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Principles of strategic portfolio management

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Principles of good strategic potfolio management and dimensions of great portfolio results.

Principles of good strategic potfolio management and dimensions of great portfolio results.

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  • 1. Principles of Strategic PortfolioManagementDavid MathesonPresident and CEOwww.smartorg.com
  • 2. © 2000-2012 SmartOrg. | Confidential and Proprietary.2David Matheson—Session ChairmanDr. David Matheson has helped senior management of firms in theUnited States and Europe improve their results from portfoliomanagement, product development, innovation, R&D, capitalinvestment and strategy, and is an expert on measuring value andmanaging uncertainty.His practical experience covers a wide variety of industries, includingprinting, softwaredevelopment, biotechnology, telecommunications, chemicals, pharmaceuticals, medical devices, manufacturing, electric power andentertainment.He is co-author of the best selling book, The Smart Organization:Creating Value through Strategic R&D (Harvard Business School Press)and has authored numerous articles on innovation, portfoliomanagement and decision making.In addition to SmartOrg, his executive roles include: currently memberof the board at Photozini, Inc. and prior to founding SmartOrg in 2000, aprincipal at Strategic Decisions Group.His Ph.D. is from Stanford University, where he currently teaches onStrategic Portfolio Management and other topics at the StanfordCenter for Professional Development
  • 3. Improving capability to discover value.3Life science Aerospace Technology Other© 2000-2012 SmartOrg. | Confidential and Proprietary.
  • 4. Software and services to help you build yourcapability.Portfolio Navigator Software Services© 2000-2012 SmartOrg. | Confidential and Proprietary.4Evaluate and tracksources of value,risk and upside.Focus stakeholderson critical issues.Aggregate andcompare projectsand portfolios.Jim Matheson, Ph.D.ChairmanNadine Oeser,European ConsultantGreg Lorch,ConsultantSomik Raha, Ph.D.ConsultantGrant Steinfeld,SoftwarePeterMcNamee, Ph.D.Solutions &Software• Training & Coaching• Management Consulting• Pilots & ImplementationProjects• Customization
  • 5. SPD-Framework v15—5 © 2009 by Stanford Strategic Decision and Risk Management. All rights reserved.Strategic Decision and Risk ManagementA Professional Certificate Program
  • 6. © 2000-2012 SmartOrg. | Confidential and Proprietary.6
  • 7. Principles of good strategic portfolio management.© 2000-2012 SmartOrg. | Confidential and Proprietary.7AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 8. The three basic dimensions of great portfolioresults.© 2000-2012 SmartOrg. | Confidential and Proprietary.8WhatHowProcess:MilestonesGatesTimelineReviewsResources:AssignmentBudgetingConflictEconomic:PrioritizationEvaluationStrategyGreat portfolio resultsWhoDecisions
  • 9. Delivering A Billion Dollars– Lessons InPortfolio EvaluationKen Edwardsson – Global LeaderDow AgroSciences
  • 10. Dow AgroSciences is a good example of a company –Achieving more with less.© 2000-2012 SmartOrg. | Confidential and Proprietary. 10
  • 11. © 2000-2012 SmartOrg. | Confidential and Proprietary.Decision Focused— Choosing the Right Path byDeciding Where To SpendLong Learning LoopResults Focused— Running Well on the Chosen PathBy Managing How You Spend ItShort Learning LoopPortfolio Management Best PracticeStrategyExecutionResourceManagementCharterProjectsDevelopment StagesReviewIdeasValue CaptureProject ReviewDecisionValuePromiseCreate ProjectsPortfolio Management Project ManagementGating Process:• Singular projects• In depth reviews• Go/Kill decisions• Standards basedPortfolio View:• All Projects• Investment Types• Strategic AlignmentRequires – Both A Strategic View And A Tactical Focus11
  • 12. © 2000-2012 SmartOrg. | Confidential and Proprietary.Identifying key projectUncertainties and theirImpact (Value Drivers)Valuing Projects andCharacterizing alternativesSensitivityAnalysisProject RiskAssessmentTechnicalMarketExpectedFuture ValueHLikelyLIssues &Assumptions••••••••ProbabilityDistributionDecisionAnalysisInvestmentIntensityRisk RewardBal. PortfolioLessEmphasizedDecision and Risk Assessment ToolsPortfolio Management Best Practice12
  • 13. 13DAS Portfolio Management ResultsEBIT* CAGRSALES CAGR16%5%2001-2010CAGR Goal6%23%2001-07Actual CAGRGrowth + Return*Non-GAAP financial measure, excludes certain items© 2000-2012 SmartOrg. | Confidential and Proprietary.
