Categories: Benefits Realization, Best Practices, Communications Management, Leadership, Portfolio Management, Program Management
By Wanda Curlee
When we talk about project, program and portfolio management, the word “maturity” often comes up. But with respect to portfolio management, the newest of these three disciplines, what does “maturity” really mean?
For starters, it means time. Simply aquiring a portfolio management tool doesn’t align the portfolio to the strategy, as Dr. Mark Mullaly noted in a projectmanagement.com blog post earlier this year. Alignment typically doesn’t happen overnight or even in one year. Implementation of strategy normally comes with organizational change, and most humans do not like to change.
Here’s a look at a typical portfolio management developmental process.
The Early Years
Immature portfolio management practices are normally less than three years old. I think of this as the toddler stage. Getting to the next stage of maturity takes a committed C-suite that believes that a portfolio manager can balance the checkbook while delivering strategic benefits.
Remember, no company or individual has a blank check to fund all projects and programs. There must be mutual trust between the portfolio manager(s) and the C-suite. The C-suite must provide the portfolio manager with the authority and support needed to get real traction.
Traction should follow from a defined governance structure, rudimentary metrics, and programs and projects adhering to the governance structure. As Andy Jordan notes, without successful projects, portfolio management will not succeed. Project leaders need to realize that the portfolio manager drives the organization’s strategic execution.
Project managers may see this as an attack on their independence or worry that a project will be cancelled, Mr. Jordan adds. With a cancellation, a project manager and team may be placed on the bench. Organizational shifts are uncomfortable.
Throughout this state, it is imperative that portfolio managers demonstrate value to project and program managers, according to Mr. Jordan. One way to do this is to constantly communicate to these practitioners that they must see everything they do through the lens of the customers’ wants and needs.
Growing Pains
The next step is what I call the teenager stage. This phase takes between three and five years, during which—as any parent knows—rebellion can happen.
An important way to avoid rebellion is by making sure project and program managers see themselves as invaluable. They have the ability to see opportunities and risks that the portfolio manager cannot see. The portfolio manager must create this dialogue, which is part of maturing in the teenage phase.
Throughout this phase, the portfolio manager is working to overcome the remaining naysayers while tweaking the process, procedures, governance and metrics. This will take time as well, just as it takes a teenager time to mature into a young adult.
Adulthood
The final phase is, of course, full maturity. This is not a time for stagnation—if that takes hold it will be the death of the portfolio management team. Stagnation means the portfolio isn’t nimble or reactive to change—the opposite of agility.
Mature portfolio management means calibrating the portfolio as frequently as necessary to fit a changing strategy. Strategy today is not the strategy of yesteryear. Depending on the industry, the strategy may change every year. If there’s upheaval in the industry, strategy could change even quicker.
Can you fathom Apple updating its strategic goals only every three to five years? I can’t either. Reaching maturity for the portfolio manager means truly understanding the industry, becoming entrenched with the C-suite, making changes to the portfolio management process to increase delivery to the stakeholders. It means being agile enough to understand that change is needed.
During the process of portfolio maturation, the portfolio manager needs to consider portfolio rebalancing. This is a relatively new concept, and it was discussed during a breakout session at PMI’s PMO Symposium last year.
The presenter suggested reviewing the portfolio mix at least quarterly to ensure strategic alignment. The larger point is that, as portfolio management matures, project and program managers should become more comfortable in re-estimating on a quarterly basis. By doing so, those projects and programs that are under-running may give back dollars to the portfolio.
Why is this important? First, it means that excess funds can be used for any projects and programs that are overrunning. But more importantly, these funds can be used to start new projects and programs to deliver increased benefits.
