Leveraging Quarterly Planning in Lean Portfolio Management

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  • 0:04 Lean Portfolio Management
  • 0:51 Quarterly Planning
  • 2:47 Why Quarterly Planning?
  • 4:15 Lesson Summary
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Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

How can companies reduce waste and increase agility through lean portfolio management? In this lesson, we'll take a look at one tool that can help, quarterly planning, and how it can help companies implement lean portfolio management.

Lean Portfolio Management

Charlie is the CEO of a company that makes apps designed to help people with their financial lives. His company is considering developing three new apps: a scam alert app, a savings tracker app, and an investment advice app. But Charlie is worried that it will take forever to get all three apps out. What can he do?

Charlie is thinking about lean portfolio management, which involves balancing groups of products or businesses in a manner that's consistent with lean principles, like less waste and more agility. That is, lean portfolio management is about prioritizing and streamlining organizations that have multiple product lines, divisions, and/or companies.

To help Charlie understand how to implement lean portfolio management with his portfolio of products, let's take a look at quarterly planning.

Quarterly Planning

Remember that Charlie is stressed out because he feels like it will take forever to get all three apps developed and out into the world. How can lean portfolio management help him?

As mentioned, lean portfolio management is about reducing waste. This includes wasting of time. One way to do that is through quarterly planning, which involves reducing timeframes for development and implementation down to three months. Three months is one-quarter of a year, hence the name quarterly.

To understand quarterly planning, let's take a look at the design process. There's a cycle for product development and design. The product cycle is described different ways by different people, but it always includes at least three stages:

  1. Coming up with ideas
  2. Planning the product's design
  3. Developing the product

For example, Charlie's company might spend a while coming up with ideas for new apps, then choose one and spend a while designing a prototype of the app, and finally develop the app itself before launching it to the world.

Traditionally, this product cycle takes a very long time. It's not uncommon for companies to spend six months on the ideas phase, another 6-12 months in the planning phase, and 12-18 months developing the product. This results in a years-long process for product design and development. If Charlie's company follows that timeline, some other app will come along before they can get theirs out.

Instead, quarterly planning is about spending no longer than three months on each stage in the product cycle. That is, a company might spend three months on ideas, three months on planning, and three months on developing. That means that it'll only take nine months from start to finish.

Of course, some companies take quarterly planning even further by combining the planning and developing stages into one quarter. This means there's only six months start to finish. That's much better than spending years developing one product!

Why Quarterly Planning?

Charlie already sees one major benefit of quarterly planning: it gets things done faster. But should he really implement quarterly planning?

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