Project portfolio management and strategy go together like a knife and butter. The portfolio is one of the most critically useful vectors for dictating strategy. In a post for the PM Perspectives Blog, Elizabeth Harrin outlines the six principles that make for healthy portfolio management:
- Align strategy.
- Align governance.
- Close projects confidently.
- Lead actively.
- Embrace risk.
- Be transparent.
If there is no clear business strategy and accompanying goals, then project portfolio management is pointless. Get decision-makers on the same page about what the critical objectives are for the business, and make that the basis for project selection. The need for governance will likely end up as critical as the need for strategy though. About that, Harrin says this:
It doesn’t have to be bureaucratic. It just has to be clear. If you mandate steering groups for projects, every project should have one. If you expect project managers to use Earned Value, then they should all be doing it. And there should be processes in place to check that it is happening and put corrective action in place where you see evidence that governance approaches aren’t being followed.
When projects are not proceeding as expected and the benefits of their completion are not looking great, portfolio managers need to drop the axe without mercy. People with personal investment will resist, but if a project has turned malignant, the portfolio manager will have to fight through the protests. Canceling bad projects is important, because it means freeing resources for good projects.
Dropping the axe should only be one way that a portfolio manager leads though. As long as he or she is operating ethically and objectively, the manager should get proactive about fostering change and skill development. Pushing the envelope with the organization’s capabilities will inherently involve risk, but that is okay. Risk is like salt—a good helping of it makes the whole meal better.
But to dissuade others from worrying and to convince people that the portfolio manager is not just a ninny, there should be transparency in why courses of action are selected. Data and knowledge must flow freely. Ideally, people presented with the same set of data will come to many of the same promising conclusions individually.
You can view the original post here: http://www.esi-intl.co.uk/blogs/pmoperspectives/index.php/6-principles-of-portfolio-management/