What is portfolio management and why is it important? 23 May 2017-Maidenhead-Thames Valley Branch

1. Strategic Portfolio
Management
1
portfolioSIG@apm.org.uk
Thames Valley Branch Meeting
23rd May 2017

2. 2
Agenda
1. Rationale for Portfolio Management
2. Benefits in implementing
3. Overview, challenges and roles
4. Critical Success Factors

3. Why do we need PfM?
• Deliver the“right” programmes and projects
• Aligned with organisational strategy
• To achieve the organisational goals
• Remove unnecessary, unaligned and poorly performing projects
• Have more effective implementation of programmes and projects
• Agreed prioritisation and management process
• Consistent approaches & improved dependency management
• Enhanced transparency, accountability and governance
• Improve resource & skill utilisation, effectiveness and collaboration
• Create holistic assurance and risk management assessments
• Improve engagement & communication between senior mgt & staff
Increased business benefits
& optimised ROI

4. 4
External research says Portfolio
Management provides tangible benefits
What do best-in-class organisations do differently?
Benchmarking the use of Project Portfolio Management
Best in class
(Top 20%)
Industry average
(Middle 50%)
Laggard
(Bottom 30%)
Projects completed on time or early 88% 70% 40%
Projects delivered on budget 91% 80% 53%
Changes in ROI since implementing PPM process 28% increase 13% increase 3% decrease
Projects that deliver expected ROI since implementing PPM process 82% 58% 30%
Strategy Process Organisation Knowledge Performance Management
 Build regular risk-
assessments into pre-
defined stages of the
project
 Align the portfolio to
customer needs
 Balance the projects
in the portfolio with
the resources
available
 Carry out lessons
learned sessions
upon project
completion
 Build on
success/failure in
future projects
 Map required
skills to project
resources
 Encourage the
involvement of
multiple
stakeholders
 Build a cross-
functional team of
individuals
 Select and
implement PPM
tools
 Align the portfolio to
customer needs
 Mechanism to
capture feedback
and centrally
manage ideas
 Decisions
consistently made
on the same version
of the date
 Keep decisions objective by removing
politics
 Assess revenue/return before accepting
new projects
 Reference past performance in decision-
making
 Establish standard performance metrics
across all projects
Source (a) Research commissioned to Strategic Research Group, Capgemini UK plc, March 2012

5. - 5 -
“Highly effective
organizations are twice as
likely to look to portfolio
management to
enable innovation.”1
“70% of ROI goals are
met when managers
are focused on
strategic objectives” 1
“62% of organizations described
as highly effective in portfolio
management met or exceeded
expected ROI” (versus 49%)1
“72% of strategic initiatives are
successful if an organization
posses portfolio management
maturity” (versus 46%)2
“The top three drivers of
companies pursuing portfolio
management are customer
service, cost reduction, and
revenue growth”1
Sources:
1. PMI Pulse of the Profession Portfolio Mgt 2012
2. PMI’s 2014 Pulse of the Profession Survey
3. PMI Pulse of the Profession™ In-Depth Report:
Portfolio Management 2012
“21% of organizations use
portfolio management to
increase share of market, and
just over half believe it helps
them grow revenue”3
Portfolio Management

6. PfM Overview
From strategic goals, through portfolio management to delivering the benefits
Programmes
& Projects
Vision
Corporate
goals
Corporate
strategy
Pressures
Portfolio &
Business Area
Plans
BAU work
Benefits
delivered
Corporate
Goals
achieved
Business performance
Portfolio governance
Prioritisation model
Existing change & business as usual
Current
performance
Organisation
values

7. Programmes
& Projects
Vision
Corporate
goals
Corporate
strategy
Pressures
Portfolio &
Business Area
Plans
BAU work
Benefits
Corporate
goals
Business performance
Portfolio governance
Prioritisation model
Existing change & business as usual
Current
performance
Organisation
values
PfM Challenges
Little
Consensus
External
Influences
Poorly
Understood
Not Properly
Understood
Priorities
Not Agreed Less than
Expected
Resources
Poorly Aligned
Weak
Controls
From strategic goals, through portfolio management to delivering the benefits

