In last issue of ValuePoint, we discussed the fourth principle of strategic portfolio management: “Embracing Uncertainty and Dynamics.” When we go through the process of analyzing all the possible dynamics that can come up during the life cycle of a project, we create the opportunity to adjust to the changes, rather than being surprised and negatively affected by them. Now, let’s move on to the fifth principle — that strategic portfolio management is an inclusive, collaborative process. Let’s explore the reasons why.
While many companies do a reasonably decent job of involving project managers and department heads in making decisions that will affect their teams, the process of portfolio management for some companies has focused on the needs of the C-suite executives and management first. Decisions that affect the teams working on projects may be made behind closed doors with little thought put into how those decisions would impact those teams. Access to the data that is used to make those decisions is limited to a privileged few, and project leaders are then handed these decisions with no voice in the process and given the daunting task of disseminating them to their teams, whether anyone liked it or not. By handling portfolio management in this way, stakeholders, project managers — and indeed all participants — are left feeling disconnected and disenfranchised from the process. The work is often viewed as large-scale drudgery and overall morale is negatively impacted.
In the strategic portfolio management model, key stakeholders participate in the process and get a voice. Those people who are most invested in the decisions and motivated to seek the best possible results find the process useful in guiding their work. And the rationale of the final decision that was made is stored (rather than ignored) and becomes a repository of knowledge for supporting ongoing decisions throughout development and commercialization. It’s the difference between facts and knowledge, and it has a profound effect on every aspect of a company’s operations.
Strategic portfolio management process, and the software that supports it, creates a forum for all stakeholders to participate and for the decision-making process and strategy to be communicated openly. All participants have a voice and are able to contribute to the final decision, which promotes individual investment in the outcome. An inclusive process, understood by all, eliminates paralysis through analysis and reliance on spreadsheets that need to be reworked and that are not generally understood by anyone but the analyst who constructed them.
In essence, you want everyone who will be impacted by the outcome of your decision-making process to benefit from it. The more involvement that stakeholders have in the process, the more invested they will be in implementing decisions and the more likely they will be to engage in ensuring success.
To recap, the six principles of strategic portfolio management start with an aligned decision forum that leads to value creation focus. Evaluations are made using credible, comparable data and embracing uncertainties and dynamics. The process is inclusive and collaborative and results in our sixth and final principle, clear communication and learning. Join us next time as we wrap up the series.