  • 14. The core of portfolio management:making decisions.© 2000-2012 SmartOrg. | Confidential and Proprietary.14AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 15. © 2000-2012 SmartOrg. | Confidential and Proprietary.15
  • 16. Portfolio Management = The discussion of what to do about the gapbetween top-down aspiration and bottom-up reality© 2000-2012 SmartOrg. | Confidential and Proprietary.16Top-Down• Where do we want to go?• What do we need to getthere?Bottom-Up• What do we have in ourportfolio?• What should we keep,modify, shut down?Portfolio Manager Role• Set funding priorities• Allocate resources amongsegments• Balance innovation andincremental projects• Meet corporate financialgoals• Assure a steady stream ofsuccessful new products
  • 17. $-$50.0$100.0$150.0$200.0$250.0$300.02004 2005 2006 2007 2008 2009 2010Example top-down meets bottom-up: a growthgap.© 2000-2012 SmartOrg. | Confidential and Proprietary.17
  • 18. Line 1Line 2Line 3Line 4Line 1Line 2Line 3Line 4Aligned Decision Forum. The process drivesreal decision-making at all levels.© 2000-2012 SmartOrg. | Confidential and Proprietary.18PeopleStructureInformationPlayers compete to makedecisions or advance their ownagendas without an effectiveforum for joint portfolio decisions.Players deliberate, resolveconflict, and take actionsbased on cooperativediscussion.The process is unclearor most projects areexceptions to theprocess.Line 1Line 2Line 3Line 4Decisions are made using―gut feel‖ based onanecdotal information.Meaningful and relevantinformation is summarized atappropriate level of detail fordecision at hand.The process brings the rightpeople together, clarifies top-down aspirations and bottom-upreality, and frames decisionsabout prioritization and strategy
  • 19. About 40% of companies have difficulty with the AlignedDecision Forum.© 2000-2012 SmartOrg. | Confidential and Proprietary.19Take the survey at: http://spreadsheets.google.com/viewform?hl=en&formkey=dGk2TWdQUjJwT3J6YmIyUWU0VVYtU2c6MA#gid=0
  • 20. Here’s a case where the key to success was shifting thefocus to value creation.© 2000-2012 SmartOrg. | Confidential and Proprietary.20AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 21. © 2000-2012 SmartOrg. | Confidential and Proprietary.21
  • 22. Too many projects, not enough resources – what wouldyou do in this situation?• A high-tech packaging company built ontremendous innovation over decades in materialsand design.• Increasing global competition and erosion of itsadvantage.— Its products were increasingly undifferentiated.— Margins eroding dramatically.— R&D and NPD had in recent years failed to produce.• The portfolio was choked with R&D and NPDproposals.— CEO has asked for more innovation— Largely cost reductions and incremental projects.— New innovation was crowded out.— Lots of churn and debate as projects struggled to getresources.— They had 70+ projects and could only support about 15.© 2000-2012 SmartOrg. | Confidential and Proprietary.22
  • 23. Which approach produces the best result?• Business cases – CFO created a business case process thatgathered relevant data and put it in financial terms. Modeledafter successful capital investment process.• Project management – Assign clear project leadershipresponsibility, form teams, create plans with clear milestones anddeliverables. Pursue the best plans, hold people accountable.• Resource allocation – Core issue is that certain resources areoversubscribed. Create resource managers to assign keyresources based on guidelines and situation specifics.• Scoring rules – Define essential criteria, such as strategic fit, size ofopportunity, technical difficulty and investment. Assess score foreach project on scale of 1-5 on each dimension. Take weightedaverage to get figure of merit.© 2000-2012 SmartOrg. | Confidential and Proprietary.23
