Adapt to Win

Chapter 7Key Principles and Practices for the Supply Side of Portfolio Management

We established that portfolio management is composed of three major functional areas, the supply side, the demand side, and the matching function, each having a unique set of capabilities and competencies for effectiveness.

Let’s zoom down in elevation and explore some practical principles and practices that enable success in portfolio management’s supply function. It may surprise you that a book ostensibly focused on strategy, OKRs, and portfolio management would devote many words to managing and measuring delivery capacity, but knowing your actual capacity is a foundational prerequisite to effective portfolio management. In the vast majority of situations, I strongly advise organizations to obtain accurate measures of supply, including delivery capacity of all critical production resources before attempting to push major changes on demand-side sponsors and stakeholders; otherwise, delivery forecasts will continue to be violated, and distrust and antagonism will be exacerbated—hardly the outcome we desire from our initiative to improve portfolio management.

Measuring Capacity

There are three major stages in developing the capability to measure capacity accurately. First, stabilize the delivery function to make it observable as a system. Second, measure and track output over time. Third, reduce variability to a level that makes production predictable with high accuracy.

Measurement of capacity ...