The general, unable to control his irritation, will launch his men to the assault like swarming ants, with the result that one-third of his men are slain, while the town still remains untaken. Such are the disastrous effects of a siege. —Sun Tzu
Executives are not generals who are irritated. Delivery teams are not swarming ants. However, Sun-Tzu’s metaphor overlays quite nicely on the concept of portfolio management. An organization that cannot manage the demand funnel and does not align its projects to strategies or enterprise goals may end up driving its leadership to irritation. If an irritated leader launches a project, which is not aligned or prioritized, the project portfolio may seem like a swarm response. As a result, these leaders will try to fulfill everyone’s request for everything all at once. To this end, the project delivery engine of the company will seize up, causing projects to fail and team members to pay the price.
The Key Practice of Portfolio Management
I’ve often written about portfolio management and its importance. As a key practice in an effective organization, portfolio practices sit at the very beginning of governance, oversight, and control. Portfolio management reaches beyond information technology projects. Therefore, the more inclusive the portfolio management process, the more robust the views of enterprise spend, resource commitment, value realization, and other operational efficiency metrics will be.
Choosing the Right Projects for Your Organization
Projects should align to organizational strategies and goals, and should be tracked for the results they deliver back to the organization. Otherwise, how would an executive team know if they were running the right projects? One of the first steps to ensure the right projects are selected is to define a standardized and objective set of criteria to assess proposed initiatives against.
While many companies select the right initiatives by listening attentively to the demands of the day, this process does not provide a comprehensive view of the future. Planning for capacity, capability, and future objectives – in an effort to meet the demand of new projects – is critical. However, a long-range and more complete view of demand provides even more choices. For example, how does one choose a HR system upgrade over implementing a new customer-facing application for fulfillment? Can we compare apples to oranges?
The first step to addressing this decision is to develop criteria to assess all projects against. This set of decision-making criteria will enable decision-makers to establish an unconstrained view of which projects rate highest and add the most value, as well as which ones rank lower.
The Three-Part Equation of Portfolio Management
But project selection is only the first step. Portfolio management is more than decision-making levers and a portfolio management tool. To create a robust portfolio management framework, a process and governance must be established (which includes a staged approval).
Through this three-part equation – levers + process + governance – an organization will realize the value of portfolio management. To keep the process of delivery from seizing up, it needs to be maintained and well oiled. Beyond this, there is a need to ensure that what goes into the machine is appropriate. The decision-making levers help organizations vet the right inputs (from the potentially vast array of initiatives in the demand pipeline). The prioritization process and governance are the grease that enables the approach to run smoothly. To paraphrase Peter Drucker, the decision levers help us choose the right things; the grease helps us do those things right. With this approach, we’ll be able to avoid a siege on the project delivery team(s), and we’ll hopefully avoid any project casualties in the process as well.
If your team needs help establishing a process and governance, in an effort to create a robust portfolio management framework, we would love to connect!
