Thursday, October 19, 2006

Is this a big O word ?

PORTFOLIO...what answer are you looking for? There are three "O"s in this word and it's not for you to go

Just completed portfolio management. In my context, I've heard this word umpteen times in my former organization, even before I came to this course. Back then, "portfolio" brings nightmares, and sends shivers. But if I were to bring back the real definition of portfolio to that same old context, this word would not have been mis-used excessively. What we've done in the past was just project management, or to a small extent, program management. Portfolio management is bigger (nothing to do with the three big "O"s). It involves the clear understanding of corporate or BU's strategies ; and putting processes in place, for IMPLEMENTION of these strategies to operations. Yes, it sounds so simple but how tough is it to do. Typically, portfolio management will be some-BODY in senior leadership role, "located" at levels where important funding decisions/allocations are made, know the corporate environment inside-out (outside-in), able to set criteria and metrics to prioritize projects selection, handling resource vs capacity demands in projects, and finally be able to optimize the mix and balance of projects in the portfolio so that strategies work out to what they are supposed to deliver. Do not blame portfolio management team when projects fail due to poorly-set strategies, since portfolio management team only takes care of the inputs (strategies) that are already designed, and their job is to realize these strategies down to operations level. They do not let projects drive strategies (it should not have happened in the first place). So, view portfolio management as a "bridge" between those setting strategies, and those down at operations. An unorthodox way to test the effectiveness of your portfolio management team is to give it a bad strategy and observe the operations outcome.

Who dares to try ?

I love the M&Ms exercise in the course! No pun intended. M&Ms, as in the melt-in-your-mouth-not-in-your-hands chocolates. How creative is the Stanford-IPS team in using M&Ms, to bring across some lessons on portfolio management. I like...

Did I also mention before I've got a "No Asshole Rule" eraser from one of the classes? I'm not trying to be rude, but the word "asshole" was used openly by the instructor in one of the classes. To be him for a second, how many assholes are there in your organization, and how many have you worked with ? Good luck !

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