  • 24. Typical approaches often fail to resolve the real portfolioissues“Business cases strongly favored incremental projects.”“Project management methods created more work onprojects we would cancel.”“Resource allocation efforts abdicated the companies mostimportant investment decisions to relatively low-levelmanagers.”“Weighted scoring rules simply elevated politics to a newlevel of sophistication.”“When we got clear about value, many project leadersvoluntarily cancelled their own projects; they realized theycould better direct their efforts to higher-value projects.”“We reduced our portfolio from 70 to 20 projects, improvingthe return by more than 100%.”© 2000-2012 SmartOrg. | Confidential and Proprietary.24A High-Tech PackagingCompanyAPPROACHES THAT DID NOT WORKGOOD EVALUATION WORKEDToo many projects —how to sort them out?Reinventing the Product Portfolio: Session III – May 2010
  • 25. Line 1Line 2Line 3Line 4Line 1Line 2Line 3Line 4Value Creation Focus. The goal is to find thestrategy that maximize value creation.© 2000-2012 SmartOrg. | Confidential and Proprietary.25PeopleStructureInformationObjectives are driven bypersonal agendas,functional perspectives, andindividual biases.Individuals and groups thinkclearly about economic andstrategic issues and creativelyabout how to improve value.Metrics and analysis are not clearlyconnected to value creation, or theyare manipulated to advance personalagendas.Line 1Line 2Line 3Line 4Information selected tosupport personalagendas or positions.Irrelevant informationbrought to bear ondecisions.All the information needed toinform value creation, bothpositive and negative, areincorporated into a neutralevaluationsMetrics and analysis informunderstanding of economic outcomesand drive choices.
  • 26. About 55% of companies have challenges withValue Creation Focus.© 2000-2012 SmartOrg. | Confidential and Proprietary.26
  • 27. Next we see an organization lacking comparableevaluations and full collaboration in decision making.© 2000-2012 SmartOrg. | Confidential and Proprietary.27AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 28. © 2000-2012 SmartOrg. | Confidential and Proprietary.28
  • 29. Accelerating theDeployment of Technologyto Business OpportunitiesKevin Kimber –ChevronTexaco
  • 30. Role of Portfolio Optimization Process & Toolsfor Heavy Oil TechnologyLike many organizations, we faced significantchallenges…• Business needs for technology were not being met in atimely fashion• Corporate growth objectives demanding more for less• Technologists keeping projects alive too long• Inconsistent project evaluations• Not enough project failures• Difficulty comparing projects of different types• Limitations of thumbs up / down approach to projectprioritization 30
  • 31. The existing portfolio process was primarily a―roll-up‖ of business cases to justify projects.ProjectJustifications• Business CasesPortfolioDecisions• SubjectiveFactorsThis was a competitive, adversarial process, with very little quality inthe data, which severely hampered decision-making.31
  • 32. CT Heavy Oil met the challenges by implementing avalue-based, portfolio management process.Value-based, Portfolio Management ProcessProjectEvaluations• Specify & quantifyuncertainty• Clear standards• Give teams realdirectionPeer & ExpertReview• Transparency• Credibility &comparabilityPortfolioDecisions• Value-based• Solid information• StrategicalignmentUncertaintyTracking• Baselineassessments• Updates basedon evidence32
  • 33. A transparent process helped address the―garbage-in, garbage-out‖ problem.Commercial Value Given Technical SuccessRange of Uncertainty ($million)Improving Computational CapabilityShearingLSTSPerformance PredictionDow nhole Steam Profile Control2D NMRThin Sand ThermalDow nhole Steam Profile - New WellsCatalystRemote SensingSteam Inj Well BPSteam DistributionBio-UpgradingHeat ManagementImprove Hydrocoking ProcessWell GaugingHigh Mobility Ratio WaterfloodHOSGDReservoir Opportunity IdentificationVAPEXCold FlowHeavy Oil ChemistrySulfur & Metals RemovalCASH-100 0 100 200 300 400 500 600Project 1Project 2Project 3Project 4Project 5Project 6Project 7Project 8Project 9Project 10Project 11Project 12Project 13Project 14Project 15Project 16Project 17Project 18Project 19Project 20Project 21Project 22Project 23Probability of Technical SuccessShearingHeavy Oil ChemistryImproving Computational CapabilityBio-UpgradingThin Sand ThermalSulfur & Metals RemovalVAPEXCatalystHigh Mobility Ratio WaterfloodLSTSImprove Hydrocoking ProcessPerformance PredictionHOSGDSteam Inj Well BPReservoir Opportunity IdentificationCold