Applied Lean Agile

Types and Examples

Financial Leverage – Use funding strategy to unlock agility.

Example: Switch from project to Value Stream funding

Governance Leverage – Use lightweight policies to speed decisions.

Example: Implement Lean guardrails instead of heavy approvals.

Strategic Leverage – Focus on few strategic themes that drive 80% of outcomes.

Example: Prioritize portfolio epics aligned to those themes.

Culture Leverage – Foster Lean Agile mindset across leadership.

Example: Model servant leadership to empower teams.

Flow Leverage – Remove bottlenecks in portfolio Kanban.

Example: Limit WIP and reduce delays between steps.

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LPM leaders look for high-leverage decisions — the few changes that will deliver the most value:

Low leverage: Adding more people to slow teams

High leverage point: Fixing systemic bottlenecks in value flow

Low leverage: Approving more projects.

High leverage point: Reduce WIP to improve delivery speed

Low leverage: Controlling budgets tightly

High leverage: Shifting to Lean guardrails and Participatory Budgeting

Low leverage: Measuring output

High leverage: Measuring outcomes and value realization

LPM leaders don’t just manage – they identify where the system’s “lever” are and pull them wisely.

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LPM is built on Systems Thinking, which teaches that:

“Not all actions have equal impact – some points in a system are more leveraged than others.”

A leverage point is a place in the portfolio system where:

A small adjustment (like funding model, governance policy, or prioritization logic) creates a large improvement in speed, or alignment across Value Streams.

Example: Shifting from project-based funding to Value Stream funding is a leverage point – it removes bottlenecks, improves alignment, and speeds up delivery across the enterprise.

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In LPM, leverage means:

Using the smallest, most focused change (a “lever”) at the portfolio level to produce the largest positive impact on value flow. outcomes, or strategy alignment.

Think of it as:

“Finding where a small shift in policy, funding, or governance can move the whole system”

Example: Competence, Learning, Flow, and Outcome are Key Leverage Points (KLPs) in SAFe, in every level (Portfolio, Large solutions, ARTs, Teams). Positive growths in these KLPs – however small these growths are – can move the whole system towards a new and better version of the system.

For example – key prompts:

• Do we need to improve on Competencies? Where? Take a “Gemba Walk” – go and see to observe.
• Are we Learning from feedback loops and experimentations? Are we applying those learnings?
• Are we Flowing value without interruptions?
• Are we achieving desired Outcome?

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Refer to the image above. It is Game 16 of the 1985 World Chess Championship, featuring Garry Kasparov’s masterful deployment of the legendary “Octopus” Knight on d3, a powerful piece that controls eight crucial squares and effectively paralyzes Anatoly Karpov’s major pieces, preventing their coordination and enabling Kasparov’s decisive victory.

A single knight move to a Key Leverage Point (the square on d3) by Kasparov enabled him to control 8 squares and eventually won the game – that’s leverage.

This an in example of “Leverage” – the core idea is always using something to gain a greater advantage or result. This includes putting the right people in the right place of influence.

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Strategy gone wrong

Name a company that is no longer in existence today.

If you were the leader of that company, what would you have done differently in terms of strategy?

The following companies are examples of companies that no longer exist or have declined:

Blockbuster, Kodak, DEC, Wang, Compaq, Gateway, Lotus, Ashton Tate, Borland, WordPerfect, Novell, Sun.

This is an exercise on Strategic Thinking. Strategic Thinking is the ability to see the Big Picture, connect the dots from different perspectives, and make decisions that position you (or your organization) for long-term success.

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8) Probabilistic Thinking

  Meaning: Assess outcomes based on likelihood, not certainty.

Why it matters: Makes strategy resilient under uncertainty.

Example: In portfolio decisions, weigh scenarios and probabilities to avoid “all-in” risks.

9) Feedback Loops

Meaning: Systems where outputs become inputs, reinforcing or balancing outcomes.

Why it matters: Great strategies constantly learn and adjust through feedback.

Example: Customer feedback influencing product design improvements.

10) Compounding

Meaning: Small consistent improvements yield exponential returns over time.

Why it matters: Encourages patience and long-term thinking in strategy.

Example: A culture of continuous improvement (Kaizen) compounds into sustained competitive advantage.

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5) Game Theory

Meaning: Analyze interactions where other’s decision also affect outcomes.

Why it matters: Anticipates competitor or stakeholder reactions to your moves.

Example: A company delays product launch knowing a competitor will overextend trying to beat them to market.

6) Inversion

Meaning: Instead of asking “How can we succeed?”, ask “What would make us all fail?” and avoid those things.

Why it matters: Reduces blind spots and helps build robust strategies.

7) The Pareto Principle (80/20 Rule)

Meaning: 80% of results often comes from 20% of efforts.

Why it matters: Helps focus limited resources on highest-impact areas.

Example: 20% of customers may generate 80% of profits – so you design strategy around retaining them.

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3) Second-Order Thinking

Meaning: Think beyond the immediate outcome to the next and next-after-next consequences.

Why it matters: Prevents short-term wins that cause long-term losses.

Example: Lowering prices might boost sales now but destroy profit margins and brand value later.

4) Systems Thinking

Meaning: Understand how parts of the system interact and influence one another.

Why it matters: Strategic decisions always affect interconnected elements (markets, people, supply chains, etc.).

Example: Improving one department’s efficiency may create bottlenecks elsewhere if the whole system isn’t considered.

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Here is a list of top Mental Models that sharpen Strategic Thinking, specially useful for leaders, coaches, innovators, and decision-makers.

1) First Principles Thinking

Meaning: Break problems down to their most basic truths, then rebuild from there.

Why it matters: Helps you avoid copying old patterns and discover truly new strategies.

Example: Elon Musk used this to rethink rocket costs from scratch rather than accepting industry norms.

2) Opportunity Cost

Meaning: Every choice costs the value of the next best alternative you give up.

Why it matters: Forces you to prioritize what truly creates the most value.

Example: Choosing to invest in a new product line instead of expanding marketing may yield higher returns in the long run.

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