bimodal-portfolio-management

Bimodal Portfolio Management And Why It Matters For Your Business

Business / By / October 11, 2023

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

ElementDescriptionImplicationsExamplesApplications
DefinitionBimodal Portfolio Management is an approach that divides an organization’s projects into two modes: Mode 1 (Traditional) and Mode 2 (Innovative/Agile).– Allows for managing both stable, core operations and innovation simultaneously.Mode 1: Routine IT maintenance and infrastructure projects. Mode 2: New product development, agile initiatives.Portfolio optimization, resource allocation, and strategic alignment with business objectives.
Mode 1 (Traditional)Mode 1 focuses on managing stable, predictable projects that are critical to the organization’s ongoing operations.– Emphasizes reliability, efficiency, and established processes.Implementing upgrades to existing software systems.Ensuring the stability and continuity of core business functions through standardized project management approaches.
Mode 2 (Innovative/Agile)Mode 2 involves projects that are exploratory, dynamic, and aimed at innovation or responding to rapidly changing market conditions.– Encourages experimentation, adaptability, and agility.Developing a new mobile app for emerging market opportunities.Nurturing innovation, fostering a culture of agility, and accelerating time-to-market for new products or services.
Risk ToleranceMode 1 projects typically have lower risk tolerance, as any disruptions can impact core operations. Mode 2 projects accept higher levels of risk due to their innovative nature.– Balancing risk between modes to align with organizational goals.Mode 1: Focus on risk mitigation and predictability. Mode 2: Embrace uncertainty and encourage calculated risk-taking.Strategic risk assessment, risk management strategies, and risk-adjusted resource allocation based on project type and impact.
Resource AllocationMode 1 projects often receive consistent, stable resources as they are essential for ongoing operations. Mode 2 projects may require dynamic resource allocation based on evolving needs.– Ensuring the availability of resources needed for each mode.Allocating dedicated teams to Mode 2 projects while maintaining core teams for Mode 1.Resource planning, capacity management, and prioritization to meet the specific requirements of each project mode.
Performance MetricsMode 1 projects are typically evaluated based on traditional KPIs like ROI and cost-effectiveness. Mode 2 projects may use metrics like time-to-market and innovation adoption.– Aligning performance metrics with project objectives and mode.Measuring Mode 1 projects with financial performance indicators. Measuring Mode 2 projects with customer adoption rates.Defining clear success criteria for each project mode and assessing performance accordingly.
Change ManagementChange management in Mode 1 focuses on minimizing disruption. In Mode 2, it emphasizes adaptability and a willingness to pivot based on feedback.– Adapting change management approaches to project mode.Mode 1: Gradual changes with comprehensive training. Mode 2: Iterative changes with continuous learning.Tailoring change management strategies to the unique characteristics and objectives of projects in each mode.

Understanding Bimodal Portfolio Management

Here, Gartner notes that “marrying a more predictable evolution of products and technologies (Mode 1) with the new and innovative (Mode 2) is the essence of an enterprise bimodal capability.”

Put differently, the enterprise does not need to choose solely between an agile approach or a traditional waterfall methodology. Both can be used interchangeably to achieve agility and stability, allowing businesses to successfully expand agile practices into other operations.

Bimodal Portfolio management principles

BimodalPfM combines principles from several existing approaches including DA, SAFe, and SfPfM. 

Here are some of the more pertinent principles:

Senior management commitment

Upper management must champion the value of BimodalPfM by backing up their words with actions and not delegating their obligations to others.

Alignment of governance, customer, and strategy

Active involvement of key stakeholders is encouraged, but portfolio governance must remain aligned with the wider organizational structure. 

Simplicity

The larger or more complex the project, the higher the chance that it will fail. Businesses should use the iterative and incremental nature of agile principles to their advantage.

Flexibility

To continuously re-evaluate opportunities, decision-makers should implement a rolling wave over an annual plan. Too many organizations create an annual plan in the knowledge that major changes are likely to render it obsolete. Agility in this area reduces costs associated with delays, losses, and plan revisions.

Five key components of Bimodal Portfolio Management

While BimodalPfM is an effective strategy, many advocates concede that the bimodal approach can create obstacles to delivery speed.

However, these obstacles can be overcome by considering five key elements:

Dependency management

If a team with the right to prioritize its own work is dependent on others for an outcome, a dependency management strategy should be created to reduce delays. 

Work and delivery teams

How do teams engage with other teams across delivery methods to achieve desired outcomes? Is the process efficient?

Saving time here means that teams clearly and concisely articulate the terms of engagement.

Culture

In the context of BimodalPfM, culture means that staff have respect for alternative delivery models – regardless of whether they are agile or traditional.

There should be more of a focus on practicality and less debate on which method is superior.

Funding

Before beginning, it’s important to clarify funding agreements for work that is being shared by both models.

Recognize that Project Funding and Capacity Funding are different models and as a result, require different decisions.

Decision making

Agile methodologies favor de-centralized decision making which invariably challenges the centralized governance structure common in many organizations.

To increase decision-making speed, it is once again important to clarify the most effective model beforehand.

Furthermore, businesses should always remember that it is in their best interests to make fast and accurate decisions.

Key takeaways

  • Bimodal Portfolio Management allows a business to de-risk agile change management initiatives by utilizing a mix of agile and traditional methodologies.
  • Bimodal Portfolio Management borrows concepts from many other agile frameworks. Primarily, BimodalPfM works best when there is complete buy-in from upper management and alignment of governance, customer, and strategy. 
  • During implementation, Bimodal Portfolio Management can create delivery speed issues. Some of these issues can be overcome by determining whether agile or traditional approaches are best suited to a particular context.