FlowCASH2D NMRDow nhole Steam Profile - New WellsHeat ManagementRemote SensingSteam DistributionWell GaugingDow nhole Steam Profile Control0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80Project 1Project 2Project 3Project 4Project 5Project 6Project 7Project 8Project 9Project 10Project 11Project 12Project 13Project 14Project 15Project 16Project 17Project 18Project 19Project 20Project 21Project 22Project 23Project 24• Historically this was one of the mostchallenging issues• Process and tools key to overcomingProjectEvaluations• Specify & quantifyuncertainty• Clear standards• Give teams realdirectionPeer & ExpertReview• Transparency• Credibility andComparabilityPortfolioDecisions• Value-based• Solid information• StrategicAlignmentUncertaintyTracking• Baselineassessments• Updates basedon evidenceAfter: a value-based management processProject Comparison Tools33
  • 34. The result: acceleration of technology tobusiness opportunity.2003 2004 ImprovementNew ideasscreened22 35 60%Projectsinitiated6 9 50%ProjectsDeployed1 2 100%ProjectsTerminated3 6 100%34
  • 35. A major challenge in portfolio management:© 2000-2012 SmartOrg. | Confidential and Proprietary.35Saying ―no‖ to a good idea…In order to fund a better one…How do you make a ―no‖ stick?• Power• Persuasion
  • 36. The gold standard of persuasion:© 2000-2012 SmartOrg. | Confidential and Proprietary.36The political loser comes to the sameconclusion himself.This sucks forme but I have toagree it is theright priority.
  • 37. The silver standard of pursuasion:© 2000-2012 SmartOrg. | Confidential and Proprietary.37The political loser accepts that the process wasfair and accurate.This sucks for meand I think it’s thewrong choice, butat least they heardthe full story andmade a tough call.
  • 38. Credible, Comparable Evaluations. The processallows participants to make and accept decisions.© 2000-2012 SmartOrg. | Confidential and Proprietary.38PeopleStructureInformationLine 1Line 2Line 3Line 4Project evaluations areinternally inconsistentwithout underlyingmental models or logic.Information is selected tosupport individualprojects without regardfor consistency acrossprojects.Information comes fromknowledgeable sources,and is shared, vetted, andunderstood across theprojects.Common evaluationframework follows clearand comprehensiblelogic; common issues aretreated in common ways.Significant advocacy: the objectiveis to ―win‖ by having requestsgranted and gaming the system istolerated.Those whose preferredalternatives are rejectedfind the basis for thedecision convincing.
  • 39. Explicitly evaluating uncertainty was key to unlocking value in thenext company’s portfolio.© 2000-2012 SmartOrg. | Confidential and Proprietary.39AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 40. Reinventing the Product Portfolio: Session III – May 2010© 2000-2012 SmartOrg. | Confidential and Proprietary.40
  • 41. Go/No Go: Knowing What to Bank On Version 10.0, 6/07© 2006 Sprint Nextel. All Rights Reserved.41Before: The valuation guessing game…2007 2008 2009Revenue 3M 6M 9MCosts 6M 7M 8MMargin (3M) (1M) 1MPRO FORMAEffects of this approach Does not allow you to innovate around the business model, here thebusiness model is constant – subscription model Hides high areas of certainty Not the correct tool for highly uncertain businesses opportunities. Gives impression of precision based on difficult to supportassumptions.Assumptions: Take Rate Market Size Market Share Ramp Up …
  • 42. Go/No Go: Knowing What to Bank On Version 10.0, 6/07© 2006 Sprint Nextel. All Rights Reserved.42After: Focusing on driving value upEffects of this approach Each variable accounts for the range ofvariability Top three variables are clearly illustrated Helps to filter non-essential data and stayfocused!1: What is known / unknownabout key economic factors?e.g. Channel deal High: we use own channel,we go direct, we do dealwith X or Y Low: we stay in traditionalchannel, we do deal with Por Q, we need lots offloorspace2: What is the possible range ofthe factor given our uncertainty?e.g. Channel deal High: 25% Base: 10% Low: 5%NPV―GRAND SLAM‖ VALUATION$100M $450M$0MChannelDealMarginMonthlyFee5% 25%10%5%$5 $153: What is economic impact of that uncertainty?
