Validating Investment Opportunities Competency

Which roles would benefit from mastering the Validating Investment Opportunities Competency?

This competency should be mastered by the roles that define Epics and their associated MVPs, and those that make ongoing investment decisions. This includes Epic Owners, Business Owners, Portfolio Leadership, Product Management, and VMO members.

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Learning about the Validating Investment Opportunities Competency

The Validating Investment Opportunities competency describes the critical events, activities, and roles in SAFe, needed to master utilizing MVPs to maximum benefit. Each step in the process shown in Figure 1 is described in more detail below. The article referenced at the end of each step provides additional details.

Step 1: Identify Investment Opportunities

The first activity is to clearly define the potential investment opportunities that will be validated. In SAFe, Epics describe the significant initiatives under consideration. Additionally, an Epic Owner is assigned to manage the associated work.

Assign an Epic Owner
Each Epic should have an Epic Owner assigned. The Epic Owner is responsible for shepherding an Epic through its lifecycle, from ideation to validated learning or implementation. In relation to this competency, the Epic Owner is primarily responsible for the following activities:

• Define the Epic’s purpose, scope, and MVP.
• Collaborate to create the Lean Business Case and hypothesis.
• Guide the Epic through Portfolio Kanban stages.
• Facilitate MVP execution and analyze results.
• Make data-driven decisions to pivot, persevere, or terminate the Epic based on customer feedback

Define the Epic using an Epic Hypothesis Statement:

Epics can originate from two primary sources:

Portfolio: These Epics represent the initiatives needed to realize the portfolio strategy. Often, they are new business solutions, processes, or capabilities.  

ARTs and Solution Trains: Some Epics can originate from Agile Release Trains (ARTs) (ARTs) or Solution Trains, since they have the closest connection to customer needs. If they are large enough or present a significant risk, they also require portfolio governance.

Regardless of their origin, all Epics start with a clear hypothesis statement that defines the expected business results and scopes the Minimum Viable Product (MVP). They are then managed through a Portfolio Kanban system for visibility and tracking. Epic Owners are responsible for guiding these Epics through their lifecycle, working closely with Portfolio Leadership.

For example, consider an airline that wants to develop a website for purchasing tickets. This is a significant endeavor that will consume considerable time and money. Before attempting to design and build the entire initiative, the Epic hypothesis statement template should be used to develop a business outcomes hypothesis, define leading indicators, and gain knowledge regarding the expected outcome.

Define an MVP to Test the Epic Hypothesis

We might hypothesize that the website will help reduce call center volume and ultimately reduce costs to the airline, resulting in better profit margins per ticket sold. Thus, we are assuming that the website will be faster and easier than a phone call to the customer service department.

To test that hypothesis, we could release an incremental feature or set of features, such as an MVP, that allows customers to research flight schedules. We could analyze the call volume and the types of questions the help desk received to validate and measure the features’ effectiveness. Then we could quickly compare the trends of inquiries on the website vs. those at the call center. Additionally, we could build telemetry for collecting data into the feature using DevOps practices and analyzing customer interactions.

Step 2: Test the Investment Hypothesis

Once the Epic has been defined with a clear MVP and an assigned Epic Owner, the next step is to test the associated hypothesis. This is done by applying the SAFe Lean Startup Cycle and using leading indicators to evaluate the outcomes. Both of these are described in more detail below.

Apply the Lean Startup Cycle

The Lean Startup Cycle is a build-measure-learn feedback loop used to validate assumptions quickly and cost-effectively by testing hypotheses through minimal solutions (MVPs).

Rapid experimentation is crucial for validating or invalidating business hypotheses. By beginning with a clearly defined problem and hypothesis, businesses can develop the smallest viable product (MVP) to test their assumptions. Results should be measured using actual customer feedback and behavior, allowing for learning from outcomes. This approach helps organizations decide whether to pivot, persevere, or stop further investment, ultimately fostering continuous learning and reducing the time it takes to achieve value.

Note: The SAFe Lean Startup Cycle is described in more detail in the Epic article linked above.

Measure Progress with Leading Indicators

Leading indicators and innovation accounting provide a metrics-driven approach to evaluate the progress and potential of hypothesis-driven initiatives before traditional financial results are visible.

Leading indicators are essential for identifying early signs of success or risk in projects, focusing on aspects like engagement, conversion rates, and learning milestones. Innovation accounting plays a crucial role by tracking validated learning from Minimum Viable Products (MVPs) and experiments, helping to determine if initiatives are on the right path toward their goals. Together, these tools inform decisions on whether to pivot or persevere, while also improving transparency in investment processes.

Continuing the example from above, the information shown in Figure 4 shows that call center activity has decreased, and website use has increased. These leading indicators demonstrate that the MVP appears to validate our hypothesis. Interestingly, the visits to the site metric by itself might be considered a vanity metric. This metric doesn’t tell us much about our MVP’s success or Epic’s viability. However, placed in context with the other metrics, it indicates where customers spend their time visiting the website.

