The Execution Challenge

Chapter 5Strategic Portfolio Management and Effective Strategy Execution

This chapter will explore different types of portfolios that facilitate effective strategy execution. We will focus on understanding the two primary portfolios that need to be properly managed for effective strategy execution—the project portfolio and the business capability portfolio—though we will discuss other asset portfolios as well.

Traditionally, portfolio management was separated from strategy development and execution, but it is becoming clear that effective enterprise-wide business strategy execution requires an integration of business strategy development, strategic business architecture–related functions, and enterprise portfolio management. A solid strategy is no good if it can't be well executed.

According to Gartner, organizations that are highly effective at strategic portfolio management are twice as likely to achieve better business outcomes as those that aren't.¹ The focus on digital business and digital transformation means that the traditional, siloed, style of portfolio management is inadequate as siloed portfolios cannot work in isolation to provide the organization with a true picture of strategy execution and overall organizational performance. Integrated strategic portfolio management is needed for effective strategy execution and to optimize the value of all major organizational investments.

What Is Portfolio Management?

As discussed in Chapter 1, the concept of portfolio management ...