I attended our local PMI chapter meeting this evening and learned the newest buzz "phrase" in project management is "portfolio management". Unfortunately, ours is a pretty new discipline--at least the growth of project management as a management discipline. This leads to the appropriation of other disciplines terms or misdefinitions (risk being defined in PMI terms as both positive and negative risk).
In this particular case the term "portfolio management" has been redefined from the term in use in the investment community to mean:
The process of managing the assets of an enterprise, including choosing and monitoring appropriate investments and allocating funds accordingly.
This definition almost obfuscates the real ideas behind this concept:
1. The process of identifying, approving, prioritizing, funding, staffing, monitoring, and measuring the programs and projects that deliver your business goals.
2. A comprehensive strategy for aligning delivery with strategy, driving strategy to the project delivery level, for realization of business goals.
I'm very, very familiar with the program manager role and the project manager role having done them for quite a few years. This adds a third role, at the executive level of management. Basically, this is the highest level of three interlocking and interactive process loops. At this level executive staff provide "common vision, strategy, goals and direction" and these are translated at the program management office interface to enterprise prioritization, scope, goals, objectives and funding.
As explained to us this evening this frequently means a significant re-alignment of company operational procedure. Key to making "portfolio management" work in an enterprise is clear communication (surprise). Each member of management has to be aware that s/he is no longer working in a "silo" and that anyone at the same level of management or above (and sometimes below) can see how their group/division is doing against goals and other groups in very clear terms. So this introduces an almost unprecedented level of visibility to the modern American corporation.
Obviously, this can engender a lot of resistance among executive staff. Ooohh, accountability. Also key to this re-engineering of corporate dynamics is that management has to accept that not all information will be positive but the delivery of all accurate information--whether positive or not--is to be rewarded and encouraged ("don't shoot the messenger").
So in this concept, there is a top-down responsibility to provide clear goals and direction and align company values with honest presentation of data. From the bottom up there is a responsibility to develop accurate information and report it upwards honestly.
As recommended to us these sort of wholesale changes--where a company's goals are aligned throughout all the staff with the projects undertaken--must frequently take baby steps.
First one needs to develop a fairly mature operational project maturity (correct timekeeping, correct reporting, projects run to a clearly defined methodology) and then one needs to re-educate the executive staff to not "cover their asses" and to report data--whether negative or not--accurately so that re-alignment could take place in a meaningful way.
I mentioned that I thought the army was an excellent model for how to manage an organization along these lines and the presenter agreed. One of the issues in modern corporations can be the frequent turn-over of executive staff and managing to keep the "porfolio management" adoption going in light of this can be very trying.
I would also imagine one could use as a model the large business processing re-engineering firms (like the now-defunct Arthur Andersen) as a good model (they gave their staff some very interesting training).
All in all, portfolio management sounds to me a bit like Stephen Covey's principles put into a methodology.
(If this has some interest for you you can download a PDF of this presentation from my local chapter's Web site. A reference to the presenter's firm is provided on the Powerpoints and she will be presenting at the PMI International Congress in Prague next week.)
Posted by artandscience at April 13, 2004 11:12 AM