In a recent webinar I gave, Playing to Win with Your Product Portfolio, we conducted a poll of the fraction of participants’ portfolios from projects that shouldn’t be done. There are many reasons it is hard to kill projects, ranging from indecision, to fear of what “might have been” if a project is killed, to the difficulty of saying “no”, to projects whose target markets have changed, etc. So we would expect the accumulation of some projects that shouldn’t really be done, sort of the weeds of the portfolio. But how much? Maybe 10% perhaps?
Our poll results show that weed projects represent an astonishingly large fraction of the portfolio for most companies. Sure enough, about a quarter of our respondents are in the expected range, less than 20% weed projects. So far so good. However nearly half are in the 20%-40% weeds range and nearly a third in 40%-60% range. This is so astonishing I am going to say it again: Nearly a third of all companies have portfolios that are half weeds!
The cost of such overloaded portfolios is immense: bottlenecks, frustration, delays and failures. Crowded out by the weeds, the projects your company needs to grow and thrive, the roses and oranges as it were, struggle, wither and die.
It is no wonder that one of the most common complaints in portfolio management is too many projects and not enough resources! The pitfall here is that people respond to this problem by resource management or planning methods that are destined to fail. Trying harder won’t work. The root cause of the issue is poor portfolio decision making. Evaluating projects, refining the portfolio strategy, managing uncertainty, dealing with trade offs, and coming to real decisions that stick is the core issue. Portfolio decision making seems to be a big gap for most companies.
Most companies need to pull some weeds, or to use another analogy I have blogged about before, First Clean Your Closet.