Absurdity of Budgeting
One day, while I was coaching a project, I realised that the project team would be dissolved after the delivery of V1, and formed again, with different team members, for V2. You can imagine my reaction in front of this absurdity. It looked like nothing could be done. It was not the same year, not the same budget. And until february, budgets are not finished negociating, so continuity of the project was impossible. At that time, I was not aware of movements like Beyond Budgeting, but it still was absurd. Finally, the clever manager managed to keep one team member during the gap between the two projects, using accounting tricks and non-urgent tasks.
Another day, at Lean Kanban France 2012, I heard David J Anderson talking about project porfolios that should be managed as financial products portfolios, arbitrating risk and value. I liked the idea a lot. You start your project telling it will cost 100 and bring a value of 150. Before then end, you revise your risks, and decide it will finally cost 120. At the end of the project, maybe the value will be less, like 140. Thus you may gain 140-120 instead of 150-100. Realy looks like a risky financial investment.
In my distant past in finance, I had a theory about the ideal way to manage a stock portfolio. You invest 10000. You check your porfolio’s value every day. If it goes down, you invest more to go back to 10000 (up to a certain limit at wich you quit investing). If it goes up, you sell stoks, securing your gains, until your invested value (your risk exposal) is back to 10000. To say it briefly, you keep your risk exposure constant and secure your benefits all along.
Thinking about that, and to the explaination of Kanban by David J Anderson in his Kanban book, I was wandering what would happend if a company kept constant its investments (the sum of the estimates of all started projects). If a projects gets in trouble and needs refill, you reduce the budget of others. If a project can be ended before its full end, you stop it and reinvest the budget into others.
The more frequent decisions, to be taken effectively, will need a clear vision. For that, the list of projects should not be too long. This will be made possible by efficient and explicit arbitration between business goals. Thus, in a way, we will have both a constant investment and a constant number of projects, i.e. two WIP limits, one per budget, the other per number.
Since the investment are constant, so his the number of people needed. You keep them all permanently, and move them across projects to accomodate the investment changes. I like a lot the staff liquidity advocated by Chriss Matts during the 2013/4/15 xALEc Hangout.
Agile brings a value driven planning, which will help stop or reduce projects. Agile brings also shared code ownership, which will help move people. Last but not least, to invest and reinvest and reallocate, the weight of history, of obsolete applications, i.e. the debt should be managed and reduced, notion dear to agilists.