In today’s fast-paced and complex business environment, effective portfolio management and governance is critical for aligning organisational efforts with strategic goals. By focusing on key principles and practices, organisations can drive better decision-making, improve project outcomes, and maximize benefits realisation.
We recently delivered a masterclass on this, so we thought we should share some essential considerations for portfolio management and governance success:
1. Work with Strategy in Mind
The primary objective of portfolio management is to align all initiatives with the organisation’s strategy. Each project within the portfolio should contribute to the strategic objectives, ensuring resources are focused on the right priorities. Keep strategy at the forefront of every decision to create tangible value.
Always ask, “How does this initiative contribute to our strategic objectives?” Ensure every project directly supports your organisation’s goal.
2. Establish a Portfolio Lifecycle
A well-defined portfolio lifecycle enables organisations to manage strategic initiatives effectively. Ensure all projects are onboarded, monitored, and offboarded through a consistent process. This lifecycle ensures alignment with strategy, provides transparency, and enhances decision-making.
Create a framework for decision-making that focuses on performance, strategic alignment, and benefits realization. At every stage gate in your lifecycle, we need to ask ourselves:
- “Is the value we left the last stage gate with intact/worse/better?”
- “Is project achievability worse or better?”
- “What does the risk profile look like – Better or worse?”
3. Understand Organisational Barriers
Every organisation has unique challenges that can impede progress. Whether it’s resource constraints, sponsorship maturity, or the sheer volume of parallel workstreams, identifying these barriers is critical. Understanding what holds your organisation back allows you to address issues proactively and build resilience into your portfolio.
So go and speak with executives, middle management, and team members and gather all the views and opinions you can about what drives frustration and delay into your project schedules. Don’t try and fix everything and focus in on the root causes behind the symptoms people will share.
4. Invest in Good Governance with Trained Sponsors
Governance is the backbone of successful portfolio management. Engaged sponsors play a pivotal role in guiding projects, making informed decisions, and championing change. PMI state that you are twice as likely to succeed in project delivery with engaged executive sponsors.
Many sponsors lack clarity about their role – and it’s not their fault! Noone goes on ‘sponsorship training’ before they become a Sponsor for the first time so provide clear role descriptions and ongoing support to keep them engaged and effective. Your project managers will love you for it.
If you are looking for some help in this area, check out our courses “Courageous Sponsorship and Governance” and “The Sponsor Partnership Advantage: An Essential Toolkit for PM’s” to help both sides of the table work effectively together.
5. Be Customer-Centric in Your PMO Approach
Your Portfolio Management Office (PMO) exists to serve its customers—executives and wider stakeholders. Understand their needs, perceptions, and expectations. Use this insight to tailor reporting and communication, ensuring that your PMO delivers value and fosters trust.
Americo Pinto, PMO Global Alliance (PMOGA) Managing Director, says that “The value of a PMO, like beauty, is in the eye of the beholder.” We need to create the perception of value, which sometimes could be numbers, or it could be more of a feeling. It isn’t necessarily in process and structure.
We need to be able to respond to the ever-changing needs of our customers – so we need to adaptive as time goes on.
6. View Benefits Management as an Art
While metrics and analysis are important, benefits management often requires intuition and longer-term ownership. It’s not always a straightforward calculation. Engage stakeholders, continuously reassess assumptions, and remain flexible to capture and sustain value effectively.
The biggest leap in maturity around benefits management (from nothing to something) I saw one client make was by simply hiring a graduate Business Analyst. She had no experience in projects or benefits, but her role was simple;
- Work with the business representatives and project managers to ensure all business cases or charter included quantifiable benefits, including a measurement of these today.
- Work with the project managers for projects that were currently in-flight, and ascertain what benefits will be delivered as a result of completing the project.
- Sit in on key governance/steering committee meetings and table the current state of the projects expected benefits.
- Meet with business leaders 6-months after a project, and capture changes in performance.
Doing this saw Benefits become a regular and expected talking point around project delivery.
If the performance of the organisation improves and you are having trouble mapping it back to one project (due to a number of concurrent, overlapping projects or broader business/market changes), don’t sweat it! Your performance is better and that was the goal, so why overanalyse a race you’ve already won.
7. Choose Software Tools Wisely
There are SO many project management tools on the market, and many of them come and go.
We often attend project management conferences where a number of vendors are promoting their ‘best in class’ software solution for you. The right tool(s) can enhance efficiency, but selecting it requires careful consideration. Some key advice:
- They will all say their USP is their ability to integrate with your existing systems. They can’t all be the best at doing the same thing.
- Find local companies who already have the tool in operation. Ask for a visit to get a live-demo, and get their views on what it does well, and not so well.
- Some tools are better for Portfolio Management, other tools are better for Project Management. You’ll have trouble getting your PMs to use a tool that makes their lifer harder, because it is designed at the Portfolio level.
8. Embrace Comprehensive Change Management
Change management is more than sending emails and organising a few training sessions. It involves fostering understanding, engagement, and commitment at all levels of the organisation.
Tailor your approach to the needs of your audience, ensuring a seamless transition that minimises resistance. Simon Sinek tells us that people don’t necessarily fear change, they hate sudden change. And according to McKinsey, 70% of transformations (large scale projects) fail because of staff don’t choose to get onboard – they are missing the ‘why’.
Both our Leadership and Organisational Change Management Masterclass provide some great advice, examples, and best practices on all things Change Management.
Final Thoughts
Portfolio management and governance are fundamental to driving strategic success. By aligning initiatives with strategy, fostering strong governance, and embracing a customer-centric mindset, organisations can overcome barriers, realise benefits, and create lasting value.Whether you are setting up a new PMO or refining existing processes, remember to adapt, learn, and continuously improve. Success in portfolio management is not a one-time achievement but an ongoing journey toward strategic excellence.
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