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The Problem: We’re Stuck • Technology and globalization keep changing the game – Extraordinary opportunities, each also a threat • We must engage with these new growth opportunities – But face massive internal resistance to reallocating resources • Year in, year out, we end up with the same old portfolio – Nothing new ever achieves materiality—we are well and truly stuck • How can we achieve escape velocity? – How do we free ourselves from the pull of the past?
Living in ―VUCA‖ Timeshttp://www.zeislerassociates.com/VUCA.html
Success Factors in VUCA World • Always retain a clear vision against which judgements can be made, with agility to flex and respond appropriately to rapidly unfolding situations. • Provide clear direction and consistent messaging against a backdrop of continually shifting priorities, supported with the use of new virtual modes of communication where necessary. • Anticipate risks but don’t invest too much time in long-term strategic plans. Don’t automatically rely on past solutions and instead place increased value on new, temporary solutions, in response to such an unpredictable climate. • Think big picture. Make decisions based as much on intuition as analysis. • Be curious. Uncertain times bring opportunities for bold moves. Seize the chance to innovate. • Encourage networks rather than hierarchies – as we reach new levels of interconnection and interdependency collaboration yields more than competition. • Leverage diversity – as our networks of stakeholders increase in complexity and size, be sure to draw on the multiple points of view and experience they offer. Doing so will help you expect the unexpected. • Never lose focus on employee engagement. Provide strategic direction, whilst allowing people the freedom they need to innovate new processes, products and services. • Get used to being uncomfortable. Resist the temptation to cling on to outdated, inadequate processes and behaviours. Take leaps of faith and enjoy the adventure.http://www.impactinternational.com/blog/2012/01/leadership-vuca-world
PMI’s Pulse of the Profession 2012 – Focus Areas• Organizations will renew their focus on talent development as they look to grow and gain competitive advantage in new markets.• Tight economic conditions will continue to force the issue of good project portfolio management.• As organizations continue to strive for agility in order to leverage ever-shifting market conditions, change management and project risk management will become even more important core competencies.• The desire for organizational agility will also lead to increased use of iterative/incremental project management methods such as agile and extreme.• Despite tight economic conditions, organizations have been and will continue to increase their focus on benefits realization (in addition to cost and time) as a project and program success metric
Key issues around PfM• Prioritization – Risk vs. Reward• Planning horizon – Short-term vs. Long-term• Resource allocation – All eggs in a basket vs. Peanut-butter spread• Manage Portfolio Value – Feedback, review and rebalancing
Managing a Portfolio The Three Horizons Model High Growth Businesses Today’s revenue growth + Horizon 3 tomorrow’sAccumulated Total Returns 36 to 72 months cash flow Current Businesses Horizon 2 Growth Options Generate 12 to 36 months today’s cash Options on flow future high-growth businesses Horizon 1 0 to 12 months Expected Window of Returns Figure 2.4
Long-term planning is dead!http://www.chasingsunrises.com.au/images/chart1.png
Revenue Profits Growth ConsumersAll woods behind one arrow!
How often do you review Portfolio?http://www.patentpracticeliability.com/uploads/image/too%20late(4).jpg
To conclude…―VUCA‖ is the new normal. Darwin at serious work!Yesterday was more about Production and Operations.Today is more about Creativity and DesignDon’t put all your woods behind one arrow. Spread yourbets intelligentlyRapid learning cycles and an ability to iterate fast are non-negotiable.Constantly review and rebalance your portfolio before it’s―too late‖
References• The Standard for Portfolio Management, 3/e, 2013• http://www.best-management- practice.com/gempdf/Capital_Investment_Governance_White_Paper_Dec 11.pdf• http://esi-intl.in/download/Top-10-Project-Management-Trends-for- 2013.pdf• http://www.slideshare.net/hitesh447/portfolio-management-presentation• https://www.bcgperspectives.com/content/Classics/strategy_the_product _portfolio/• http://www.slideshare.net/msproject/gartner-be-prepared-for-the-future- of-ppm-v2012• http://blogs.hbr.org/ashkenas/2012/09/manage-with-a-portfolio- mindse.html• http://www.pmi.org/~/media/PDF/Research/Portfolio-Management.ashx• http://www.stage-gate.net/downloads/working_papers/wp_12.pdf• http://www.slideshare.net/anandsubramaniam/project-portfolio- management
Finally…―If one sticks to the ideathat, once set, a planshould not be changed, abusiness can’t exist forlong.‖ – Taiichi Ohno