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    Written by Luke Hohmann
    on August 30, 2018

     

    Recent research from a number of organizations suggests that employee engagement is at an all time low. That's pretty scary, and perhaps somewhat hard to believe for Agile organizations. After all, we're all about "Build[ing] projects around motivated individuals, giving them the environment and support they need, and trust[ing] them to get the job done." (see the Agile Manifesto, lightly edited here). multiple-bafo-1
     
    One of the best practices to increase employee motivation is to involve as many stakeholders as possible in the portfolio management process through Participatory Budgeting (PB).
     
    In this newsletter I'll provide an excerpt from my ebook on Portfolio Management that describes PB and how it can be used in Agile Portfolio Management to help organizations make better choices while ALSO increasing engagement. book1
     
    I'll also talk about Conteneo's philanthropic work in pioneering Participatory Budgeting in San José, CA, and other cities, through Every Voice Engaged Foundation - because hey - if all you're doing with Agile is building better software you're vision for the future is way too small.

     

    Participatory Budgeting Overview

    In Participatory Budgeting, a group of five to eight participants are invited to a forum and presented with a list of 12 to 20 items - for a project portfolio, these can represent projects or capabilities. If you're using SAFe®, these can be value streams and epics. 
     
    Each are briefly described with a name, a description, and an overview of benefits and the projected budget investment (these are the minimal data; you can extend these core attributes as needed). The total cost of these items, estimated or actual costs in varying degrees of precision, reflects the forecasted cost to the organization to fund ALL of items.
     
    Not surprisingly, the organizations available budget is less than the total cost, which means that potentially hard choices about what to fund must be made.
     
    The participants are given equal shares of the available budget (e.g., if the budget is $8M and you have 8 participants, each participant is given $1M). The participants have one mission: fund the highest, most-impactful items.
     
    Since the participants can’t fund all of the items, they must work together to identify the best items. Even more importantly, participants must collaboratively pool their individual budgets to fund projects that no single person can fund (e.g., if one project is projected to cost $1.5M than at least two participants must join forces to fund it), increasing collaboration. The resultant discussion enables participants to re-commit to existing value streams while also making important choices throughout the portfolio.
     
    When the project portfolio has fewer than 20 projects, the same list of projects is presented in each forum. More commonly, there are more than 40 to 100 (or more) projects. In these situations we use either a tournament structure or statistical sampling to select the projects presented to a given group. These approaches further increase the likelihood that players will choose the highest-impact projects because they know they are looking at a subset of the total list. Your organization, in turn, gets the best results because, when all players across all the games select the best projects, the outcome truly will be the best projects.
     
     
    Adding Horizon Thinking 
     
    Effective portfolio management requires us
    simultaneously manage multiple time horizons:
    initiatives in the near term, emerging or growth
    opportunities and long-term innovation. 
     
    Horizon-Thinking
    The Three Horizons framework from McKinsey is an invaluable tool that helps portfolio team make more
    informed decisions.
    Learn how Cisco used Horizon Thinking and Participatory Budgeting to improve 
    Portfolio Management in this Scrum Alliance Collaboration at Scale webinar.
     
    The Three Horizons framework from McKinsey is an invaluable tool that helps portfolio team make more informed decisions.
     
     
    Handling Large Numbers of Players 
    Increasing engagement means getting more of
    your employees involved in the prioritization process.
    Traditional systems make this impossible:
    instant message platforms and teleconferencing
    systems are simply not designed to support large
    numbers of simultaneous collaborating teams. 
    bafo-bigger
    A Weave gala is a group of forums, running
    during a specified time. All participants share the
    same url and Weave will organize participants into groups according to the rules that the producer set.
    A Weave Gala is a convenient way to engage large numbers of participants.
     
     
     
     
     

    Participatory Budgeting Results

    Participatory Budgeting produces both tangible and intangible results.
     
    The tangible results are quite straightforward:
    1. The list of funded projects.
    2. Negotiations that reveal why participants funded projects.
    3. Conditions guiding their funding (such as “We’re purchasing project Phoenix only if it includes the decommissioning of the current sales lead-tracking system.”)
     
