“Portfolio Value Management guarantees that investment in a portfolio delivers the required return as defined in the organizational strategy, which is an expression of the stakeholder direction in defining portfolio components such as projects and programs” .
Here are some principles to bear in mind when developing the vision for a company Portfolio Office.
1. Align Strategy: Aligning of portfolio with corporate strategy is a definite. It’s a basic principle for managing a portfolio. Without this alignment, you do not have any idea if your ongoing projects are going to support or hinder the business goals.
2. Align Governance: Organisational governance also needs to be aligned to projects and the work of the Portfolio Office. Part of being able to ensure that you are doing the right projects is to make sure that there is clarity and consistency with how the company governs what is happening.
3. Close Projects Confidently: If a project is not going to deliver the benefits, the Portfolio Office should be confident enough to recommend that it be closed. A main principle of portfolio management should be that you take a hard look at the facts and act on the data and then take firm decision.
4. Lead Actively: Leadership is definitely a core principle of portfolio management. The whole portfolio structure exists to lead the business confidently forward, providing more than just management information for decision-making. It should communicate upwards, providing strategic recommendations and advice and leading change positively.
5. Embrace Risk: Your portfolio is going to have an element of risk. If your projects are too safe then your strategy isn’t adventurous enough.
6. Be Transparent: A key principle of portfolio management has to be transparency. Make sure that data is shared, that knowledge is transferred and embedded, and that honesty reigns supreme .
- The Standard of Portfolio Management, Pages 75 – 76