Mark Mullaly is president of Interthink Consulting Incorporated, an organizational development and change firm specializing in the creation of effective organizational project management solutions. Since 1990, it has worked with companies throughout North America to develop, enhance and implement effective project management tools, processes, structures and capabilities. Mark was most recently co-lead investigator of the Value of Project Management research project sponsored by PMI. You can read more of his writing at markmullaly.com.
Portfolio management is the theoretical bridge between organizational strategy and project delivery. There are many arguments that projects are the means of organizationally delivering strategy and--by extension--that portfolio management reflects those projects that are strategically aligned.
PMI’s standard for portfolio management, for example, says that PPM “provides the means to translate the organizational strategy into a portfolio of strategic and operational initiatives. The management activity ensures actualization of those initiatives through the use of organizational initiatives.” In other words, from organizational strategy should flow portfolios of projects that are aligned with the strategy and produce the strategic results that were being sought.
As far as theory goes, it’s a nice one. The challenge is that in actual practice, it often doesn’t seem to work out that way. While the concepts of strategy, portfolio and project are often discussed (frequently in the same sentence), the relationship of strategy to project and of portfolio to either concept seems to play out differently in reality than it does on paper. Projects happen, portfolios get defined and strategy is formulated, but they regularly don’t occur together--or in the sequence that theory says it should.