Chapter 5Introduction to Enterprise Portfolio Management
I’ll start this section by establishing a framework and structure for basic portfolio management, then start building a case for new ways to approach portfolio management. I’ll introduce essential rules and principles to enable Lean/Agile/Adaptive Portfolio Management. Traditional portfolio management and most books, courses, and guidelines for portfolio funding and budgeting processes are anything but adaptive! According to an HBR article,1 most organizations react slowly to emerging threats and can’t seize emerging opportunities: 70% don’t effectively shift funds, 80% can’t shift personnel to support strategy, and 78% can’t truncate failing initiatives or exit declining businesses.
I call these portfolio management approaches I’m about to introduce “new” because they’ve never been published in a comprehensive manner before this book, but my colleagues and I have been implementing and refining these techniques with enterprise clients for nearly two decades.
As illustrated in Figure 5.1, enterprise portfolio management has three major components. Each component has its own distinct capabilities for effectiveness.
Figure 5.1 The major components of portfolio management.
The Supply Side
Delivery capacity, funds for investment, value chain inputs, and other resources exist on the supply side of the portfolio management ...
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