8. Who does what?
BCM: Business Change Manager
Portfolio Exec
Portfolio
Mgt Office
Sets the vision, corporate goals & strategy
Determines how to
deliver the strategy
PMO - Coordinates demand,
supports prioritisation & governance, coordinates
resources, provides progress & outlook,
coordinates RAID and manages change.
Investment board
Ensures integrity of portfolio mgt
governance & process. Accountable
for delivery of the overall portfolio
Programme
Mgr
BU director
Project
Mgrs BCMs
BU director
Project
Mgrs BCMs
BU director
Project
Mgrs BCMs
Accountable for delivering BU strategy
Delivery team
Portfolio
manager
Delivers, realises
benefits, achieves goals
Board

9. PfM needs good Governance
Alignment to
business strategy
(demand prioritisation)
In flight delivery
(Managing complexity &
ensuring delivery)
Value realisation
(Measuring & tracking
benefits)
£ £
Stopped
initiatives
Continuing
initiatives
New
initiatives
Corporate
goals
Delivery
managers
Portfolio
governance
Investment appraisal
Prioritisation
Investment Boards

10.  Focused on business performance
– overall strategic business outcomes is the key measure
 Having proactive & visible senior management commitment
 Operating within a consistent & robust governance
 Ensuring all projects aligned with strategic objectives
 Co-ordinated through a strategic portfolio office
 Shared culture & associated behaviours
How can portfolio management succeed?
(MoP® )

11. 11 © P2 Consulting
So what does good look like?
Lead
PORTFOLIO OPTIMISATION
 Quantify what value means
 Optimise a portfolio that balances value
against cost, being mindful of delivery risk
ENGINE ROOM
 Efficiently manage the Standards, Governance
and Information Heartbeat for the Portfolio
 Provide ‘early warning’ & decision making
support to the portfolio board
ASSURE CHANGE ACROSS THE BUSINESS
 Assure delivery standards through deep dives
and reviews
 Providing challenge and support to ‘up the
game’ of the change portfolio.
DRIVE DELIVERY
 ‘Air-Traffic Control’ for the Portfolio to
measure and mitigate risk
 Own the delivery risk of the portfolio and
actively inform optimisation
Leadership
Bring true Leadership across the
Portfolio to drive delivery and bring
objective decision-making
Back the right ideas –
selection for optimisation
Set them up for success –
establish the machinery for
success
Execute with Excellence –
Drive delivery and mitigate
portfolio Risk
Reap the Rewards –
continual assurance and
support to drive out benefits

12. 12 © P2 Consulting
 High performing organisations:
 Back the right ideas
 Set them up for success
 Deliver with excellence
 Reap the rewards
What is a High-Performing Organisation?
Systematic prioritisation and selection against clear and
concise strategic goals
Ability to design, plan, organise and mobilise projects to
enhance the chances of success
Leadership capability and capacity to ensure complete
control in delivery with minimal risks
Comprehensive engagement with the business and clear
accountabilities to drive benefits

13. 13 © P2 Consulting
Organisational Strengths &
Weaknesses
Miracle-Worker (MW)
Yes – they do exist! Despite poor
project selection, set up and mediocre
delivery, the business drives value
from change, but this is rarely
sustainable and usually has a major
impact on day to day operations
Down-Grader (DG)
The strategy is good but value leaks
through poor execution and even
worse business readiness and
benefits delivery. Action is required
to prevent good money being thrown
after bad.
Poor Finisher (PF)
Strategic thinking is average, but the
Project team makes the best of a
poor start. Without the right business
leadership and accountability,
however, the Titanic still sinks.
Late Flourisher (LF)
With poor project set-up and even
worse project management, the
business backs the right
opportunities and snatches victory
from the jaws of defeat – marginally
better than the Miracle-Worker
Patchy Loss-Maker (PL)
If only projects were designed,
planned and mobilised better and the
business geared up to generate value
from investments…if only!
Patchy Hero (PH)
Despite it’s woeful Strategic
Planning Department, strong
corporate Governance and heroics
from the Operations teams, means
the party doesn’t end in tears
 Organisations can hence be categorised … a few examples:-

