Based upon my own experience I’m pleased to see that the number of organisations adopting portfolio management, particularly in the public sector, is increasing. I hope that portfolio management becomes ‘internalised’ and embedded in day to day working practice like some other initiatives you may be familiar with - best value, business process re-engineering and EQFM to name, but a few.
Most of us will agree that a Portfolio Office, operating closely to the Chief Executive, can provide timely information which should facilitate improved strategic decision making. However, my assertion is that this is just one of the functions portfolio management should perform and it must offer a great deal more if it is to demonstrate sustainable “value added”.
Gareth Morgan (Business strategist and author) uses the metaphor of a machine to describe bureaucratic hierarchies where strategy is the domain of the chief executive or ‘chief engineer’. The problem with many organisations with ‘machine characteristics’ is the implied assumption that all the important decisions are made at the top. Contemporary management theory (Senge, Lipman Blumen, Heifetz and Lawrie) questions the sustainability of this approach.
I have experience of portfolio management being introduced in a public sector organisation for the benefit of a privileged few very senior managers. What was eventually created was a detailed requirement to capture significant amounts of data from programmes and projects as part of an on-going monitoring regime. The major problem that occurred was that communication was entirely one way. The Portfolio Office became so overwhelmed with information flowing up that it did not have any time for the really important functions of filtering information down, sharing lessons, providing guidance and generally demonstrating value added to the hard pressed programme and project teams.
Benchmark data can be invaluable to programme and project teams and will lead to improved decision making at all levels within an organisation. I fear that many newly instigated portfolio management initiatives will join the list of ‘management fads’ and ’10 minute wonders’, unless added value sits at the heart of the regime.