM salaries. Consider enrolling in a TBM course, joining the TBM Council to connect with a global community of peers, or attending the next TBM Conference to engage with thought leaders driving innovation at the intersection of technology and business. You can also explore our network of partners for additional resources and expertise, and subscribe to our newsletter to stay informed about the latest insights, events, and tools in the world of TBM.

Ready to connect, learn, and grow? Join one of our TBM Strategy Communities on TBM Connect to participate in open forums, attend upcoming Coffee Chats, and contribute to our growing body of shared knowledge!