Project Portfolio Management – The art of running company change factories
by Mark Kouwenhoven, Director of nThen and Lecturer, Project Management, at Utrecht University of Applied Sciences
As a PRINCE2 Ambassador this artile was published by PeopleCert https://lnkd.in/ewms3S_2 on August 26, 2024. (10 min read)
Portfolio management oversees different projects across functions and even territories and is the difference between strategic success and failure. Like life: it never stops.
The discipline is akin to running the change factory in an organisation – ensuring the right strategic projects are funded and resourced and, more crucially, progressed.
However, it’s common for people to think that it’s only the big projects that fall into the remit of a portfolio management team. Yet, it’s not about big or small, most, or least expensive but about the best set of outcomes, the biggest benefits, the greatest change; and how a roadmap of projects influences the successful delivery of the company strategy.
It’s a critical concept to understand and why it’s important to transpose the theories of project, service and risk management into real life scenarios. Only then can junior project portfolio managers see how their role is pivotal to overall company success.
Turning strategy into reality
PRINCE2 Portfolio Management – (previously MoP) – and PRINCE2 Project Management offer a variety of toolkits to explain the theory of portfolio management to students. In turn, it’s the case studies that bring the learning to life. Indeed, they help add perspective and blend the best practice and guiding principles with the realism and pragmatism that genuine business scenarios need.
The projects the company chooses to progress are about what it must do or change to make the strategic ‘stuff’ happen. Think of it like this. Change is a tool for realising benefits. The outcomes are informed by the strategic objectives, the mission and the vision. These detail the measurable objectives of doing ‘stuff’ to influence growth, productivity and profitability.
IT projects: only part of the portfolio picture
Unfortunately, it’s often presumed that big IT projects are the only ones that fall under the jurisdiction of portfolio management.
Yes, some projects have technical aspects, however the main thrust of the project may be to reinvent a set of processes, establish a new strategic supplier partnership, or even introduce regulatory compliance.
For some companies these might be substantial projects. But what will define where they sit in the portfolio’s priorities is the scale of the benefits they deliver. Sometimes it is the smallest projects that can have the biggest impacts.
This is where portfolio management comes into its own. It brings together a complete view of what is happening, when, how, why, with whom and provides the direction needed to achieve the overall strategic objectives.
Portfolio management is always concerned with the future
Planes, all around the world, take off in different localities and use different altitudes to cross countries. As they come into land, the local air traffic control prioritises planes for landing, whilst also co-ordinating the planes taking off. The aim is to uphold schedules and safety in a way that doesn’t affect the future negatively.
The same is true for a portfolio team. It asks whether projects are being fulfilled in the right order, at the right time, with the right resource.
And, of course, as the portfolio team “lands” one project, it will make “air space” for the next. It’s constantly rolling, in a way projects do not, as they have a start and an end. Yet, we know from the past few years that economics, politics and consumer confidence all influence strategy. So, portfolio teams are constantly moving towards new strategic goals; never standing still and always concerned with the future.
Change needs a culture of its own
I also see parallels in cultural behaviours.
Portfolio teams need to ensure that the decisions they make also underpin a new way of doing things. Culture is so important, because – as many theories will tell you – it’s only when people accept the change as a normal part of doing business as usual that the desired benefits are realised.
However, I always caution portfolio teams to recognise that too much change can be counter productive. There are natural thresholds in terms of people’s and a company’s capacity to absorb change.
At times, it can be useful to use experimental projects to test how it will influence the company dynamics, whereby a six-month project can inform the likely outcomes a longer period of change will have on culture and portfolio priorities.
This understanding can be especially helpful for stakeholder engagement and communication, two core skills every portfolio manager needs. PRINCE2 Portfolio Management and PRINCE2 Project Management, and their respective focus on delivering value, can help guide this aspect of skills development.
Applying life to work in portfolio management
If people want to progress their career beyond the knowledge in textbooks, they should consider how their life experience can supplement their learning.
Our lives are not linear. We make plans day to day, week to week, year to year and work in different environments with different people. We have families to support, friends to have fun with, holidays to take, health to protect, houses to clean. It all needs doing but sometimes we do it in a different order to reach the harmony and balance we need at that time.
Portfolio management is no different and progress must always align to a clear outcome. And so, the skills we possess to live full lives are just as relevant when it comes to career progression.