“Portfolio management – that’s something only big firms do, isn’t it?”
Not at all! Even small businesses can benefit from taking a portfolio management approach to managing their projects. In fact, you could argue that portfolio management is even more important in smaller companies. In these businesses, taking a risk on the wrong project or delivering late on a big contract could put jobs at stake, or worse, affect the profitability of the company overall.
Portfolio management is something that businesses of all sizes benefit from. In this article we’ll explain what it is, how it can support your teams on the ground delivering projects and what the function might look like in a small company.
What is Portfolio Management?
Portfolio management is the discipline of taking a holistic look at all your company’s projects and making the right decisions for the business.
The Portfolio team (this could be a single person) gets involved in the project life cycle from the moment the idea is put forward. They support the production of the business case and analyze how this new initiative would fit with and impact existing work. They help the decision-makers draw the conclusions that make the most sense for the business, looking at current and future resource levels, investment, project risk across all the current projects and more.
In other words, they take a cross-functional view of the work happening in the company so that there’s a manageable balance between the amount of risk the company is prepared to take, the amount of money it has got to invest in new projects and the amount of resource available to actually deliver. They provide information on all of this to the senior execs so that they can choose which projects to pursue, which to stop (or pause) and which to not start at all.
On top of this strategic analysis, helping execs understand the impact of project work across the business, the Portfolio team can also support delivery.
In small businesses, there might not be enough people in a project or program management role to create a sense of ‘community’; what larger firms sometimes refer to as a Center of Excellence. When you’ve got a handful of people running projects alongside their day jobs, the support they need is different to what might be provided to a project management cohort in large enterprises.
There’s still lots of support that a central project-led function can offer, even to managers who don’t officially have the job title of ‘project manager’. Simple things that save time for those on the front line of delivery include:
- Maintaining a library of project management templates so project leaders don’t have to create documentation from scratch.
- Offering a peer review service, which is especially important in this environment where there aren’t that many people in the team with the experience to look over a critical client document or business case.
- Offering project health checks.
- Providing training to project managers on a formal or ad hoc basis.
- Providing support to project sponsors, especially those who haven’t sponsored projects before.
- Maintaining enterprise-grade project management tools and supporting others in how to use them.
- Helping with risk identification and management plans, that then roll up into corporate level risk management plans.
- Liaising with contractors and third parties where the individuals involved don’t have the expertise to do this for project management services.
Your Portfolio team can do whatever your teams require, so this is not an exhaustive list. If it helps to have someone facilitate meetings, then you can offer that service. It’s really up to you. As long as it helps your delivery teams get their work completed on time, on budget and to the required levels of quality, you can be flexible in the central services you offer. These can, of course, evolve over time as well.
What The Portfolio Team Might Look Like
In the smallest firms, your Portfolio team could be one person. However, this necessarily limits what the Portfolio can do, and in this case you’d probably prioritise having this individual focused on supporting the exec team with information and analysis instead of facilitating meetings for project managers. Think about where you would get the most value out of creating this post.
The downside of having a single person in your Portfolio Office is that the portfolio management role is vast. The skills that someone needs to dig into the resource allocation information and accurately comment on whether your existing team can take on that new client project or not are different to training a group of team leaders in how to manage projects.
You may find a star employee who can fill all your requirements, but you may find that it’s more beneficial to have a number of individuals working perhaps on a part-time basis in the Portfolio Office and balancing their portfolio management activities with other roles.
This group could have a dotted line into the Strategy Director, or someone else on the executive team who has responsibility for setting the future direction of the company.
Ultimately, you can staff your Portfolio Team any way that works for you. The one thing it’s important to bear in mind is that in businesses of any size you don’t want to be adding a function that is largely bureaucratic. When you add roles, it should be transparent what value they bring and why the company will be better off because someone is filling them. With a strategic focus, that shouldn’t be a problem!
Small companies can certainly benefit from taking a professional approach to portfolio management. The end result will be more projects started that are realistically able to finish, so less wastage of both time and money, better strategic fit to the projects that are being worked on and greater clarity for the decision makers about what their decisions actually mean.
All of this supports growing your business in the right direction and having full oversight over what’s going on. Can you see how taking a portfolio management approach would benefit your business?