Managing a portfolio of projects, whether it’s a limited group of just a few important initiatives or an ever-evolving train of linked strategic ventures, requires careful attention. It can be difficult for a company to carve out the time and assign the resources to properly manage their portfolio, but without the right methodology and expertise in place, the business could find itself on the path to trouble.
Knowing that projects often require significant financial commitments and dedicated staff support, you don’t want gaps in your portfolio management strategy to diminish the value of your investments. If you’re part of the team overseeing your firm’s project portfolio, consider if you’re making any of these common mistakes.
1 – Your leadership team adds new projects to the portfolio without an initial review. Every project portfolio should have some barrier to entry—for example, initiatives may require a C-level sponsor, a connection to another strategic initiative, the need to comply with regulatory mandates, or be part of a new business collaboration or an emerging market opportunity. If your portfolio’s inbox is a free-for-all, you’ll find you spend too much time reviewing projects that were never truly viable or had no chance of gaining final approval. Create a gatekeeper function by implementing at least a minimal review process to ensure your portfolio continues to be a source of value to the organization, rather than a time and energy sink.
2 – You don’t have key metrics or other data for some of the projects in your portfolio. Companies often have a list of projects at various stages of development—some still under consideration, others in the planning phases, and at least a few being executed. Problems arise when pending initiatives are too vague or ambiguous, without solid parameters around what the project is intended to accomplish or the factors that would need to occur before the project moves to the top of the priority list. It’s critical that you have these metrics, even if they’re in the form of a simple forecast or a consensus about some general assumptions. This provides the necessary insight to assess the project’s value to the organization and its position against other efforts in the portfolio.
3 – You allow low-priority or low-value projects to linger in your portfolio. Too many organizations maintain a portfolio with a distinctive “Hotel California” vibe—projects may lose their status but they can never leave. While you may have processes in place to regularly review your portfolio of projects, the actions you take after those periodic evaluations are vital to maintaining a healthy and productive portfolio going forward. You don’t want obsolete, low-priority, or low-value initiatives hanging around too long. Unless there’s a definable reason for a project to remain in pending status, you should seek to eliminate efforts that haven’t started moving into planning or development after a set period of time. That interval will depend on your organization’s unique profile of needs, expectations, and resources, but your portfolio will deliver optimal results if you trim projects as appropriate and keep viable efforts moving forward to match your company’s strategic objectives.
4 – You don’t have good visibility into the health of your portfolio. Most businesses track the performance of individual projects, but few have good awareness into how well their overall portfolio is faring. Are a couple of lackluster projects pulling down your portfolio’s broader ROI? Are delays or resource conflicts in one initiative causing downstream problems in others? Be diligent about maintaining visibility at the portfolio level to ensure you achieve consistent project success and maximize the long-term value of your project spend.