First, clean your closet – the key to portfolio management

One of the most common problems I have encountered in portfolio management is too many projects and not enough resources. Most people who are feeling this pain often immediately look for a solution that will help them better manage their resources. While this approach is not exactly wrong, it usually fails to produce results becuase it does not address the root cause of the problem: poor portfolio decision making.

As analogy, consider your closet. Or mine, which is a mess. I’ve got too much stuff jammed in there. So I think that I should get a closed organizer. I go to the store and examine lots of fancy organizers. I have fun shopping around and fantasizing about how everything will be neat once I’ve got the right organizer.

This fantasy is a distraction. What I need to do is clean my closet.

Once I’ve cleaned my closet, I may well need an organizer. But it is going to be a completely different organizer than the elaborate fantasy.

Most portfolios simply need cleaning. This comes before organizing.

Ask yourself how many of the projects that are in your portfolio really need to get done? How many really create value for your organization?

I have asked this sort of question a lot, and many companies say 25% – 50% of their projects simply shouldn’t be done, because they are simply not valuable enough.

Part of the problem is that decisions about projects are often made in isolation: “Oh, this looks like a good one, let’s add it,” as if you should simply add every shiny new thing to the closet. I know I have this problem with my closet.

This habit is poor portfolio decision making. Each project decision should be made in the context of the existing portfolio.

How do you know which 25-50% should be cancelled? Answering this question is, I think, the essence of strategic portfolio management.

So before you consider a complex resource management system or PPM or flavor of the month, consider whether or not you need to clean your closet first.