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Relate Articles:

1. Portfolio Management Best Practice 2 – The Project Registry
2. Portfolio Management – Introduction
3. Project Management Best Practice 3 – Line Management Project Ownership
4. Project Management Best Practice 1 – The Project Management Intensity Continuum
5. Portfolio Management – Managing Shared, Perishable Resources

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Relate Articles:

1. Portfolio Management Best Practice 2 – The Project Registry
2. Project Management Warning Flag 3 – Frequent Re-baselining
3. Project Management Warning Flag 1 – Unfunded Activities
4. Portfolio Management Best Practice 1 – Indentify Interrelationships
5. Project Management Warning Flag 2 – Breaking-up a Project to Avoid Approval Thresholds

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Relate Articles:

1. Portfolio Management – Introduction
2. Project Management Best Practice 3 – Line Management Project Ownership
3. Portfolio Management Best Practice 1 – Indentify Interrelationships
4. Project Management Best Practice 5 – Define Success First
5. Project Management Best Practice 1 – The Project Management Intensity Continuum

Special Edition 22 – An Interview with Michael Bender, author of A Manager’s Guide to Project Management explores how executives should approach project management in order to enhance alignment and accountability to their organization’s vision, mission, goals, and values. During our discussion, Michael Bender, Founder and CEO of Ally Business Developers and author of A Manager’s Guide to Project Management: Learn How to Apply Best Practices shares his insights regarding:

• a process for aligning projects with the organization’s vission, mission, goals, and values
• frequency for rebalancing the corporate project portfolio
• criteria and method for evaluating whether or not to discontinue a project
• importance of accounting for unbudgeted activities when evaulating a project’s cost

Additional Information

In addition to the invaluable insights Mike shares in A Manager’s Guide to Project Management and this special edition podcast are the additional resources accessible from his Ally Business Developers website (www.AllyBusiness.com). Mike’s book, A Manager’s Guide to Project Management, published by FT Press can be purchased by clicking here.

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Michael Bender, author of A Manager’s Guide to Project Management, is Founder and CEO of Ally Business Developers, a consortium of world-class business, organizational, and professional development experts. Michael’s leadership and project and program management experience contributed to projects including the Hubble Space Telescope, NEXRAD – the Next Generation Weather Radar, and air traffic control systems for the United States, the United Kingdom, and Taiwan. He is an American Management Association speaker and guest speaker at DePaul University and the Project Management Institute. To read Mike’s full biography, click here.

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Member components of a portfolio have interrelated items similar to those associated with larger projects. The difference between portfolio and project management lies with the relatively decentralized nature of a portfolio. Unlike a project manager, portfolio managers don’t often receive highly detailed reports on the portfolio’s progress and the handoffs between individuals or workgroups performing each component’s activities. Instead, a portfolio manager receives high-level status information regarding the progress of each project, program, and process under his or her purview. Therefore, it is essential that the portfolio manager clearly understands and in most cases documents the key interrelationships between portfolio components, thereby; enabling the portfolio manager to better track the specific handoffs which may disrupt overall portfolio progress and diminish benefit realization.

Relate Articles:

1. Portfolio Management – Introduction
2. Portfolio Management – Managing Shared, Perishable Resources
3. Organizational Accountability Best Practice 1 – Fact-Based Management
4. Resource Management Best Practice 1 – Attract the Best with Accountability
5. Project Management – Introduction

All work requires resources for its performance. Resource types can be generally categorized as:

• Personnel – skilled labor and knowledge resources
• Equipment – tools, software applications, and facilities resources
• Material – land, parts and components, commodity materials and supplies, data, and intellectual property resources
• Financial – cash, credit, and other financial instrument resources

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Relate Articles:

1. Portfolio Management – Introduction
2. Resource Management Best Practice 2 – Categorical Activity Prioritization
3. Strategic Planning Best Practice 7 – Shared Accountability
4. Resource Projection Best Practice 2 – Begin with the Work
5. Resource Management Warning Flag 2 – Parkinson’s Law

Types of Portfolios

Portfolios are the collections of either assets sharing similar characteristics or activities supporting achievement of common objectives. Individual items with the collection may or may not be interdependent or directly related. These logical groupings, however, facilitate measurement, comparison, and prioritization which in-turn provides portfolio managers with the information necessary to make and implement decisions that maximize value creation for the resources expended.

