Portfolio Visibility: Do It First.

Many years ago, I worked on a project in which we applied Just In Time (JIT) manufacturing principles to business processes. In this project, the customer, a bank, wanted to improve the efficiency and throughput of their commercial loan processing department.

The loan processing department consisted of about 50 desks, all arranged in neat rows in an open space without cubicle walls. This was pre-internet times, and paper ruled the day. Physical folders and forms circulated in different workflows that made up the loan process. We implemented a range of changes worth writing about, but there is one in particular that I want to highlight here.

We discovered that the placeholder for the folders that made up the Work In Process (WIP) was inside drawers under the employees' desks or in filing cabinets along the walls. The issue was simple, there was no visibility of the workload in the system at a given time, or how that workload was distributed.

We tried a deceptively simple approach: Move all the work in process out of the drawers and place it outside, observable in the open space.

After some rearranging of desks and furniture (yes, your consultant rolled-up his sleeves and got his hands dirty), we ended up with neat stacks of folders in different places. Some located on a corner of the employee's desk, some on key shelves and other places in the open space. Each stack signified a logical set of work waiting to be done. A couple of key stacks ended up on furniture that lay directly outside the glass window pane that surrounded the manager's office. When these key stacks got too big, the manager could literally see the growing problem from his chair. In addition, employees could see each other's queues. If the people handling the initial paperwork screening had an unusually large stack of folders on their queues, then the financial analysis people could see this workload will reach them the next day or two. The department manager would re-allocate resources and skills to attend the largest queues and bottlenecks as needed. What was a black box became, in a matter a few days, a neatly organized white box. Most importantly, the white box was self-sustaining. Because the different queues and stacks were an integral part of physical flow of the work process, a natural side-effect was that the stacks were always updated “real time”. A spontaneous visibility emerged from the system.

In my experience, a change like the one I described above takes place every time you implement a proper automated stage-gate system. Your work in process: concepts, research, development and launch activities end up neatly arranged in the agreed upon portfolio categories and exposed to all authorized users. And just like the bank, because the different processes and categories are built-in inside the natural flow of the product development work, the natural side-effect is that the information is always updated “real time”.

I often hear: "You cannot manage what you cannot measure." I say that we cannot improve what we cannot see. Visibility precedes improvement (and measurement, for that matter). It does not help to arduously work at creating sophisticated metric calculations and clever templates in order to manage a development process without visibility. First, we need to do the necessary work to implement the changes so we can trust that we will see the portfolio (all the portfolio), and that nothing can be left hiding in some forgotten “drawer”.

A few years ago, we implemented Accolade with one of our customers. Shortly after the system was in place, and the first portfolio reports were generated, a key executive looked at the dashboard. He promptly pointed at one of the projects and said incredulously, “Are we still doing this?”

A while ago, the same executive had asked the project in question to be stopped. Obviously the decision fell through the cracks, and the million dollar investment was still there, ongoing, now for everybody to see. Shortly, the remaining investment was re-allocated. So simple is the power of visibility.

In conclusion, one of the most powerful benefits you will experience from day one with a stage-gate system is visibility. With visibility comes the comfort of knowing that all your queues are neatly out in the open and updated as a side-effect of the regular work process. And just like with the bank manager, any growing problem will be right there, in front of your eyes. Now you can confidently improve, measure and, hopefully, relax.

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