Project portfolio management. It sounds quite difficult and complicated, like an advanced science with clear do’s and don’ts. However, many people do not realize that we are constantly making choices both in our private and business lives. We continuously consider what best fits our ambitions and goals. What is possible within the limited time an financial resources that we have. In short, how do we get the most out of life?
That is precisely the essence of project portfolio management. How do we ensure that we do not waste time and money on initiatives that do not contribute to the company’s higher goal but focus entirely on projects that bring strategy to life?
Project portfolio management does not have to be difficult. If your company has a clear strategy and you can tackle any political play that is going on in your organisation, then scoring and prioritizing projects is a piece of cake.
How clear is your strategy?
Asking top management, the answer can be guessed: yes, off course our strategy is clear. Drilling down to managers and employees at the work floor, it becomes less obvious and many will not be able to formulate the strategy or even come up with a different understanding of what top management has in mind. Coming back to projects that are meant to deliver the strategy, it is not surprising that many companies struggle with projects that not really contribute to the strategy or even worse, are actually contra-
Project portfolio management only works if the strategy is drilled down to clear strategic objectives. Clear for every one in the organisations and translated into clear and measurable objectives. So invest in workshops with management at all levels to formulate strategic objectives that can be linked back to the overall strategy of the company and at the same time, are very concrete for specific departments / business units. If not able to perform these workshops internally, hire a boutique consultancy club as the investment will pay off generously.
Are decisions taken objectively?
Politics in an organization is the worst enemy of project portfolio management as it does not allow objective decision-making. In return, choices that have been made cannot be explained to employees which again undermine the motivation and confidence in the leadership team. Politics kills innovation in a company and is one of the biggest barriers to effective project portfolio management.
However, bringing in an structured project portfolio management process, often supported by an application, will make political decision-making more difficult. By scoring projects objectively on the strategic objectives and making sure these scores are transparent, political decision-making is (partly) tackled. It requires the support of top management to use a consistent and structured project portfolio management. Not willing to do so, is as sign that politics is quite strong in your organisation.
In short, no matter how simple project portfolio management can be, the everyday reality is that it requires a great deal of professionalism from an organization. Just as we personally have to demonstrate a certain discipline and decisiveness to make the right choices over and over again, an organization must do the same. In addition to the clear strategy and an objective decision-making process, there are more challenges to come to an effective portfolio management process. Curious? We will tell more about it in our next posts.