Does your portfolio seem to be full of nothing but high-risk, can’t-fail projects? You aren’t alone. Our project portfolio management consulting services include working with clients concerned their portfolios are risk heavy. But a thorough evaluation may reveal you aren’t as overwhelmed with risk as you think. Instead, the methodology used to measure and review the portfolio could be out of sync with business needs, or uneven adoption of the methodology may be producing risk data that’s inaccurate or out of date.
If you’re worried your portfolio is out of balance, consider these steps to help you rethink how you gauge risk and ways to return your project portfolio to a healthier state.
Confirm your project list is complete. Organizations sometimes focus so much attention on their riskiest efforts that they essentially overlook the fact they’re still planning and executing plenty of other, more routine initiatives that also likely contribute to the company’s broader goals. Step back and confirm your portfolio encompasses all of the projects your business has going, whether they’re in progress or still in the planning and development stage. Add any projects you may have missed, as well as high-level goals that have evolved since your last assessment, then reevaluate your risk profile with this more comprehensive view in mind.
Review your risk assessment process. Your company’s risk assessment protocols may no longer align with the evolving needs, capacity, and expectations of the business. As you look over the strategy you’re using today and consider where it can be improved, remember to take a good look at not only the initial assessments conducted when your portfolio expands through the addition of a new project, but also any other periodic assessments you may carry out as initiatives exit the portfolio upon completion. Maintaining awareness around how risks evolve throughout the entire lifecycle of your portfolio is important.
Review your risk management participant list. Unlike project-level risk assessment and mitigation efforts, which can often be accomplished successfully by the project team, managing risk at the portfolio level requires the participation of your senior leadership group. Their input on the relationship between the sound execution of the project portfolio and the company’s ability to meet its strategic objectives will help you more accurately identify risk areas as well as develop a better understanding of your organization’s risk tolerance. Ongoing discussions around portfolio risk are key, because these baseline factors naturally change as the business matures.
Review your resource allocation strategy. If the bulk of your projects truly carry significant risk and delivering results to further the company’s strategic objectives does, in fact, appear to be in jeopardy, it’s imperative that you deploy the necessary resources quickly to bring the risk picture back under control. You also need to ensure you have the right expertise and sufficient time assigned to your risk assessment and management efforts. It’s possible you’re missing important opportunities to more effectively mitigate the existing risk, and putting the most suitable people on the problem can help you reduce your portfolio’s risk profile over time.
Gain a neutral perspective on your portfolio’s health status. An external partner such as an experienced portfolio management consultancy can provide some much-needed objectivity around risk and overall portfolio health. If you continue to find yourself stuck in a situation where every project carries maximum risk and critical strategic objectives are vulnerable, consider getting fresh input from a neutral source to ensure your team members and stakeholders aren’t blinded by internal drivers—fear, ego, unsupported optimism, or lack of accurate data that may be lead to a skewed view of your risk picture.
PMAlliance, Inc offers project management consulting, project management training and projec