Key Highlights:

  • Bimodal Portfolio Management Defined: Bimodal Portfolio Management (BimodalPfM) is a concept introduced by Gartner to help organizations manage both agile and traditional portfolios concurrently. It recognizes the need for businesses to incorporate aspects of both agile and traditional delivery models to achieve agility and stability.
  • Balancing Predictability and Innovation: BimodalPfM emphasizes combining a predictable evolution of products and technologies (Mode 1) with new and innovative approaches (Mode 2). This approach allows enterprises to blend agile and traditional methodologies for different aspects of their operations.
  • Principles of Bimodal Portfolio Management:
    • Senior Management Commitment: Top-level management support is crucial for the successful implementation of BimodalPfM.
    • Alignment of Governance, Customer, and Strategy: Key stakeholders’ involvement is encouraged while ensuring portfolio governance aligns with the organizational structure.
    • Simplicity: Utilize agile’s iterative and incremental nature, especially for larger or complex projects, to enhance chances of success.
    • Flexibility: Employ a rolling wave approach for annual plans to adapt to changing circumstances and reduce costs associated with revisions.
  • Five Key Components of Bimodal Portfolio Management:
    • Dependency Management: Address dependencies between teams with varying priorities to minimize delays.
    • Work and Delivery Teams: Optimize interactions between teams using different delivery methods to achieve efficient outcomes.
    • Culture: Foster a culture of respect for both agile and traditional delivery models, emphasizing practicality.
    • Funding: Clarify funding agreements for work shared by both models, considering differences between Project Funding and Capacity Funding.
    • Decision Making: Balance de-centralized decision making favored by agile with the centralized governance structure in organizations.
  • Challenges and Considerations: While BimodalPfM can effectively de-risk agile change management, it may introduce obstacles to delivery speed. Businesses must carefully consider context and choose the most suitable approach for various aspects of their operations.
  • Key Takeaways:
    • Bimodal Portfolio Management combines agile and traditional methodologies for balanced change management.
    • It involves senior management support, alignment of governance and strategy, simplicity, flexibility, and other principles.
    • Challenges can arise during implementation, which can be addressed by considering key components and making context-specific decisions.

Connected Agile & Lean Frameworks

AIOps

aiops
AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.

AgileSHIFT

AgileSHIFT
AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

agile-methodology
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

agile-program-management
Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

agile-project-management
Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

agile-modeling
Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

agile-leadership
Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Andon System

andon-system
The andon system alerts managerial, maintenance, or other staff of a production process problem. The alert itself can be activated manually with a button or pull cord, but it can also be activated automatically by production equipment. Most Andon boards utilize three colored lights similar to a traffic signal: green (no errors), yellow or amber (problem identified, or quality check needed), and red (production stopped due to unidentified issue).

Bimodal Portfolio Management

bimodal-portfolio-management
Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

business-innovation
Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

business-model-innovation
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

constructive-disruption
A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

continuous-innovation
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

design-sprint
A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

design-thinking
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

DevOps

devops-engineering
DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

dual-track-agile
Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

eXtreme Programming

extreme-programming
eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Feature-Driven Development

feature-driven-development
Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

Gemba Walk

gemba-walk
A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

GIST Planning

gist-planning
GIST Planning is a relatively easy and lightweight agile approach to product planning that favors autonomous working. GIST Planning is a lean and agile methodology that was created by former Google product manager Itamar Gilad. GIST Planning seeks to address this situation by creating lightweight plans that are responsive and adaptable to change. GIST Planning also improves team velocity, autonomy, and alignment by reducing the pervasive influence of management. It consists of four blocks: goals, ideas, step-projects, and tasks.

ICE Scoring

ice-scoring-model
The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

innovation-funnel
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

types-of-innovation
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

innovation-theory
The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

lean-methodology-vs-agile
The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

startup-company
A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Minimum Viable Product

minimum-viable-product
As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

Leaner MVP

leaner-mvp
A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else

Kanban

kanban
Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Jidoka

jidoka
Jidoka was first used in 1896 by Sakichi Toyoda, who invented a textile loom that would stop automatically when it encountered a defective thread. Jidoka is a Japanese term used in lean manufacturing. The term describes a scenario where machines cease operating without human intervention when a problem or defect is discovered.

PDCA Cycle

pdca-cycle
The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

Rational Unified Process

rational-unified-process
Rational unified process (RUP) is an agile software development methodology that breaks the project life cycle down into four distinct phases.

Rapid Application Development

rapid-application-development
RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Retrospective Analysis

retrospective-analysis
Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle. These are the five stages of a retrospective analysis for effective Agile project management: set the stage, gather the data, generate insights, decide on the next steps, and close the retrospective.

Scaled Agile

scaled-agile-lean-development
Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

SMED

smed
The SMED (single minute exchange of die) method is a lean production framework to reduce waste and increase production efficiency. The SMED method is a framework for reducing the time associated with completing an equipment changeover.

Spotify Model

spotify-model
The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

test-driven-development
As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.

Timeboxing

timeboxing
Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.

Scrum

what-is-scrum
Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.

Scrumban

scrumban
Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

scrum-anti-patterns
Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

scrum-at-scale
Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Six Sigma

six-sigma
Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Stretch Objectives

stretch-objectives
Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.

Toyota Production System

toyota-production-system
The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Total Quality Management

total-quality-management
The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.

Waterfall

waterfall-model
The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous Innovation, Agile Methodology, Lean Startup, Business Model Innovation, Project Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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