Many organizations still rely on annual planning cycles with large upfront budgets, waterfall-style gate reviews, and business cases that are written solely to secure funding. The result is often a massive overload of initiatives, poor quality, delayed projects, and a fundamental disconnect between output and actual business impact. In this talk, my colleague and I share how we introduced Lean Portfolio Management at Zühlke Engineering, what we achieved in our first MVP after six months, and where we plan to go next.
Why Lean Portfolio Management?#
When we look at traditional enterprise planning, we see a familiar pattern: planning for an entire year starts in summer, departments request 25% more budget than they need (because they know it will be cut), and organizations pile on more features than their capacity can handle. This leads to massive quality problems, project delays, and longer delivery cycles.
On top of that, traditional gate reviews with milestones are supposed to reduce risk. In practice, they often increase project duration and risk, because teams end up telling each other what they want to hear rather than what is actually happening. The classic “watermelon” problem: green on the outside, red on the inside.
The deeper issue is a focus on output instead of impact. Too often, organizations measure how many tasks were completed or how many features were delivered. What really matters is whether user behavior actually changed, whether real value was created. Lean Portfolio Management addresses exactly this problem.
SAFe Portfolio Level: Where We Operate#
In the SAFe framework, Lean Portfolio Management sits at the top layer, the portfolio level. Below it are the Large Solution and Essential levels, but for this talk we focus exclusively on the portfolio layer.
A SAFe portfolio consists of one or more value streams. Each value stream has a pipeline with steps, and at the end it delivers value, typically in the form of products or solutions that reach customers. A large enterprise may have multiple SAFe portfolios, while a smaller company may have just one. At Zühlke, we identified multiple portfolios, but in this talk we concentrate on one specific portfolio that handles strategic change initiatives at the group level.
Portfolio Kanban: Making the Flow Visible#
The portfolio Kanban board is the central tool for managing the flow of strategic initiatives. Every large initiative (or “epic” in SAFe terminology) enters the board through a funnel. Here is how the flow works:
Funnel: All ideas are collected here. Behind each idea there is always a hypothesis. For example, if the idea is “we want to sell cat food,” the hypothesis might be “we will increase revenue by 10% if we sell cat food.” This hypothesis statement defines the target customer, the proposed solution, and the expected business outcome.
Analyzing: In this stage, we write a lean business case. Not a 50-page document, but two pages that define the scope (what is in scope, what is out of scope), the MVP, the full solution, and a rough cost estimate using T-shirt sizing.
Backlog: Analyzed epics are prioritized using WSJF (Weighted Shortest Job First), an economic prioritization method.
Implementing: When a value stream has capacity, it pulls an epic into implementation. Here we apply the lean startup cycle: build the MVP, validate the hypothesis. If the hypothesis is validated, we continue building. If it is falsified, we either pivot (adjust the hypothesis and try again) or stop entirely. This is the core principle: quick feedback loops and evidence-based decisions rather than sunk-cost thinking.
The WIP limits on each column ensure that the organization does not take on more work than it can handle.
Zühlke’s Context#
Zühlke is an innovation service provider helping customers across Europe and Asia drive innovation, especially where technology is involved. Founded in 1968, the company is partner-owned and has around 1,300 employees across offices in Switzerland, Germany, the UK, Austria, Eastern Europe, and Asia (Singapore, Hong Kong, Ho Chi Minh City).
This international, multi-country setup makes coordinating strategic initiatives a real challenge, which is precisely why a structured portfolio management approach was needed.
What We Set Out to Achieve#
Our MVP goals for Lean Portfolio Management were straightforward:
- Better decisions: Enable the group executive to make more informed decisions about which initiatives to start, continue, or stop.
- Lean approach: Run strategic change initiatives in a lean way, with hypothesis validation and fast feedback.
- Transparency: Gain a clear overview of all running initiatives across the group. Even though Zühlke is not a huge corporation, it is large enough that the full picture of strategic initiatives was not always visible.
- Strategic alignment: Ensure that the initiatives we pursue actually support the company’s strategy.
- State of the art: Use an industry-standard approach, which led us to SAFe’s Lean Portfolio Management.
We also chose SAFe because Zühlke offers SAFe consulting to clients. By implementing it internally, we could learn from our own experience and apply those learnings in customer projects.
Our Extension: Goals alongside Initiatives#
One interesting extension we made to the standard SAFe portfolio Kanban was adding goals, not just strategic initiatives, to the board. For example, we introduced “sustainability” as a goal for 2022. This goal entered the Kanban board and eventually became both a goal to track and a concrete initiative to pursue.