Step 3: Make a Pivot or Persevere Decision

The leading indicators provide the data needed to make a critical decision. Should we persevere with the investment or pivot to something else? Portfolio Leadership takes the ultimate responsibility for this decision and reviews relevant information on all the current investment opportunities in a regular Strategic Portfolio Review (SPR) event.

The Strategic Portfolio Review and the Portfolio Syncs are recurring events within a SAFe Portfolio, typically held monthly, where leaders align strategy, investment decisions, and Epic priorities. At these events, Portfolio Leadership, with pertinent stakeholders, will assess portfolio progress toward strategic themes and business objectives. They will review the in-progress and proposed Epics for alignment and prioritization. Based on MVP learnings, they will decide to pivot, persevere, or stop. They will also adjust the portfolio vision and backlog based on enterprise context and feedback. Below is an example of what occurs in these events.

The Epic Owner brings recommendations and valid data to these events. The decision on pivot vs. persevere is made while considering multiple in-progress Epics. One common anti-pattern to look out for as you learn and apply this competency is individual MVPs being considered without consideration of the rest of the strategic work occurring.

Applying the Validating Investment Opportunities Competency

Getting started with Epic MVPs as we shift towards Lean Portfolio Management means making some important changes. First off, we need to clearly lay out our epics with concise hypothesis statements that include testable assumptions and leading indicators to measure our progress. 

It’s also important to consider lean business cases as living documents. We should be ready to update them based on what we learn from our MVP experiments. The focus with MVPs should be on quickly validating our hypotheses instead of rolling out a full solution too soon. We have to keep an eye on leading indicators to avoid falling for misleading metrics. Making clear, timely decisions to pivot or persevere, backed by solid evidence and open communication, is crucial.

Additionally, as we assess strategies and conduct portfolio events, we should prioritize learning outcomes and make decisions based on real data rather than just surface-level progress reports. Our portfolio backlogs and roadmaps should be flexible enough to adjust to validated assumptions, which makes them more adaptable and less dependent on guesswork.

Here is a checklist that you can use as you apply this competency:

Validating Investment Opportunities Checklist

1. Define the hypothesis of a new epic using the Epic Hypothesis Statement template: identify the MVP, the expected value or outcome for the target users, and the leading indicator for success.

2. Conduct a hypothesis workshop with the Epic Owner, Architects, and Product Management to refine the statement and break down any assumptions. When evaluating, consider using assumption mapping as your approach. First, assess desirability by asking if customers genuinely desire the product. Next, examine the feasibility to determine if it can be realistically created. Evaluate viability to see if it aligns with your business model for potential success. Finally, address sustainability and risk by identifying any ethical, compliance, or scalability concerns. This structured method will guide you in making informed decisions about your project.

3. Design the MVP by considering the simplest possible version of the solution that tests the riskiest assumption within it. Some examples might be a landing page featuring a sign-up form. Another example is a 3D printed prototype, perhaps, or a small working segment of functionality tested with internal or pilot users. Update the MVP using the Lean Business Case template. This should be a living document that is getting filled out as you learn, not created once in full and then never changed.

4. Establish success criteria with leading indicators and establish thresholds for validation, which should also be included in the Lean Business Case. Set clear decision triggers for whether to pivot, persevere, or kill that will help you and others know when to consider if continuing to spend capacity on the Epic is still the most valuable thing to do in comparison with other work.

5. Run a build-measure-learn feedback loop using a PDCA model. Target a specific user segment and gather data on their usage, engagement, and feedback. After collecting this information, analyze the results to identify what has been proven or disproven and any areas that require further testing. Throughout this process, use the Portfolio Kanban and Portfolio Syncs to effectively monitor the MVP’s status and make necessary adjustments.

6. Bring the right data to align on the strategic next steps, using the portfolio events to align on all the gathered data and insights. Evaluate the results with Portfolio Leadership and key stakeholders. Be ready to share if the epic is meeting its goals. Be excited whether or not the epic is succeeding at its leading indicators, as that means that the people of the portfolio can always be working on the most valuable opportunities. Maintain the lean business case, as well as data tracking tools and qualitative data gathered. 

