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Tenet #10 - Ten Tenets of Portfolio Management

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by Larry Pendergrass, Principal

Tenet #10: Institutionalize learning.

My previous blog dealt with the need for rigorous monitoring. This monitoring is of two types:

  • Monitoring by the PPM team of the execution of projects, and of the markets they will serve, taking corrective actions in the face of new data to make sure the company’s goals are met.
  • Monitoring by the leaders sponsoring the PPM team of the effectiveness of that team and the processes they use, and taking corrective actions to assure team and process effectiveness.

Without careful and rigorous monitoring, and with the ever changing climate of business need, it is quite easy for projects to get off track and for PPM teams to become ineffectual.

In this the tenth and final blog on Project Portfolio Management, I would like to highlight the need for continuous institutional learning and improvement of the PPM process. This concept of continuous improvement and learning has become a mainstay for most firms adopting quality management systems of almost any incarnation. But it rises to the level of my final tenet largely because it is often forgotten with respect to the PPM process. As stated earlier, the entire PPM process is often overlooked sandwiched as it is between strategy and the execution of projects. But even with an effective PPM team in place, it is seldom true that the team stops and examines what has been learned for the betterment of the PPM process.

There are key junctures at which the PPM team should take an assessment of itself, learn from successes and failures and improve what is currently in place. Here are a few of those junctures:

  • Major changes of personnel, charter, roles or responsibilities
  • Major changes in corporate goals, strategy or portfolio scope
  • Following a major project or strategy success or failure, or the completion of a major project
  • Annually a regular cadence appropriate to the firm

These triggers provide convenient reminders for reviewing the PPM team and its process. However, if the PPM team waits to activate their process for institutionalizing learning until one of these major junctures, much of what was experienced will be forgotten before it can be used to advance PPM effectiveness. Continual detailed record keeping of successes and failures along with their root causes must be executed before the information is lost. Due to foggy memories and a tendency toward revisionist history, trying to reconstruct events from a past project during a meeting of the minds at one of these review sessions will keep many points of important education off the table and in the dark.

Major changes of personnel, charter, roles or responsibilities: There will be occasion to rotate some people out and others in to the PPM team due to promotions, sharing of the responsibility, attrition and other causes.  Additionally, members may trade roles within the team. And in some cases, the PPM team may even change charter, including its portfolio scope (for instance, including or excluding certain product lines). With each of these changes, there is a good chance that key history and lessons will be lost if the team doesn’t take the time to examine itself, learn and adjust based on these lessons.

Major changes in corporate goals, strategy or portfolio scope: Another significant disruption to “business as usual” for the PPM team is when the corporate goals, strategy or portfolio scope changes. This trigger might cause a shift in personnel or in processes, or in a radical overhaul of the active portfolio. It provides an excellent reminder to stop and examine what has worked well, what has not, and what has been learned since the last occasion for great self-examination.

Following a major success or failure, or the completion of a major project: Failure is a natural part of growth. If we don’t fail enough, we don’t learn anything we didn’t already know, nor gain new direction. If we don’t succeed enough, we don’t validate our knowledge, assumptions, skill and processes. In fact, a 50/50 success rate is often optimum for maximum learning [1]. It is important to examine both our successes and our failures. From our successes, we at least learn what we should do more of. And from our failures we often learn what we need to stamp out or perhaps what extenuating circumstances explain an isolated issue and calm our fears of the need for wholesale change. Unfortunately, all too often we are just happy to complete a project and put it behind us, moving on to the next challenge. For every important project, or for significant successes or failures, the PPM team should take the time to ask “why” enough times [2] to get to the root cause. And determine to drive either more or less of that root cause in the future.

Annually a regular cadence appropriate to the firm: If each of the above triggers to self-examination are not frequent enough to cause continuous improvement, a firm can rely on introspection on a regular and planned cadence such as an annual PPM team and process review.

Of course, in each of these evaluations, the intention should always to improve the PPM team and process effectiveness, and not to lay blame. In order to keep the reviews open and honest with the focus on improvement, an environment of trust rather than punishment must be developed.


Summary and Conclusion

In these blogs, I have given you my ten tenets of Project Portfolio Management. I have found these to be essential when identifying, monitoring and nurturing a portfolio of projects that will be most effective at fulfilling the corporate goals. To review, the PPM team must first align itself to the corporate strategy, from which should flow the project strategy along with other supporting strategies. In order to maximize gains for the firm, managers should demand alternatives when presented with a request for a decision. Managers should insist on everyone using a common unit in discussions, the unit of currency. The use of uncertainty in describing aspects of a project including its valuation should become second nature to the team. The PPM team needs to understand fully, and balance the many dimensions and goals of the firm. Using visual analysis to compare projects, a team is better able to understand the landscape of possibilities, balance the goals of the firm and communicate with each other. The team must remember, track and leverage the tiered and interconnected nature of strategies, from corporate strategy down to process strategies. The team must realize that the best lever for improving flow is in their hands, that of approving the number and types of projects in the pipeline at any one time. Finally, the PPM team must monitor projects and itself regularly, with a focus on nurturing or killing projects, improving teams and processes and institutionalizing learning.

PPM is perhaps one of the most underutilized tools in your kit, and even where implemented it is often only used for a fraction of its power. But PPM correctly used will make your strategy stronger. PPM will make your implementation better. With one foot in each camp, a properly chartered PPM team staffed with knowledgeable leaders, leaders authorized to take action, will drive your firm to greater effectiveness.


[1]See for example The Principles of Product Development Flow: Second Generation Lean Product Development by Donald G. Reinertsen

[2]See for example the “5 Why” method at

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