  • 43. A company set up a new lab, with high expectations. Later theyasked, ―Is the new lab on track?‖© 2000-2012 SmartOrg. | Confidential and Proprietary.43• A Fortune 100 company acquired severalsmaller companies with good products in themarket, but not much of an R&D pipeline.• A new R&D laboratory was established withthe goal of “researching their way” tobecoming a world-class firm.• Since the lab was new, and the technicalareas were leading edge, they picked easytargets to get them onto the map soon.Is the lab on track? Will their labgenerate the hits required?
  • 44. A 1-month quantitative evaluation revealed a lack of the ―oysters‖needed to create block-buster products.© 2000-2012 SmartOrg. | Confidential and Proprietary.44Probability ofDevelopmentSuccess.1.2.3.4.5.6.7.8.91.00Expected Commercial Value Given Development Success($ millions)0 100 200 300 400 500 600 700 800 900 1,000PearlsBread & ButterOystersWhite ElephantsInnovation Screen
  • 45. After a quarter spent identifying more valuable commercialtargets, their portfolio had better odds of winning.© 2000-2012 SmartOrg. | Confidential and Proprietary.45Probability ofDevelopmentSuccess.1.2.3.4.5.6.7.8.91.00Expected Commercial Value Given Development Success($ millions)0 100 200 300 400 500 600 700 800 900 1,000PearlsBread & ButterOystersWhite ElephantsInnovation Screen
  • 46. Uncertaintyranges tend to bebase case + 10%.Embraces Uncertainty and Dynamics. Alluncertainties are treated explicitly over time.© 2000-2012 SmartOrg. | Confidential and Proprietary.46PeopleStructureInformationDeterministic thinkingand risk aversiondrive a quest forcertainty.Robust thinking aboutupside, downside, andoptions. Willingness to takeprudent calculated risks.Line 1Line 2Line 3Line 4Assumptions co-minglediscussions aboutknowledge,commitments andaspirations into pointestimates.Assumptions are made todefend a position.Disconfirming informationis suppressed.Information is robustlyrepresented in terms ofranges and probabilitieswith supporting rationalesfor the assessments.Discussion of uncertainknowledge are separatedfrom discussions aboutcommitments andaspirations.
  • 47. About 60% of companies have challenges withEmbracing Uncertainty.© 2000-2012 SmartOrg. | Confidential and Proprietary.47
  • 48. Unless carefully managed, the portfolio process cancreate unintended burdens.© 2000-2012 SmartOrg. | Confidential and Proprietary.48AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusiveCollaborativeProcessPrinciplesof SPM
  • 49. © 2000-2012 SmartOrg. | Confidential and Proprietary.49
  • 50. Have you ever encountered a spreadsheet withhundreds of inputs?© 2000-2012 SmartOrg. | Confidential and Proprietary.50Simplifiedlogical map of aspreadsheetonce in commonuse at Boeing(the actualspreadsheet istoo large toshow).
  • 51. Spreadsheet models can spin out of control creatingdrudgery and overhead.© 2000-2012 SmartOrg. | Confidential and Proprietary.51Spreadsheet modellacks a featureneeded in acase, feature isaddedData requirementsincrease foreveryone to supportmore complexmodelBroader AnalysisExpansion in scopeof portfolioMore projects ofdifferent typesaddedNew portfolio insightBenefitsincrease forevery projectaddedOverheadincreases as thesquare of thenumber ofprojects―Death by athousandcuts‖
  • 52. Adversarial processes – a spiral of increasingoverhead and distrust.© 2000-2012 SmartOrg. | Confidential and Proprietary.52Pressure to create awinning pitch createsa search for anadvantage andtendency toexaggerateConcern of beingmisled creates needfor extra scrutinyStaff and processcreated to overseeand make surepitches are goodones―You are asking for the rope youare going to use to hang me.‖
  • 53. Information available butbiased and not vetted.Documented for large Unitsonly.Inclusive, Collaborative Process. All stake-holdersparticipate and derive value from the process.© 2000-2012 SmartOrg. | Confidential and Proprietary.53PeopleStructureInformationPortfolio process serves somepeople (e.g. executives) and isnot in the interest of others (e.g.project leaders).All participants find theportfolio process usefulin accomplishing theirwork.Line 1Line 2Line 3Line 4Participants experiencelarge scale drudgery insupport of portfolioprocessBasis of decisionslost or informationis privileged.Basis of decision isstored and becomesa common repositoryof knowledge.Tools,methods,practices, etc.are efficient.