    Note that there may or may not be a correlation between the most expensive project(s) and the projects that have the highest impact. In one set of forums we produced for the America’s region of Daimler Financial Services, the players chose the largest and most expensive project. In a different set of games, players from the Africa-Asia Pacific region selected a collection of smaller projects as those that would have the highest impact. 
     
    Intangible results are the set of social relationships and knowledge insights generated in the game. Many Weave customers report that intangible results have the greater impact. 
     
    Here are three [the ebook has more]:
    1. Participatory Budgeting aligns employees to strategy
    2. Participatory Budgeting aligns leaders to teams
    3. Participatory Budgeting aligns teams to each other
     
    Participatory Budgeting aligns employees to strategy
    Consider the results from a VeriSign project, in which a key leadership team project was not chosen by employees in any forums:

     

    verisign-results

    The VeriSign leadership team was shocked with this result! Because they felt that this project was central to the strategic goals of the division, they were certain that employees would select it.
     
    When presented with the data, the leadership team had a choice: skip the project or institute an education plan that more clearly articulated why they chose this project. The leadership team chose the latter and developed a thoughtful education plan that explained why this project was critical for the company. The result substantially increased trust within the organization, and the level of commitment to the project reduced implementation time. 
     
    Participatory Budgeting aligns leaders to teams
    Of course, the opposite situation occurs: when choices employees make run counter to those of the leaders, leaders must take a step back and reconsider their choices.
     
    bwin.party faced this situation when they compared the results of two forums played with the executive teams to the result of four forums played with an extended senior leadership team. Both executives and the extended leadership team in all six forums purchased the top two projects. A mix of senior leaders and executives purchased the next five projects in five of six games.  
     
    Then the data diverged - in a way that created an epic win for bwin.party.
     
    Several projects funded by one or more of the extended leadership teams were not funded by the executive team. In this set of projects we found one highly novel project that was not funded by the executives but that was funded by every extended leadership team. Upon further review, the executive teams felt that they should, in fact, green light this project. 
     
    Participatory Budgeting aligns teams to each other
     
    Consider the following actual chat log sequence from a forum used by a Fortune 500® technology company located in Silicon Valley:
     
    • Oscar: Hi Team, I believe that purchasing the “collecting payments” project would be beneficial to our organization as it enables us to maximize our revenues, and collect fees for services we would otherwise support at no extra cost.
    • Oscar: for a minimal investment, we could significantly increase our revenue
    • Oscar: additionally, the increased revenue would enable our department to open new opportunities for upward mobility
    • Facilitator: Team, it sounds like Oscar is making some interesting points. Will you change your bids based on what he says? Or, do you want to advocate for a different project?
    • Kelli: No, this option is not really helpful for the team I work on, but I can see how it would help out Oscar’s team. 
     
    In the game, Kelli bid on Oscar’s project.
     
    This chat sequence, in which a leader in one business unit voluntarily supports a project in a different business unit or division is shockingly common organizations who use Participatory Budgeting. 
     
    Now, tell the truth: Would you ever expect a leader in one business unit or division to voluntarily support a project in another? Of course not. Traditional prioritization techniques are structured as zero-sum, competitive melees. Managers fight to the end.
     
    You can change that dynamic by implementing Participatory Budgeting.
     
     
    Every Voice Engaged Foundation 
    At the top of this newsletter I made a pretty
    bold assertion about what we should be doing
    with Agile: Making the World Better.
    f5a99e21-e03c-4729-af41-ff864c5cd439
    We do that through Every Voice Engaged Foundation,
    a nonprofit that helps citizens, governments and
    nonprofit organizations solve problems that benefit from effective civic engagement. 
    Every Voice Engaged Foundation produces PB projects for cities like San José, CA.
      
    We target issues that are complex, divisive and multifaceted, bringing ordinary citizens into the conversation with governments, nonprofits and industry to solve challenging issues such as municipal budgeting, community redevelopment and urban planning and natural resource planning. 
     
    We hope you join us.
     
    This newsletter series is focused on Agile Portfolio Management. Hold me accountable if I miss sending you one of these - and let me know if you want me to add something to the series.
     

    Let us know what you think. 

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