This dual nature, goals and initiatives on the same board, gave the portfolio team the ability to support both goal-setting and initiative tracking in a unified way.
Tracking with OKRs#
For tracking both goals and strategic initiatives, we used OKRs (Objectives and Key Results). This was not new to Zühlke, as OKRs were already in use across the organization. But we extended their application to the portfolio level.
The structure looks like this:
- Vision at the top
- 5-year strategic goals formulated as OKRs
- Annual goals for the group, also as OKRs
- Strategic initiatives (shown linked to the goals they support)
This created full traceability from individual initiatives all the way up to the company vision. The group executive and even the board of directors found this view valuable, because it made the strategic alignment (or lack thereof) immediately visible.
The Portfolio Roadmap#
Within six months, we built a portfolio roadmap that showed all strategic initiatives with their timelines. Each initiative had:
- A clearly formulated hypothesis
- A lean business case (for the larger initiatives)
- Leading indicators (not lagging indicators like “ROI in five years,” but near-term measures like “within one month we have gained X customers”)
- A monthly status update
The roadmap was stored in Confluence, accessible to every employee. Dark green indicated running initiatives, light green indicated initiatives scheduled to start in the coming year. This gave the entire organization, from the group executive to individual contributors, a clear picture of the strategic change portfolio.
What the Group Executive Said#
After six months, we asked the group executive for feedback. The key themes:
What worked well:
- Transparency was the most cited benefit. Seeing all initiatives with their hypotheses, lean business cases, and status in one place was considered very valuable.
- Cross-group visibility enabled better decision-making about new initiatives.
- Goal integration through OKRs was seen as highly useful. The portfolio team essentially became a support function for the group executive’s annual strategic goal-setting process.
- Traceability from initiatives to 1-year and 5-year strategic goals was appreciated.
What needed improvement:
- Some initiatives needed more rigorous lean execution. Not all initiatives were truly running with hypothesis validation and pivot-or-persevere decisions.
- Development value streams were not yet established, which limited the ability to pull work from the backlog in a truly demand-driven way and to implement value-stream-based funding.
Highlights and Lowlights#
Highlight: Strategic Goals. I cannot stress this enough. If you want to implement Lean Portfolio Management, make sure the strategic goals at the top level of your organization are clearly defined. Without them, the portfolio lacks its North Star. At Zühlke, having well-articulated 5-year goals was one of the biggest enablers for the entire initiative.
Lowlight: Missing Development Value Streams. Without clearly identified development value streams, several SAFe portfolio practices could not be fully implemented, including demand-driven backlog pulling, value-stream-based funding, and a complete WIP view. This was our most significant gap.
Positive Surprise: Goal Integration. Combining goal tracking (OKRs) with initiative management in a single portfolio view was not part of the original SAFe playbook, but it turned out to be one of the most valuable additions.
What Comes Next#
After the first six months, our roadmap for the next phase included:
More rigorous lean execution: Enforce hypothesis validation at regular intervals (monthly or quarterly). When results do not match expectations, pivot or stop the initiative, even at the group level. This requires discipline, because large strategic initiatives tend to develop momentum that makes them hard to stop.
Establish development value streams: This is the key structural change needed to unlock the full potential of Lean Portfolio Management. With identified value streams, we can implement pull-based work allocation, value-stream funding, and much better WIP visibility.
Continue the feedback loop: Apply the same lean principles to the portfolio management process itself. Learn from each cycle and improve.
Key Takeaways#
Lean Portfolio Management is not just a framework exercise. It is a fundamental shift from annual, output-focused planning to continuous, impact-focused portfolio steering. Here is what I recommend based on our experience:
- Start with transparency. Just making all strategic initiatives visible in one place already creates enormous value.
- Define your strategic goals first. Without a clear North Star, portfolio management has no anchor.
- Use hypotheses and lean business cases, not traditional business cases written to secure budgets.
- Focus on leading indicators, not lagging ones. You need to know within weeks or months whether an initiative is on track, not after years.
- Limit WIP aggressively. Organizations almost always have more initiatives running than they can handle. The portfolio Kanban makes this visible.
- Be willing to stop. The hardest part of lean portfolio management is actually stopping initiatives that are not delivering value. This requires organizational courage.
- Adapt the framework to your context. We used SAFe as a toolbox and took what fit our situation. Do the same for your organization.