Portfolio Management in times of uncertainty
Sandie Grimshaw
Balancing your change portfolio
APM Portfolio Management SIG Conference 2017,
11 May 17,
Holiday Inn Bloomsbury, London
2. PwC
The Exam Question:
“How do organisations manage the collective impact of Brexit on their projects and programmes balancing risk,
cost and benefits against the uncertainty of the emerging political and economic changes?”
Context
Firstly, this is not a discussion specifically about Brexit – there are many such articles in the public domain that
adequately cover that topic. This briefing (summarising the key note address from the APM Portfolio Management
SIG in May 2017) uses Brexit as a proxy for uncertainty – it looks at the opportunities and threats presented by
uncertainty and makes two key challenges: Is your Board ready? Is your Portfolio function capable of stepping up?
We start by considering how Portfolio Management is relevant to Brexit.
The challenge
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May 2017Portfolio Management in times of uncertainty
Brexit
The UK triggered Article 50, so as far as everyone should be
concerned, it’s full steam ahead. Whatever Brexit actually
becomes.
We need to apply ‘systems thinking’ – recognising that all parts of
the economy are linked. “UK PLC” is incredibly complex and is
going to be impacted by Brexit in ways that we have probably not
yet considered. And this applies equally to organisations as to
individuals working for those organisations.
And we must also consider the EU27. Our negotiating colleagues
around Europe are also all going to be impacted, and they all have
differing priorities that must be addressed through the
negotiations.
So where does Portfolio Management fit?
At PwC we use the ‘run the business’/’change the
business’ conceptual model to distinguish between
operational and change effort.
The diagram to the left overlays how this might be
applied at a ‘UK plc’ level to support Brexit.
It shows the pivotal role that the Department for Exiting
the EU will play in running scenarios and providing the
analysis to support negotiations and swift decision
making.
If Portfolio Management is pivotal at a UK level then it
is certainly as relevant at the organisational level too.
3. PwC
What’s on the board member’s minds?
The world is spinning faster and uncertainty is the new normal. Change is both dynamic and complex.
Dynamism and bravery are the only responses to managing risks and opportunities that will enable Boards to
survive and succeed.
The board room view
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May 2017Portfolio Management in times of uncertainty
Carpe Diem
In times of uncertainty there is a real need for organisations to be dynamic and responsive to what is happening
around them, and adjust their course accordingly.
The traditional long term, 5 year strategy, approach is no longer going to work. There is a clear need to keep
checking the course set, and making adjustments to direction to respond to changing circumstances.
This means setting a clear Vision so that everyone can align and join the journey. It means setting out clear
Design Principles or ‘ground rules’ that will guide decision making along the way. It will also mean having an
early view of ‘value’ or the Benefits that the Board expect to achieve – so that they can put down markers to
check that they are on track to achieve their intended Outcomes.
Successful organisations also have Boards that are prepared to take chances and therefore make some mistakes
– risks can often be turned into opportunities by adding courage into the mix.
We start to describe this as Boards being able and willing to make ‘no regrets’ decisions. That is, they take
action on the data available to them, and their knowledge of their environment, and make it work.
Portfolio management has a clear part to play here. We know that in many organisations the strategy function is
separate from finance. Change is separate from operations, and so on. The portfolio office should be the glue to
binds the organisation together, but the PPM profession needs to become much more agile too.
Of course you need the underpinning infrastructure of good programme controls, but you need so much more
too…
4. PwC
Agile? Agility? Responsive performance?
Many organisations are saying they want to deliver using Agile. Pure Agile is about software development, and
there is a clear published manifesto and principles that underpin this approach. But what most organisations are
actually describing is a means of adopting the Agile principles, and applying them to what are often complex,
structured, traditional projects.
Business agility
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May 2017Portfolio Management in times of uncertainty
Delivering portfolios in unpredictable times requires looking at new ways of working. We talk about delivering
strategy through execution – they are two sides of the same ribbon, both constantly evolving.
The portfolio team need to recognise this changing environment and be ready to respond to it, and provide
management information to the business leaders to enable them to respond with appropriate agility.
Adding more to the portfolio remit
Delivering portfolios in unpredictable
times requires looking at new ways of
working.
Historically portfolio management has
been retrospective and been about
compliance and process. It needs to
change, and must now be outcome
focussed.
The portfolio function should address:
• Predicting the future, providing scenarios & options, ideas, responses to potential external influences for
senior management to consider, which includes what impact it would have on strategy, existing projects, BaU
• Prioritising that which delivers business value - keep a clear focus on outcomes, not just ‘doing’. As per
the PPM survey, use the data to be brave and call in flight projects to a stop if they are no longer going to realise
the intended value.
• Focussing on benefits management & performance management - measure the things that matter,
understand the baseline, be clear to leadership what these factors mean - provide management information
• Investment management - know how the ‘scarce pound’ can be spent most effectively to realise benefits,
performance and strategy outcomes, most effectively. Just because the chief has said a project is a good idea,
doesn’t mean it is. The Portfolio Office need to have data to ensure the right decisions can be made. There is a
critical need to align overall investment in change with the organisations priorities.
• No regrets decisions - the portfolio office must equip the business leaders to make the best decisions based
on the best information currently available, and make those decisions work. The portfolio office must be able to
implement those decisions and re-shape the portfolio accordingly.
5. PwC
Delivering against the strategy
In the current environment, delivering the strategy is as
complex as 3D chess. Brexit is driving major political and
economic change, and uncertainty is arguably the highest it’s
been in any of our working lives
There is a big risk that frequent changes to an organisation’s
strategy will destabilise it. There is an additional risk that the
portfolio function will lag behind the organisation’s strategy
changes, so will be a perpetual state of catch up. The Portfolio
function must be at the table with, or close to, the leadership
so it can input and respond effectively. The outputs of the
portfolio environment itself drive amendments to the strategy.
We need to empower our clients to make decisions without
regrets, based on the best information available to them -
from internal sources and from understanding what is going
on ‘out there’ with the economy, politics, public opinion and,
of course Brexit. It is a time of unprecedented uncertainty for
most businesses, operating in a world where misinformation,
and public opinion can circle the world through social media.
Portfolio management has a huge role to play in bringing
order to the potential chaos.
Looking to the future
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May 2017Portfolio Management in times of uncertainty
Changing the Portfolio construct. What’s got to
change?
The portfolio function has got be so much more than
technical compliance. It now needs to focus on the soft
skills.
There is a clear need for the portfolio office to be able
to provide clarity and visibility across the landscape,
and to build trust with senior leadership that they have
real insight and information at their finger tips to aid
the business.
And the portfolio team must balance the need to
deliver change and operational outputs in as stable a
way as possible.
Performance and benefits management must be at the
heart of the organisation and visible to decision
makers so that decisions are grounded on metrics that
matter.