Portfolios are no longer limited to the administration of project prioritization but have evolved as a facilitator of strategic goals. Every project is now linked to one of the corporate strategies. In this article at Strategy Execution, learn how portfolio management can help meet your strategic goals.
Linking Portfolio Management and Strategic Goals
When you align your portfolios to accomplish strategic goals, you realize business benefits faster. However, several organizations do not have clearly defined company objectives. So, business units and departments work in isolation. Instead of all projects, programmes, and portfolios, line up only the essential ones with the strategic goals.
Portfolio Denial: The majority of the companies experience failures because they do not have established portfolio management best practices. Nokia came up with smartphones before any of its competitors. Yet, it prioritized other products and ended up impacting its popularity because of the poor management of portfolios.
Assessing the Risks: To align portfolios well, link it with the annual budgeting phases as well as organizational risk management processes. The previous idea was to collect all the project risks and implement a regulatory risk mitigation process. A better approach would be to implement mitigation based on the risk tolerance of stakeholders.
Integrating Portfolios Within the Corporate: When the top management talks about portfolios from a strategic point of view, it becomes easier to translate that into actual work. The leaders can express themselves clearly to their respective teams. The idea can percolate into the very fiber of the workplace culture.
Creating the Portfolio Environment: When managers start associating their portfolios with strategic objectives, they become responsible for fulfilling the strategic goals. To expand their career horizon, they must stay updated regarding the industry and organizational demands.
What Portfolio Managers Must Do: The main issue that portfolio managers face is resource allocation. The resources not only have to look after strategic projects but also keep the lights on. It is the job of portfolio managers to create some flexibility around these resources to prevent employee burnout.
Closing a Project: When a project stops to provide value to the organization, make it a point to close it. The more projects you successfully close, the more motivated your organization becomes.
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