In the busyness of the day to day, one area is often overlooked by the leaders of business units, departments and teams. That is the strategic portfolio of projects, initiatives and priorities planned or underway.
Here we explore whether your strategic portfolio is getting the attention it needs and deserves. Based on research, we highlight the tell-tale signs of a portfolio that requires leadership attention.
Have You Got A Strategic Portfolio?
Bundle all those projects and initiatives, programs and priorities together and that is your strategic portfolio. Managing that portfolio should be a priority for leaders, given that it represents an investment of perhaps millions of dollars and countless ‘man-hours’.
Yet for many leaders the strategic portfolio is a dangerous blind spot – they have limited visibility of its size, cost, performance, risk, etc. More important still, they don’t appear to be too concerned about it.
Is Your Strategic Portfolio a Priority?
Few leaders see a direct link between their portfolio or how it is managed, and the performance of the organization, the success of strategy, or the advancement of their careers. Moreover, they don’t see a link between the portfolio and the level of resources efficiency, productivity, innovation or anything else.
The question is: Are you giving your strategic portfolio the attention that it needs? Here is a list of 12 tell-tale signs that your strategic portfolio needs attention:
If one or more of the factors listed below apply to your organization, then your strategic portfolio needs your attention:
Business Needs and Priorities have changed – that makes some projects or initiatives more important than ever, while others may no longer make sense. This is a key reason to attend to your strategic portfolio.
Market reality has changed too with rising market uncertainty and lower growth forecasts. The result is pressure on resources, a diminished appetite for risk and a demand for greater productivity / efficiency. This has implications for all projects and initiatives and how they are managed.
The failure to adapt to changing business needs and priorities is the number one reason why projects struggle or are scrapped. But, how confident are you that projects and initiatives reflect today’s changed business needs and priorities? Later we explore the business fundamentals of the projects in your portfolio.
With so much money tied up in projects – the strategic portfolio is an obvious place to look for savings or efficiencies. Resource constraints and budget cuts are the new norm.
While cuts are happening across the board some projects are more at risk than others. Managers need to attend to their portfolio where questions arise about the efficiency or progress for some projects.
You fear there may be too many projects competing for scarce resources – that is a key reason to attend to your strategic portfolio and how it is managed.
Common sense says that not all projects can or should get the go ahead and certainly not at the same time. However, resourcing decisions around projects often defy the practical logic expected of experienced business managers.
The number of projects has been growing unchecked within many organizations. The result is a proliferation of projects competing for scarce resources. But, the boom years for projects are now at an end.
The switch from proliferation to consolidation of projects and initiatives means more careful and deliberate decisions regarding what projects to support. It entails strategic decisions to prioritize and sequence projects, with the necessary tradeoffs being made.
Typically, there are a lot of initiatives competing for scarce resources. Resources are being spread like peanut butter, with some of the most important projects and initiatives are starved of resources.
People are juggling multiple projects. The result is that projects are not getting enough time or attention. Some project teams appear to be run ragged due to overwork. You don’t have enough experienced people.
The move from project proliferation to project consolidation is key to focus and alignment. After all, there is no more tangible demonstration of what matters to the organization – it’s priorities and commitments – that where is spends its money and the projects and initiatives that get resourced.
Attend to your strategic portfolio if you want greater focus and disciplined prioritization of those projects and initiatives that matter most.
A portfolio contains a lot of projects, programs and initiatives big and small. However, the Pareto Rule often applies -with a few projects or initiatives accounting for the majority of investment, as well as risk and success. So, while you probably want all projects to succeed, some matter a lot more than others.
When business needs and priorities are clarified two things happen:
The first frees up resources (time, talent and attention, as well as money) for the second.
You have less resources to go around – that means you can’t do everything and cuts are required. Some tough choices are required and getting clear in priorities is key.
With priorities clarified, organizations can focus with a new intensity on delivering critical strategies, projects & initiatives. But what do leaders mean by ‘a new intensity’? Well, we hear the following:
All this boils down to the leader’s need for greater confidence around the execution of their ambitious strategies and initiatives.
If the level of progress or momentum behind key projects is slower than expected, then managers need to sit up and pay attention. Early intervention is important to prevent projects going way off course.
You don’t have sufficient visibility and control – the portfolio is a black box.
With so much money tied up in the portfolio and so much depending on its success – the portfolio cannot be left to chance. In reality, however, most managers have only limited visibility or control of the projects, programs and initiatives within their departments or teams.
For many leaders, the portfolio is something of ‘a black box’. For example: they don’t know how many projects there are, how much money is tied up in them, how many projects are performing, how many are not, and the factors that distinguish the two.
If you are worried that there may be some hidden risks or surprises, then attend to your portfolio. This is particularly important at a time when the appetite for risk has fallen.
A strategic portfolio is not just a bundle of investments, but of risks too. Some projects or initiatives may be ‘a sure thing’ others may be ‘a big gamble’.
Getting the balance right, depending on the appetite of your organization for risk, as well as for growth and innovation.
Managing the balance between business as usual and business unusual initiatives is important too.
How confident are you regarding the basis upon which project resourcing decisions are made? For example, are you confident that business logic and strategy determine how resources are allocated, rather than emotion and impulse or sectional interests and politics?
Regardless of whether it is an IT, HR or any other type of project, putting the business first is key. Every project in the project portfolio should have solid business fundamentals. Look at your portfolio to find out.
Do all the projects in your portfolio have a solid business foundation? Specifically, is there clarity and alignment in respect of the business fundamentals – business need, market reality, business impact, business urgency, etc. There is a one-page test to find out.
Linkages and synergies between stand-alone projects are not being leveraged.
Each department or team is running its own projects with attention to how they are integrated. The result is a failure to leverage synergies between projects, with the risk of a disconnect between functional or departmental needs and business needs.
There is little consistency across the portfolio in terms of how projects are evaluated and approved or how they are tracked, reported upon and managed.
Managing projects individually means that you fail to see the bigger picture. There appears to be overlap or duplication across some projects.
Portfolios need to be managed to ensure that the whole is greater than the sum of the parts – that the portfolio is balanced, integrated and healthy. Think of it like an investment portfolio.
Your organization has a patchy track record of successfully delivering projects and initiatives. Project management capabilities, processes or tools are underdeveloped. Perhaps the words ‘project’ or ‘project management’ are a bad word.
Will the projects and initiatives in your portfolio deliver the levels of performance, growth and innovation required by your strategy? That is the million-dollar question.
Bringing the strategy and the vision to life depends on the effective execution of a range of critical projects and initiatives. Yet, the risk of a gap between strategy and execution is all too real. All too often levels of confidence in execution lag behind the ambition of the strategy. Failure to manage the strategic portfolio is a key factor.
There is disquiet regarding the basis on which resources are allocated. Rather than a logical and transparent process for making decisions, politics seems to be a factor.
There are concerns about the bureaucratic hurdles faced by executives in getting important projects approved and off the ground.
Resource allocation decisions are often driven by short term financial expediency, rather than strategy. You are looking to more dynamically align people, resources and projects with the changing priorities of the organization.
Some projects don’t seem to have an end in sight. There is no clear definition of success, with scope continuing to expand.
Scrapping projects is something that your organization struggles with—lots of projects are started but projects are rarely retired.
You have inherited projects that don’t seem to make full sense. These are legacy commitments that need to be re-evaluated in the context of today’s priorities.
There are some projects being undertaken in house that should be outsourced. Some projects are too reliant on expensive external consultants or contractors.
Cover art: Image by Daniel Roberts from Pixabay