14. 14 © P2 Consulting
Portfolio Management in the Round
Thinking in Lines Thinking in Wheels
Mechanistic Environment
Risks are quantifiable
Solutions derived from key principles
Clear Boundaries (cost/time)
Limited impact of stakeholder perception
Low complexity & interdependencies
Organistic Environment
Risks are subject to wide confidence ranges
Solutions derived from context & trial and error
Fuzzy Boundaries
Stakeholder perception has major impact
High complexity & interdependencies
Reductionist approach is more effective
when
Holistic approach is more effective when
There is a nominal solution There is an optimal solution
Value is process &
methodology driven
Value is people & creativity
driven

15. 15 © P2 Consulting
 Management’s job is to build a creative organism that is resilient enough to
recover when failure occurs, and
 That allows people from different disciplines to work together effectively.
This requires an environment of understanding, trust and respect.
 Leadership creates the team, the team creates the value
 The Dailies - Regular show and tells for everyone – but ultimate power sits
with the person driving the activity
 The Brain Trust – identify the problem, fix it, move on
 ‘Technology inspires art, and art challenges technology’
 Pre-Mortems and Post-Mortems
 The Shorts – inspiring fresh blood…
What is creative leadership?
Ref: Catmull, Ed. “Creativity, Inc.: Overcoming the unseen forces that
stand in the way of true inspiration.” – Catmull, Ed (2014)

16. 16
Strategy and portfolio alignment
16
Source: 2015 APM portfolio management SIG survey
Some
connection in
some areas,
but quite a lot
of disconnect
41.4 %
Quite closely
aligned and
connected in
most areas
42.9 %
Almost total
connection
& alignment
15.7 %
© Copyright APM Portfolio Management SIG 2016
Just under half of
organisations surveyed have
“quite a lot of disconnect”

17. 17
APM’s Portfolio Management
Specific Interest Group

18. 18
SIG Committee – 2016-17
Simon
Darby
Mike
Florence
Stephen
Parrett
Peter
Glynne
Lynne
Ratcliffe
Paul
Morgan
Glenn
Jones
Adam
Skinner
Nancy
Olson
Steve
Leary

19. 1. Promote awareness of portfolio management practices
2. Provide an active forum to share experiences, ideas, tools,
techniques and challenges
3. Encourage cross-professional collaboration
4. Contribute to the development of best practice
… and so help organisations achieve their corporate strategy or
strategic intent
Purpose of the SIG
19

20. Developing New Knowledge
(creating/finding useful
material - “what works”)
Working with the APM
(collaboration with other SIGs,
Branches and pan-APM initiatives)
Engaging SIG Membership
(making available opportunities to
participate in activities)
Engaging with the CxO Community
(supporting APM research and other
initiatives to reach this group)
Disseminating Knowledge
(providing access to PfM
Knowledge resources)
1. Promote awareness of portfolio management practices)
2. Provide an active forum for interested professionals (e.g. share
experiences, ideas, tools, techniques and challenges)
3. Encourage cross-professional collaboration
4. Contribute to the development of best practice in this emerging field
A
I
M
S
PfM SIG Strategy (Aims & Themes)
All designed to
help organisations
achieve their
corporate strategy
or strategic intent