  • 54. Finally, it is all about clear commination and learning.© 2000-2012 SmartOrg. | Confidential and Proprietary.54AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 55. Reinventing the Product Portfolio: Session III – May 2010Reinventing the Product Portfolio: Session III – May 2010© 2000-2012 SmartOrg. | Confidential and Proprietary.55
  • 56. BIG MISTAKES IN EVALUATIONPEOPLE Treating a project evaluation as an analysis rather than as aconversation. Not having the right people in the room for theconversation. Not having a process for making the decision.TOOLS Use of scoring grids, strategic buckets or other tools that lack thepower to provide real insight and drive a lasting business decision.VALUE Failing to bring an evaluation to the bottom line prevents realdiscussion of business issues and tradeoffs. Narrow view of valueas NPV. Undocumented assumptions lead people to believe that aparticular value metric is more comprehensive than warranted.UNCERTAINTY Critical issues are covered up using assumptions rather thanexplicitly quantified as uncertainty. Failure to evaluate, vet, andlearn about uncertainties. No understanding of the businessesability to manage risk and uncertainty.Source: Robin Karol, CEO of PDMAStrategic and Operational Portfolio Management Conference, 2006© 2000-2012 SmartOrg. | Confidentialand Proprietary. 56
  • 57. © Inspire Pharmaceuticals Inc., all rights reserved. Used with permission. 57New Corporate StrategyPatentGrantedCompetitiveProduct ApprovedTechnical SetbackNPV Given Technical SuccessProbabilityofTechnicalSuccessWhat can we do with this asset?Bread & Butter PearlsWhite Elephants OystersInnovation screenPositivePhase 1PositivePhase 2RegulatorySet-backInitialPerceptionIPuncertaintyaddressedImprovedStrategy
  • 58. Line 1Line 2Line 3Line 4Clear Communication and Learning. Informationis freely shared and updated.© 2000-2012 SmartOrg. | Confidential and Proprietary.58PeopleStructureInformationResults areused to blame,punish,reward, etc.Results are usedto improveproject andportfolio value.Results are used tomeasure progressand hold peopleaccountable.No mechanismsfor tracking,feedback, andlearning.Varianceand cost /scheduletracking onlyThe focus ison the mostavailableinformationInformation is gatheredbased on the quantifiedbenefits of fillinginformation gaps.Uncertainties are trackedand updated based onnew evidence, anddecisions are updatedappropriately
  • 59. The design challenge is applying these principles in away that best fits the situation.© 2000-2012 SmartOrg. | Confidential and Proprietary.59Aligned DecisionForumThe process drives real decision-making at alllevels.Value Creation Focus The goal is to find the portfolio strategy thatmaximizes value created for the organization.Credible, ComparableEvaluationsThe information and evaluations in the processallow participants to make and accept decisions.Embraces Uncertaintyand DynamicsAll uncertainties are treated explicitly andupdated over time.Clear Communicationand LearningInformation is share freely, performance istracked, and assessments are routinely updated.Inclusive,Collaborative ProcessAll stakeholders participate openly and derivevalue from the process.Principles of Strategic Portfolio Management
  • 60. Try assessing your own organization:www.smartorg.com/PrinciplesSurvey© 2000-2012 SmartOrg. | Confidential and Proprietary.60AlignedDecisionForumValueCreationFocusCredible,ComparableEvaluationsEmbracesUncertaintyand DynamicsClearCommunication& LearningInclusive,CollaborativeProcessPrinciplesof SPM
  • 61. SmartOrg® provides software and services to help companies evaluate their opportunitiesand make the best decisions about where to invest, especially when the future is cloudedwith uncertainty. Customers use SmartOrg® to build their capability in driving innovationfrom idea to commercial results and in selecting projects, improving returns in theirportfolio.SmartOrg® helps companies to attain the highest value from projects and portfolios.855 Oak Grove, Suite 202Menlo Park, CA 94025 USAT: +1.650.470.0120info@smartorg.comwww.linkedin.com/company/smartorg@smartorginc© 2000-2013 SmartOrg. | Confidential and Proprietary.61