Creating outcome-based portfolios

Virtual Enablement series: Part 4

So far our Virtual Enablement series has focused on optimising how teams are organised, and how to keep them operating efficiently. Read the first three parts in the series here.

In this article, we explore how outcome-based portfolios can provide teams with a sense of direction and purpose, while still allowing them the freedom to choose how they work to achieve their outcomes.

Achieving portfolio co-ordination

By nature of their end-to-end capability, effective ‘teams of teams’ are empowered to work independently and prioritise work as they see fit. However, as organisations scale and portfolios are developed, they require co-ordination of portfolio outcomes to ensure that their network of teams is prioritising work that aligns with their broad strategic objectives.

All work requires investment from the business, and teams require some level of strategic direction in order for the business to optimise for a return on this investment – otherwise duplication and misalignment of work can occur.

One way in which portfolio co-ordination can be practiced is by establishing an outcome-based portfolio.

What is an outcome-based portfolio?

An outcome-based portfolio is a larger collection of teams tasked with working to achieve high-level outcomes. These outcomes should be prioritised and sequenced in an iterative rhythm, in such a way that achieving each of the outcomes would result in achieving the organisation’s overarching goals.

A portfolio outcome or objective may involve a measurable uplift in market share, customer satisfaction, or any other metric deemed important for the organisation.

To support these portfolios, organisations need a rolling planning cycle which reviews how the outcomes have been achieved and facilitates the provision of direction to teams moving forward.

What could an outcome-based portfolio look like?

The following is an example of how an outcome-based portfolio may look:

Work is guided by the organisational vision and strategic objectives. These inform portfolio objectives, which are typically set across 2-3 years.

Often, teams will also find it useful to further split the portfolio objectives into annual and quarterly objectives, in order to provide good visibility of progress towards meeting these objectives. If a portfolio objective cannot be easily broken down into measurable outcomes on a quarter-by-quarter basis, leading indicators can be used as a proxy instead.

A regular cadence of planning and portfolio co-ordination should be implemented in order to continually prioritise and set portfolio outcomes and objectives. Often, these will evolve as organisational priorities change; this regular cadence ensures that teams can realign their work to these new priorities.

Principles for working in an outcome-based portfolio

From our experience, there is a set of principles that organisations can work to in order to streamline their work within outcome-based portfolios. These include:

  • Allocating the work to the team with the expertise
  • Ensuring all work is time-bound
  • Working on the highest-value item that aligns with the strategic objective
  • Learning to say no and delivering the most value with your team’s capacity
  • Making a habit of finishing work instead of starting new work

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Authors

Jane Fitzgerald, Partner, Enterprise Agility Lead

Jane is a Partner in our Operations Transformation portfolio, specialising in operating model transformation. Jane is passionate about helping organisations optimise the way they deliver on their purpose, and has assisted a variety of local clients in transforming their operating models to improve customer experience and foster business growth. Jane views agility, lean, and human-centred design as critical tools to help organisations thrive in new ways of working.

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Riley Cahill, Analyst, Enterprise Agility

Riley is an Analyst in the Enterprise Agility and Operations Transformation portfolios, with experience supporting the delivery of agile transformations across a variety of sectors. With a background in finance, Riley specialises in the alignment of funding to adaptable outcomes.

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