When considering getting a hand on a “portfolio” of work or initiatives, most organizations are looking at change – either through the array of work or how they do the work or how they manage the work. Or even some combination therein. The bottom-line is there is a call to action driving the need to deliver this portfolio of investments and committed outcomes to the business. Looking at this list of initiatives holistically as an ongoing set of investments, portfolio governance is central to effectively delivering change. Otherwise we fall back into the trap of making short term, isolated decisions, in granular initiatives, losing the real potential of executing across our strategic commitments.
So where to start? How do to know if I am focusing on the right levers? Thinking of governance as an “operating system” might help. And this system could land anywhere between lean and comprehensive, depending on the demands of your function/PMO and maturity. Still, there are basic components worth considering ensuring launching with a solid foundation. First, defining the drivers behind the “call to action” and related impact to culture. Aligning on mechanics and KPIs or data points. Lastly, laying out the process and related discipline so it runs effectively and does not just become another bureaucratic distraction.
DRIVERS AND CULTURE
Of course, we are speaking of the drivers of change (to stand up portfolio governance) and the behaviors to support these drivers. Example drivers are as simple as understand all the work going through the organization, closely monitor for rapid course correction, ensure all investments deliver the committed results. These are the north stars objectives that must be embraced and supported in the culture through leadership. Leadership models this mindset shift and cascades the culture down through their teams. Modeling the shift may be actively participating in the Governance process or setting up new incentive criteria in their organizations tied to portfolio performance.
MECHANICS AND METRICS
There are core mechanics for portfolio governance to stand up the leanest possible system, that can then be enhanced with additional features as the organization matures. Similarly, key performance indicators or metrics have a baseline set with many more to suit the organization’s capability, bandwidth, and desire for data. Basic mechanics align with the governance process and KPI’s with the associated reviews or decisioning consistently across the portfolio. Mechanics are things like candidate project intake, scoring model, initiative hierarchy, and alignment to strategic elements (pillars). Also, the logistics of capturing data, reporting, formalizing key decisions, tracking changes, and switching phases (Intake, Execution, Benefit Capture). KPIs and/or metrics are the minimum set of data to effectively evaluate and track initiatives “apples to apples” across the portfolio planning lifecycle.
PROCESS AND DISCIPLINE
Outside of culture, the process across which the portfolio of invested work is governed serves as the glue. The mechanics, data, and people come together in the process. The process through which the portfolio is governed typically spans three (3) phases: intake, execution, benefit capture. However lean or complex, these phases have common objectives that sew together across both initiative and portfolio lifecycles. Intake focuses on the description, prioritization, and acceptance of initiatives into the portfolio for a given planning cycle. Execution is that familiar phase where initiatives are funded and performing their work. And Benefit Capture focuses on the transition from Execution to start measuring the results of the work delivered.
Running this process with the associated mechanics, data, and people takes discipline to stay the course, leverage the data, and ultimately realized the outputs of the portfolio investments. With so many moving parts, it is crucial to establish governance in a framework that clearly supports the linkages and visibility throughout.
We often see a fourth phase where optimization is employed to enjoy lessons learned and further tailor the framework to the organization for maximum benefit production and minimal risk.
What is the most important component? Obviously, every team and organization is different, but it is safe to say culture. The hearts and minds of leaders, then their teams, need to be committed to the changes that portfolio governance can usher in.