I am probing a bit more deeply into a concept I recently introduced called “Portfolio Thinking.” As the term implies, Portfolio Thinking is a way of thinking that is unique from other ways of thinking. More importantly, Portfolio Thinking is a mental framework that leads straight to Decision Making.
We make decisions constantly. When we avoid making a decision, we have made a decision of a sort. Sometimes, no decision is the most important decision. Our decisions add up. Our decisions collect and combine and collide and they lead to real world impacts. Oh yes, our decisions change the world.
How we think about our situation determines how we decide what to do. This is not a particularly extraordinary insight, but it’s worth dwelling on it for a minute. So how do we think? In particular, how do we think about our projects?
1. What are we spending our available resources on now?
There’s no clearer indicator of our actual priorities that what we are currently doing. We may like to think that we are focused on A, while in fact we are focused on B. We may be quite able to convince ourselves that A is the priority, whereas B is where we spend our time. Perhaps we still work on B because it is familiar and safe, or near at hand. If we cannot look squarely at where we are “spending our available resources” as of today, then we are lost before we start.
2. Who are we and what are we trying to accomplish?
Once we have looked at what we’re actually doing, we can then ask ourselves, who are we? We may indeed be focused on A, as we had hoped, but now we can ask ourselves, is that right? In many ways, agile management is all about continuously asking ourselves this question. It’s not about being indecisive. It’s not about lack of focus. It’s about continuous refinement. Once we can clearly define who we are and what we are about, we can then figure out what we want to accomplish. Perhaps we can do this the other way around, but I would rather start with self-awareness. A quick look, for example, at the mission for the CDC: “To promote health and quality of life by preventing and controlling disease, injury, and disability.” That’s who they are, or at least who they want to be. Now, what are they trying to accomplish?
3. What are the investments that will provide the greatest leverage?
This part requires creativity and leadership. Unless we are talking about a brand new organization, we are already invested in a set of priorities. But we can re-invest. Just because we are spending our time and money on one set of activities, that doesn’t mean we have to continue to spend our time and money on those activities. Where do we invest? It very well could be that shifting our investments might cut cost in half and double the value, and the reverse is also true. This is the process of prioritization. It is a continuous process, and not a point in time event. Budgeting cycles may force a certain fixation mindset, but beware of sticking with it to stick with it.
4. How many investments can we successfully take on at a given time?
The key word here is successfully. We can take them all on, but not successfully. You cannot pour 2 cups of water into a single cup without making a mess. Most organizations are fundamentally resource constrained, which means that we cannot say yes to everything. If I have 100 people, I can probably take on no more than 4,000 hours of work per week. It’s pretty simple math really. Not only are organizations resources constrained, but they are skill constrained. Not everyone can do everything. This is the management part. We need to set the right assignments, team configurations, team incentives. This is especially true in IT. 1 FTE does not equal 1FTE.
5. What is the best sequence of those investments?
This part requires coordination, communication. We tend to get trapped inside the boundaries of our reporting structures, which leads to misaligned incentives and power skirmishes. But when we are doing Portfolio Thinking, we need to think across those boundaries and figure out the best sequence of our project investments. This part can often mean the difference between tremendous success and absurd failure. Do we work on underlying plumbing prior to developing the user experience? Do we do research before we do development? Do we do the scale-ability testing before we market our new service to the world?
Demian is the CTO of Innotas. As founder and CEO, Entrekin oversaw marketing, product development, sales and services for the company. Today, he focuses on strategic product direction. Prior to Innotas, Entrekin co-founded Convoy Corporation and was Chief Architect of its initial products. In that role, Entrekin helped the company lead the middleware market with an annual growth rate of 670 percent and played an instrumental role in Convoy’s subsequent acquisition by New Era Networks in 1999. A recognized thought leader in Project Portfolio Management, Entrekin has published numerous papers on PPM and his blog (PPM Today) explores current issues related to successful PPM implementation. During his 18 year career, Demian has assumed leadership roles as a consultant and as an entrepreneur, delivering commercial and corporate database applications. Demian holds a B.A. in English from UCLA and an M.A. in English from San Francisco State University.