Management of asset and activity portfolios requires a different focus and skill set. While both asset and activity portfolio management involve the management of resources, asset portfolio management focuses on value creation through the acquisition, deployment, and release of resources whereas activity portfolio management focuses on the prioritization, selection, and execution of value creating work using resources. To better illustrate this concept, the following asset and activity portfolio definitions are offered:

• Asset Portfolios: collections of items the use of which generate value
  • Financial: collections of convertible instruments that create value and/or can be exchanged for other resources. Examples include: cash reserves, options, stocks, and bonds
  • Material: collections of physical property used in the creation of value adding products and services. Examples include: structures, equipment and tools, and raw materials, components, and supplies
  • Intellectual: collections of knowledge resources used in the creation of value adding products and services. Examples include: data, patents, copyrights, trademarks, and retained human knowledge and experience
  • Labor: collections of employees, typically grouped by skill set, who perform value adding work. Examples include: managers, engineers, graphic designers, and mechanics
• Activity Portfolios: collections of business activities through which value is created or enhanced.
  • Operational Portfolios: collections of the major, ongoing and repetitive activities that either directly or indirectly support organizational value generation. Examples include: marketing, sales, production (of goods and/or services), maintenance, human resources, and finance
  • Project Portfolios: collections of projects typically used to enhance or expand existing operational portfolio activities. Examples include: business process reengineering, enterprise resource planning software implementation, and new product/service development

Note: While effective management of both asset and activity portfolios is critical to the success of any organization, postings within the Portfolio Management category will focus on activity portfolios. Insights regarding the management of asset portfolios will be provided within the Resource Management category.

Activity Alignment with Mission Goals

Aligning activity portfolios with the organization’s mission goals necessarily begins with the strategic planning process. Because no one project or recurring activity is likely to satisfy all of an organization’s goals, executives and managers work together to identify, prioritize, and select collections of activities possessing the greatest value potential for a given cost, bounded by the organization’s limited resource availability. Quantifiable measures of value and cost assigned to aid in activity prioritization and selection are then translated into performance measures against which the portfolio manager judges the collection’s ongoing mission alignment. (See Figure 1)

Effective, Efficient Deployment of Resources

Today’s rapidly changing business environment and the dynamic nature of operational activity and project execution demands continuous reevaluation, reprioritization, and, as necessary, redistribution of the organization’s limited resources away from low and no value adding work to those more directly supporting goal achievement. Making resource allocation adjustments to maximize an activity portfolio’s value is, subsequently, a primary responsibility of the portfolio manager.

In order to maximize a portfolio’s ongoing value creation, portfolio managers must act to ensure performance of their portfolio’s activities remains in alignment with and drives achievement of stated mission goals. Therefore, these managers need to clearly understand the organization’s overall objective goals and the value proposition of each activity within their portfolios. It is with this knowledge that they divert resources from low and no value adding work to those more directly supporting goal achievement.

Focus of the Portfolio Management Topic

Articles in the topic area will focus on the underlying principles, best practices, and warning flags associated with maintaining effective activity portfolio alignment with mission goals while, at the same time, efficiently deploying the organization’s limited resources. The following articles, podcasts, documents, and resources cover those topics critical to a robust portfolio management program.

Articles

Principles

• Managing Shared, Perishable Resources    [StrategyDriven Premium Content]

Best Practices

• Best Practice – Identify Interrelationships    [StrategyDriven Premium Content]
• Best Practice – The Project Registry    [StrategyDriven Premium Content]
• Best Practice – The Project Registry (Continued)    [StrategyDriven Premium Content]

Warning Flags

• Warning Flag – Management Distractions    [StrategyDriven Premium Content]

StrategyDriven Podcasts

StrategyDriven Podcast – Special Edition

• An Interview with Michael Bender, author of A Manager’s Guide to Project Management

FREE StrategyDriven Trial Membership Start your FREE trial membership* and receive: FULL ACCESS to StrategyDriven’s premium content for 14 days FREE COPY of a StrategyDriven Expert Contributor book† EVALUATE how StrategyDriven gives you a competitive advantage

* Free 14 day trial included with a monthly membership registration. A monthly recurring subscription of $9.95 will begin after the initial 14 day trial period. Memberships can be cancelled at any time. Premium Member access will continue until the free/paid subscription expires.

† Available only to those living within the United States after the first monthly membership payment is received. Name and address information required. Books typically valued from $14.95 – $29.95 USD. Book value is not guaranteed.

Relate Articles:

1. Management – Introduction
2. Resource Management – Introduction
3. Organizational Performance Measures Whitepaper Introduction – Selection
4. Resource Projection – Introduction
5. Strategic Planning – Introduction