Book Review: Portfolio Management

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This book is part the OGC’s stable of Best Management Practices Guides. Sitting alongside PRINCE2(r) and MSP(r), Management of Portfolios (MoP(r)) looks at–unsurprisingly–managing portfolios of projects and balancing organisational change.
What are portfolios and portfolio management? The book explains this in the following:
Portfolios are the sum of all the investment made by an organisation (or a segment thereof) to make the necessary changes in order to achieve its strategic goals. Portfolio management is a collection of strategic decisions and processes that together allow for more effective balance, organisational change, and business as usual. Portfolio management provides senior management with reliable evidence that allows them to make better and more informed investment decisions.
Portfolio management is the art of managing resources, risk, and dependencies in a responsible manner. Its purpose is to support decision making.
MoP(r), which outlines 5 principles and 12 practices to ensure successful portfolio management, is divided across the portfolio definition and portfolio delivery cycles. All this focuses the organisation’s ‘energy’ on doing things right. It is often discussed how important it is to have ‘energy’. It can be defined as “the extent to that an organisation, division, or team has mobilised its emotional, cognitive, and behavioural potential in pursuit of its goals.” Perhaps ‘corporate focus’ is a better term.
Management without bureaucracy
The book includes real-life examples and case studies. Portfolio management is presented as non-bureaucratic. It can be used even in the absence of mature programme and project management practices. Some of the case studies do not demonstrate a nonbureaucratic approach. This is an example:
HMRC [HM Revenue and Customs] established an investment committee to make portfolio investments decisions and a change delivery council to monitor and ensure delivery confidence. Each committee is chaired and includes director-level members. Directors can only sit on one of these. The mandatory shared updates that chairmen write after each meeting are a way to maintain formal links between the two committees. Each chair also submits a post-meting report for discussion to the CEO.
I believe that multi-level committees are practical and necessary in large organizations.
An unimplemented strategy can be linked
Portfolio management should be linked to strategic objectives in the ideal case. No strategy? No problem. MoP(r), which outlines several methods to deal with this, including portfolio segmentation as well as pair-wise comparisons in order to make decisions.
The book goes to great lengths to show that portfolio management can be useful, regardless of how dysfunctional the rest of the organisation. This is a true message, but it would be difficult to convey to executives.
The book contains tools that can be used to help with that executive pitch. These include prioritisation metrics and dashboards, as well as bubble and tornado reports, and dashboards. This book has a good mix between the soft elements of collaboration and hard skills like net present value, internal return and payback.
Simon Moore’s Strategic Project Portfolio Management will convince you of the importance of portfolio management. MoP(r), however, is a great book that will show you how to do portfolio management.
Amazon.co.uk: Buy Now