Portfolio Management practitioners need to thoroughly understand the implications of various portfolio management practices and disciplines. I read an article last year discussing the misapplications of Lean principles. In contrast to other companies, Toyota’s success with the Toyota Production System is rooted in a deep understanding of the principles and theories so that they can adapt the principles in new situations. Unfortunately, wannabe Lean practitioners (or Six Sigma practitioners, or Theory of Constraints practitioners, etc.) may barely understand the basic theory and principles (but completely lack a deep understanding) and end up misapplying the methods or fixate on tools. The end result is that the methodology is criticized as not working well.
I think we could make a similar case for portfolio management. People commonly talk about various tools such as prioritization without fully realizing the cultural change and governance required or the breadth of influence portfolio management can have on an organization. When well executed, portfolio management can touch many sectors of business not limited to: finance, sales and marketing, engineering, information technology, and operations. Walking in sync with the various functions to make better decisions is a large part of what portfolio management is about. When people fixate on portfolio mechanics, or worse yet, on portfolio software, the whole organization may miss the boat.
With any kind of management discipline or quality improvement methodology, having a deep understanding of the principles and theories is very important in order to best apply the principles to a given situation. One person likened this to teaching someone how to drive a car; there are standards and rules to follow when driving a car under normal circumstances, but during unusual circumstances, an expert driver may adjust the way he/she drives in order to accommodate the conditions. A similar view could hold true with portfolio management—the application depends on a deeper understanding of the methodology. Unfortunately, people are often too quick to develop a deeper understanding and rush into applying the tools. Some time later without realizing the intended benefits, the methodology is blamed rather than the persons who improperly implemented it.
My personal approach is to right-size portfolio management processes to fit an organization's culture and maturity to be effective without creating a bureaucracy. Please contact me if you would like to know more about how project portfolio management (PPM) can help your organization achieve its strategic goals.
Latest posts by Tim Washington (see all)
- Prioritizing Projects With A Scoring Model - October 11, 2018
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