Portfolio Balance Failure

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I have a simple message for managers who oversee product development portfolios.

Portfolio Balance is Misguided.

The problem is no one knows what the balance must be. Instead, we make it up. That’s right, the gurus and experts make up numbers to impress you. Portfolio balance is BS.

It would seem portfolio balance should guide strategy. But it can’t. If you try to solve strategic issues through portfolio management, you’re too late. Projects have already started, and you’re just shifting resources.

Changing The Portfolio

A notable academic recently stated how over 80% of organizations have unbalanced portfolios. The research, he said, points to how companies have too many small projects underway.[1] No doubt this statement is true. But his conclusion that it’s a balance problem is misguided. His 80% statement exploits the view that balance is good, and imbalance is not.

How do you know what balance should look like? Is it the ratio of small versus big projects? Are there other measures like risk and resources or markets and technologies needing balance? With this view, managing multiple balances may itself be a balancing act.

It baffles me when an executive tries to solve strategy issues with portfolio balance. Changing the resources assigned to a project doesn’t make the project better. It just changes the investment into each project. It can be like shuffling the chairs on the deck of a boat. It doesn’t help much. So what do you do?

The Real Challenge

The real problem is not balance. The real problem is a lack of a good strategy, well communicated. The challenge is in how best to carry out smart product line strategies.[2] It’s a product line’s success that matters, not portfolio balance. Who cares about portfolio balance after a product line fails?

It’s time to retire portfolio balance. It’s doesn’t help manage a portfolio better. Instead, PMOs should strive to answer two questions: Will the portfolio carry out projects that make each product line successful? And, are projects underway that are not critical to the strategy’s success? The PMO should focus on carrying out smart product line strategies, not seeking a portfolio balance.

This demands a well-defined roadmap, one that shows the work to make a good product line strategy successful. The focus then shifts to carry out the roadmap and achieve the strategy’s goals and objectives.

Make Product Lines Successful

Portfolio Management must work to carry out one key task: To complete the work earmarked in the roadmap to make a product line strategy successful. Resource management then works to keep that job on schedule, not to create balance.

I share how to create a great product line strategy in my book. It’s entitled The Profound Impact of Product Line Strategies. This topic is crucial to maximizing portfolios. I explain what it means to focus on strategy execution. It combines front-end scouting and idea work with development projects. And I make clear the PMO’s job is not to enable top managers to voice a need for the correct portfolio balance.

The challenge is to create great product line strategies to drive value into the portfolio. It’s not only manage resources on development projects. This demands companies to find and create new opportunities. It’s not enough to oversee just development work. Portfolios need to gain from innovation. And that’s the role of product line strategies and roadmaps.

But PMO’s can’t move beyond traditional practices on their own. Product line teams must create the good strategies and their roadmaps. This takes work. And it demands product line teams learn how it’s done. If your job is to manage development projects, product lines, or a portfolio, consider learning product line strategizing and roadmapping. You’ll find it both insightful and impactful.

Important Help

Please take advantage of The Adept Group’s knowledge and experience. You may wish to get my book The Profound Impact of Product Line Strategies. Or for team learning, consider attending my one-day Master Class or conducting an on-site workshop specific to your company and its products.

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[1] Marketing email distributed on behalf of and signed by RG Cooper.

[2] See  https://adept-plm.com/from-portfolio-management-to-product-line-roadmapping/

 

Profound Impact of Product Line Management

Book – The Profound Impact of Product Line Strategy–
Buy at Amazon

 Product Line Strategy Workshop

MasterClass – Creating Powerful Product Line Strategies and Roadmaps

 Why Product Line Strategy Matters

Whitepaper– Good Product Line Strategy Matters. Here’s How to Create One.

 

As always, please feel free to contact me directly to discuss any and all aspects of improving organizational productivity toward new product development.

Contact me at:     paul.oconnor    at   adept-plm.com
+01-904-373-5428

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