The minimal portfolio management process

Stuck in portfolio management process definition?

Ever since I first got involved in portfolio management, I regularly encounter cases of “portfolio process definition” projects that seem to last forever. Thinking about this recurring phenomenon, I see some common patterns:

  • the process definition is done by analysts that try to derive business requirements from executives that have trouble expressing these requirements, or
  • the process definition is based on some “ideal world” process model (usually with a top-down, layered process architecture) quite far away from existing practice.

The minimal portfolio management process

From the succesful implementations of portfolio management in our practice of FLIGHTMAP, the following minimal process requirements have emerged:

  • The portfolio is analysed holistically and not (just) project by project, on cost and resource constraints but also on goal alignment.
  • These portfolio reviews are performed in a multidisciplinary team with at least marketing and technology (R&D) involved, and preferably other key disciplines (such as finance and operations).
  • Portfolio reviews are about making the best decision based on the data at hand, not about assigning responsibilities or – worse – blame.
  • This underlying data is transparent and consistent, in a repository of factual information about project plans, status,  market and technology intelligence.
  • This key data is available from individual(s) working in or with the innovation teams (project or team leads, champions, product managers, system engineers etc.)

Another approach: work from the minimal process and improve.

Portfolio managementWhat does this mean for the portfolio management process definition tracks that are stuck in a requirements or best practice analysis deadlock? I have come to see more success from portfolio management process improvements where a much more pragmatic approach is taken.  This includes the following five steps:

  1. Define clearly where and how the current portfolio decisions are taken
    Portfolio decisions are always taken, even if sometimes implicitly. This may be in budget meetings, project kickoffs, strategy reviews etc. Also the strategic criteria for the best portfolio are around, although not all of them may be explicit or verifiable.
  2. Map the gaps to the minimal portfolio management process
    If you can map this current practice on the above minimal requirements, any gaps will show.
  3. Identify the simplest steps to fill these gaps
    So if you have a portfolio review but miss a key function, just invite them to the existing meetings. If you lack a repository, install one and start using it for the meetings. Make sure the individual contributors of the data start maintaining this repository.
  4. Improve as you go
    Since the portfolio management process does not run frequently, it can typically be improved incrementally from one round to the next. Improvements are tied in to the portfolio managers’ real needs for better decision-making.

One of the advantages of this approach in practice is that it immediately helps improve. Waiting for the ultimate process may not be the winning strategy in a dynamic world where innovation speed and agility determine success.

Would this work for you?

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