21. Conference
(2016)
Publish Outputs
Blog SIG article
in Project
NW article
in Project
Presentation Analysis etc
APM
Internal
Report to
CMLG-SSG
Report to
CMLG-SSG
Report to
CMLG-SSG
Report to
CMLG-SSG
Report to
CMLG-SSG
VF VF
SIG Plans 2017-18Update Strategy & Plans
Conference
(2017)
Planning – Phase 1 (Design)
Planning – Phase 2 (Content)
Planning – Phase 3 (Finalisation)
Conference
Articles
outputs etc
Key:
TL = Thought Leadership;
PC = Project Challenge;
VF = Volunteers Forum;
SPE = Speaker-led Event;
DNK = Dev/Disseminating New Knowledge;
News = Newsletter
SIG “Road Map”
July - Sep Oct - Dec Jan - Mar April - Jun
2016 2017
Feedback
21
= Exploit via updated APM website (when available)
Publishing
& Comms
News News
Survey
(2012-15)
TL-1 TL-2 TL-3 TL-4
DNK DNKPC PC
Events
AGM
(5/7)
Joint + Branch
(SPE) (Yorks)
Webinar
(22/11) SPE AGM
Portfolio
Risk
Informal
Dinner Re-energise CxO Campaign

22. Two Major SIG Initiatives in 2017
 Launching today!!
 No. 1 - “Recognising the need to change - six telling signs”
 Three more to follow…….
“Managing the Portfolio”
* A new series of 4 SIG Opinion Pieces *
“Introductory Guide to PfM”
* The first PfM SIG publication *
 Based on practical experiences and will include real-life scenarios
 Sought by SIG members and the PfM community
 Increases the profile of the APM in this increasingly important area

23. Introductory Guide to PfM
 Based on practical experiences and includes real-life scenarios.
 Designed for and relevant to:
 people in their early stages of PfM roles, or PfM related roles
 anyone wanting a non-technical overview of PfM
 experienced practitioners keen to understand what represents good
practice
 Sought by SIG members and the PfM community
 Time is right as the SIG has matured over 6 years & 4 annual conferences
 Closes a gap in the APM resource library
 Increases the profile of the APM in this increasingly important area
* A new SIG initiative for 2017 *

24. “Managing the Portfolio”
No. 1 - “Recognising the need to change - six telling signs”
This series of reports will:
 Step through four key stages of thinking
 Provide meaningful insight into the practical issues facing leaders of
change across all industry sectors
 Challenge existing thinking
 Provide a fresh perspective on what makes portfolio management
successful in delivering corporate strategy
The 3 remaining reports will be:
‘Making sense of all of the change and gaining visibility: clearing the fog’
‘Prioritising and compromising: shaping the pathway’
‘Leading and optimising the change: delivering the overall prize’
* A new series of SIG opinion pieces *
Available Now!

25. The Six Telling Signs
1. Lack of coordination or alignment to business strategy
2. Scope of programmes not clear or overlapping
3. Behaviours that 'tell a story‘
4. Inability to quickly re-prioritse to changing circumstances;
5. Inability to balance resources with projects and programmes
6. Ineffective communication on change and organisational priorities.

26. SIG Conferences & Events
( Past/Present Gallery of Organisations Presenting)
26

27. 27 © P2 Consulting
 Adam’s contact details
Thank you very much
 Further Reading:
Adam Skinner
Managing Consultant
P2 Consulting
Adam.Skinner@P2Consulting.com
Linkedin: Adam Skinner
Mobile: 07803 260508
Further Readings:
• “The Geography of Thought” –
Nisbett, Richard E. (2013)
• “The culture map: Breaking through
the invisible boundaries of global
business.” – Meyer, Erin (2014)
• Catmull, Ed. “Creativity, Inc.:
Overcoming the unseen forces that
stand in the way of true inspiration.”
– Catmull, Ed (2014)

28. 28
 Appendices

29. 29
Role of Specific Interest Groups
within the APM
Creating &
disseminating
new knowledge
Providing
discussion
forums
Improving the
understanding of
“How to do it”
Producing
guides &
publications
Open to experts, beginners, specialists & generalists from all sectors
Putting on
conferences,
seminars etc

