Portfolio management - a duck in the hand...
... is worth three in the rushes? Should performance management be an essential part of portfolio management?
I would suggest that, while good portfolio management is about portfolio prioritisation of benefits and spend, there are some things to get right before proper prioritisation can happen largely in the area of performance management.
I think that before you can get your ducks in a row you need to figure out how well they are doing. And the latter assumes you know what ducks you have. The larger or less strategic the organisation, the more difficult it is to be able to define not only a list of activities but also how that list relates to strategic goals. This is especially true in government, where projects and programmes seem to ride on a vast swell of initiatives, and activities could fall within any number of governance or funding bywaters.
One of the roles for the Portfolio Office is rooting around for ducks in the rushes - there could be uncertainties around ownership as directors vie for responsibility in areas which they are accustomed to leading, or try to shake off areas theyd rather avoid. And in some organisations there may be lack of clarity as to strategic goals always the main driver for portfolio prioritisation. There is also always the usual plethora of small projects lurking around in the undergrowth (inevitably including pet projects, ones with long expired benefits realisation profiles, ones that conflict with each other and the It-was-a-good-idea-once-upon-a-time-project.) So getting your ducks right is the first step ... and lets face it, for those no longer wanted, culling is not a pleasant activity ...
Then its a question of finding the right pond, or should I say forum for discussion in appropriate senior management structures, to discuss the ducks. Where are your lead managers going to exchange ideas, challenge value for money or scrutinise spend? Do managers even want to engage in these topics? In short, how to motivate Alpha ducks, sorry, senior managers, to desire regular, systematic scrutiny of the portfolio?
I think a lot of it comes down to getting performance management in place, both of senior managers, and of the portfolio items. Senior management should set and be tested against targets for their individual performance. And projects and programmes need to report visibly on their delivery against outcomes. And all of this needs to be reported in the context of the whole portfolio before ducks can be culled off, one at a time, in any reprioritisation exercise.
So my personal checklist for successfully functioning portfolio management is:
- Knowing the list of activities and how they feed strategic goals;
- Motivating managers to get involved in scrutiny of the portfolio;
- Giving them the tools to do it properly through performance reporting on the right list of activities at the right forums, as well as providing the toolset for prioritisation.
Have I ducked any of the main issues here?
Dr Achilleas Mavrellis is lead portfolio quack at the Department for Environment, Food and Rural Affairs.