The 2nd report, in what I’m calling the “Pretty Damn Awesome Portfolio Reports” from PMI is “Delivering On Strategy, The Power of Project Portfolio Management” by Chris Garibaldi, Principal at Deloitte Consulting.
When you boil it all down, portfolio management exists to deliver organizational strategies, and the focus of the report is about connecting the dots between strategy and project delivery. Making sure there is a clear line of sight from the organizational strategy down through each of the projects and programmes is crucially important and this report contains some nuggets that spell this out very well.
There are four main sections in the report, connecting project execution to strategy fulfillment, seek simplicity, create a portfolio minded culture, and develop strong capabilities.
Connecting project execution to strategy fulfillment.
“Effective portfolio management enables organizations to optimize resources in support of the most strategically significant projects and programs.” I love this sentence because it triggers the question – if you don’t understand how each one of your projects contributes to the strategy, how on earth can you know what your priorities are? The simple answer is you can’t! This is exactly why high performing organizations understand what “bangs” they are getting for their portfolio “bucks”, and which project investments are most important.
I’m a stickler for stats and the report refers to the 2012 PMI Pulse of the Profession report highlighting that 62% of projects within organizations that consider themselves to be “highly effective” in portfolio management (which is only 17% of all organizations), either meet or exceed their return on investment. I think that’s pretty low, and we have to be very careful with the interpretation of statistics here because the 2015 PMI Pulse of the Profession stated that the number of “high performing” PPM based companies has remained at 12% since 2012 and the percentage of projects that meet their goals has also remained steady at 64%. So without investigating the source data, I don’t know how this 62% and 64% correlate.
From a personal perspective, if 38% of projects in my portfolio don’t meet their goals I’m going to be one unhappy bunny. Either way, there are two great messages in this report for Executives and these should be spelt out very clearly, in bold.
- Portfolio Management is the only way to connect the execution of an organization’s projects to the fulfillment of its strategies.
- Effective portfolio management supports movement toward strategic goals within a competitive and rapidly changing market.
I love that this is a subject heading and I completely agree, far too often I see people over complicating a portfolio situation when fundamentally all that is needed is an answer to a simple question, “should we invest or not?” – don’t get me wrong, organizations and portfolio management are incredibly complex. However, as the report rightly says, “It has to be as complex as your business is—or, as simple as what’s required. What might be simple to one organization is complex to another.”
From my perspective, portfolio management structures should be designed no differently to any great app – that is, intuitively, seamlessly, beautifully and a pleasure to use.
Create a portfolio-minded culture.
Again, wonderful to see culture as a hot topic in all of the reports. The fact is that culture is defined by the energy projected from leadership, and if an organizations want to get the most value our of portfolio management leadership need to “be” portfolio management, not just “do” it.
I’m pleased that the report also touches on mindset of executives and calls out the mental shift that is needed to move from a “silo” or “line of business” mentality to a holistic, organizational team mentality. I also loved this quote from Teresa Knudson, Portfolio Office Director because it highlights the criticality of building what I call a portfolio delivery community, “My goal is to build relationships with people and groups across the organization to expand their understanding and utilization of portfolio management”
Strong Capability leads to Succeed.
This section is all about the competencies needed to sustain portfolio management within high performing organizations. There’s a useful list of question in the report that every organization should ask themselves, including things like “do you have clear strategic objectives?”, “are you doing the right things to support the objectives?”, and “are you making benefits based decisions?”…
The report also highlights the importance of having the right portfolio management resources in place to ensure the entire portfolio aspects are driven forward. The professional development aspects are a particular interest for me. We have to recognize that portfolio management is now globally accepted as the key to delivering organizational strategy, that more and more organizations are rushing to adopt portfolio management to help them change better and the number of portfolio management professionals is on the up. Therefore the more you invest in the skills of your portfolio people, the more successful you’ll be because no matter what changes people will always be both the brains and the heartbeat of successful portfolio management.
I’ll leave you with my favorite quote from this report by Andy Jordan: “Portfolio Management isn’t something you do, it’s something you are”
If you found this useful, send it to one person who loves portfolio management too.