Validating Investment Opportunities Success Patterns

Here are some success patterns that will help you when applying this competency:

• Start Small: Pick one important, visible strategic initiative (an Epic). Try out the whole cycle – build a basic version (MVP), see what happens (Learn), and then decide what to do next (Preserve or Pivot). Think of it as a practice run.
• Measure What Matters Early: Don’t wait for sales numbers to tell you if you’re on the right track. Figure out what early signs will show you if you’re creating value. For example, will more people sign up for a trial?
• Think Like a Scientist: Instead of just building, think about what you believe to be true about your idea (“We believe…”). Then, figure out how you’ll know if you’re right (“We will know when…”). This helps everyone focus on learning.
• Hold Regular Check-ins: Set aside time after testing your MVP to review the results. Have a meeting where you decide whether to keep going in the same direction (Preserve) or change course (Pivot) based on what you learned. Make this a regular part of your work.
• Build Mini-Teams: Create small, temporary teams with the right people (product, tech, design, customer experts) to focus on quickly building and testing the MVP.
• Share What You Learn: Create a visible place to share the results from your MVPs—both successes and failures. This will help everyone learn from each other.
• Celebrate Smart Stops: Recognize and reward teams that decide to stop working on something that isn’t delivering value, just as much as you celebrate successful projects or features delivered on time. It’s smart to cut your losses early.

Review the following resources to identify opportunities to improve your application of this competency further.

Mastering the Validating Investment Opportunities Competency

Mastering Build-Measure and Learn Cycles applied to portfolio initiatives in a large-scale organization involves embedding a culture of experimentation, validation, and learning into the portfolio management process. Here’s what that looks like:

Portfolio-Wide Application of Build-Measure-Learn: Instead of treating portfolio initiatives as fixed plans, they are viewed as a series of hypotheses to be tested. Each initiative, or Epic, begins with a clear hypothesis statement outlining what is believed to be true and how its success will be measured.

Using MVPs at Scale: Minimum Viable Products (MVPs) are developed not just for individual products but for strategic initiatives at the portfolio level. These MVPs are designed to quickly and cost-effectively validate assumptions. This allows organizations to learn early whether an initiative is likely to deliver the intended value before committing significant resources.

Data-Informed Decision Making: Investment decisions are driven by data and validated learning, rather than assumptions and long-term forecasts. Leading indicators are tracked to gauge the progress and viability of initiatives early on. Strategic review meetings focus on analyzing the data from MVPs, facilitating pivot or persevere decisions based on empirical evidence.

Dynamic Portfolio Backlog and Roadmaps: Portfolio backlogs and roadmaps are treated as living documents, continuously adjusted based on validated learnings. This ensures that the organization remains Agile and able to adapt to new information and market changes. Roadmaps become more responsive and less fixed, reflecting the latest insights from experimentation.

Cross-Functional Collaboration: Small, temporary, and cross-functional teams are created to focus on building and testing MVPs. These teams include product owners, technical experts, designers, and customer representatives, ensuring a holistic approach to validation. This collaboration fosters a shared understanding and alignment across the organization.

Transparent Communication of Learnings: There is a visible, organization-wide system for sharing the results of MVP experiments, both successes and failures. This transparency creates a culture of learning and encourages continuous improvement. It helps prevent the repetition of mistakes and accelerates the spread of successful practices.

Rewarding Learning and Adaptation: Organizations recognize and reward teams for learning, adapting, and even deciding to stop initiatives that are not delivering value. This reinforces the importance of validation and minimizes the sunk cost fallacy. The ability to pivot quickly and efficiently is seen as a core competency, not a failure.

Pivoting for Success at GlobalInsureCo

GlobalInsureCo, a multinational insurance provider, initially struggled with launching large-scale IT initiatives. Due to extensive upfront requirements, they often delivered the wrong product or faced significant delays. This led to financial losses and team demoralization. Adopting the competency of Validating Investment Opportunities transformed their approach.

First, they shifted from lengthy requirements to concise hypothesis statements for each initiative. These statements included assumptions about customer needs and measurable outcomes. For a new digital claims portal, their hypothesis was: “We believe a mobile-first portal will reduce claim processing time by 30% and increase customer satisfaction by 20%.” They designed MVPs to test these hypotheses quickly, such as a basic mobile interface for claim submissions.

GlobalInsureCo established clear success criteria, monitored leading indicators, and held strategic review meetings to discuss MVP data, focusing on learning over status updates. Based on evidence, they were prepared to pivot or persevere. Feedback on the claims portal revealed a need for real-time updates, prompting a pivot to include tracking features in the next iteration, significantly increasing adoption.

Over time, these practices were integrated into their portfolio management. Funding was based on validated learning, and the portfolio backlog was continuously adjusted. They prioritized learning outcomes in strategy assessments and portfolio events. MVPs were used to test desirability, feasibility, viability, and sustainability, involving hypothesis workshops with Epic Owners, Architects, and Product Management.

Success criteria, like 25% flow completion or a 10% signup click-through rate, were defined with explicit pivot/persevere triggers. PDCA feedback loops were used to track MVP states in the Portfolio Kanban. This resulted in faster time-to-value, reduced waste, and better alignment between IT investments and business needs. They celebrated smart stops as much as successes, rewarding teams for learning and adapting, fostering a culture of continuous improvement and data-driven decision-making.

Continuing your Journey Through the Lean Portfolio Management Discipline

Last Update: 12 February 2026