30. SIG Activities – Three Perspectives
Illustrating how PfM can help tackle business issues
Highlighting what PfM can do to support their aims
Demonstrating how to mobilise PfM for early value
Executives
Providing space to learn, debate and extend skills
Creating access to examples of PfM in action
Explaining PfM synergies with associated processes
Practitioners
Raising the profile of PfM (matching PgM & PjM)
Identifying pathways for aspiring portfolio managers
Improving recognition of PfM as a core capability
Profession

31. 31
Summary
Purpose & aims
Strategy & themes
Plans
SIG members
Programmes
& Projects
Vision
Corporate
goals
Corporate
strategy
Pressures
Portfolio &
Business Area
Plans
BAU work
Benefits
Corporate
goals
Business performance
Portfolio governance
Prioritisation model
Existing change & business as usual
Current
performance
Organisation
values

32. 32
Presenters Topic and Links
Nicky Bloomer, Head of Portfolio
Management Division, Office for
National Statistics
Portfolio management in the
government sector - the ONS journey.
Tim Ellis, Knowledge Specialist,
PMO Functions & Capability
Development, TfL
Tanya Durlen, Head of Portfolio and
Benefits Realisation, Surface
Transport Strategy; TfL
Characterising Portfolio Management
in Transport
Terri Harrington, Head of Portfolio
Insight, Infrastructure & Projects
Authority, part of the Cabinet Office &
HM Treasury
Learning the lessons of the past - a
systematic analysis of Government
Change Delivery and what we've
learned from it
Dan Jones, Head of Enterprise
Portfolio Management Office (EPMO),
Nationwide Building Society
Designing the Portfolio – a method to
cope with Business demand for
Investment.
Mike Ward, Consulting Director at
RSM and acts as the Design Authority
for the Capability Improvement
Programme at Sellafield
Establishing Portfolio Management
within a large multi-disciplined energy
sector organisation.
Stuart Westgate, Programme
Development Director (Internal
Sponsor), High Speed Two Limited
(HS2)
HS2’s strategic approach to managing
a combined portfolio of organisation
creation, infrastructure development
and delivery, as well as the integration
of wider benefit and regeneration
initiatives.
Successful 2016 Conference

33. 33
Successful 2017 Conference
Presenters Topics
Sandie Grimshaw,
Global Leader, Portfolio and
Programme Management, PwC
Portfolio Management
and Brexit
Richard Moor, Head of Portfolio,
Royal Mail Letters and Network,
Royal Mail
The Journey of a
Portfolio - Privatisation
and beyond in Royal Mail
Tracy Wadsworth, Head of Group
Change Practice, Lloyds Banking
Group
Portfolio Management -
Past, Present & Future
Peter Glynne, Member of the
PfM SIG Committee
Recognising the need to
change - six telling signs
Max van Vessem, Vice President
and Head of Global Programme
Management, GMS, GSK
Portfolio Management
in a Global
Manufacturing
Environment

34. 34
APM (BoK+)
Portfolio management
is the selection,
prioritisation and
control of an
organisation’s
projects and
programmes in line
with its strategic
objectives and
capacity to deliver.
The goal is to balance
change initiatives and
business-as-usual
while optimising
return on investment.
MoP®
PfM is a coordinated
collection of
strategic processes
and decisions that
together enable a
more effective
balance of
organisational
change and BAU
"MoP® is a Registered
Trade Mark of AXELOS
Limited"
National Audit
Office
Prioritisation of all
an organisation’s
projects and
programmes in line
with business
objectives and
matched to its
capacity to deliver
them.
Cranfield & Open
University
Managing a diverse
range of related and
unrelated projects
and programmes to
achieve the
maximum
organisational value
within resource and
funding constraints.
.
Portfolio Management - definitions