How do you select a project portfolio with confidence?

Effective portfolio management relies on three key pillars: 1 - A well-defined and clear organizational strategy spread throughout the organization with OKRs and KPIs agreed at all levels. 2 - Organizational and project portfolio management maturity of key leaders and stakeholders. 3 - Definition of clear criteria agreed with all areas, such as, HES, IT, Operations, among others. This is essential for the organization to have a balance of criteria aligned with the organizational strategy. Another important point is to define a maturity criterion for the ideas mapped as possible projects in the approved portfolio. An idea with low maturity should not be approved until it has a minimum level of maturity defined by the organization.

Portfolios are not a collection of projects to play on one’s strengths and weaknesses. It’s a collection of projects that play on your strengths only. Confidence comes from areas of strength, not weakness, and that confidence has to extend to ensuring you transfer those projects to your colleagues with the strengths you lack. Working with high-performing teams that work to their strengths delivers effective organizational value. Know what you can achieve, even if it’s incremental growth and deliver on that consistently; that will not only build confidence in your abilities, it will build confidence in the organization with your abilities to deliver.

As mentioned the first step has to be the measures taken to promote transparency to the goals and the defined criteria. If you are going to carry everyone along on the journey the least we can do is tell them where we are going, this makes it possible for people to feel free to call out when the proverbial bus is heading in the wrong direction. Transparency helps to promote some kind of empowerment and accountability for people to speak up when they perceive a misalignment between their objectives and goals.

I would additionally add also a project classification criteria to help decision making based on the project impact on your organization, - if it helps the company to grow (A projects) - if it helps to streamline costs and performance (B projects) - if it is necessary to keep the operations running (C projects) A good mix of each is necessary for any organization.

?? In my experience, while criteria and goals are vital, the mechanism to prioritize is just as crucial. ?? Prioritization Matrix Use a matrix to weigh projects against organizational criteria. Projects that score highest are more aligned. ?? Dependency Mapping Visualize dependencies between projects. This helps in understanding sequence, risks, and mutual impacts. ?? Feedback Loops Establish channels for stakeholder feedback. Iteratively refine the portfolio as market or strategy changes. ?? Regular Review Cycles Set a fixed schedule to reassess the project portfolio. As priorities shift, projects should too. ?? Finally, remember that portfolio management is dynamic. As the business landscape changes, so should your portfolio.

I would add that an integral component of the project prioritization criteria should include both strategic fit and a sense of urgency.

This prioritisation stage is perhaps the most challenging step. Every member of the Exec will have a different view on priorities. There is no way to make the process 100% scientific and data-driven. Emotions and gut feel will likely play a part in the decision making. One key challenge is deciding how much time to invest in fact finding, project shaping (boundary setting, impact analysis) and cost/benefit modelling. This generally requires valuable time from many parties, including the sponsor, finance and often IT. I would recommend creating a simple card for each project, let each sponsor present their projects at the Exec and then take it offsite with CEO, CFO and either COO/CCO/CIO (depending on business) to sort and prioritise.

One of the purposes of implementing a portfolio is to assure the organization remains sustainable in their business. This is done by assuring governance and goals are reached without compromise.

There are a number of tools out there that can be used to facilitate the process of selecting and balancing your portfolio, you just need to be able to decide on the ones that best suit your company's needs and provides insights into choosing the right projects, some additional tools are Value Proposition canvas and cost-benefit analysis. Involve your stakeholders and decision-makers during this process.

Fortunately through controlled selection and business needs, only selected projects are included in a portfolio, these are different from maintenance and OPEX projects usually.

Achieving an optimal project portfolio hinges on strategic balancing. It's not about risk avoidance; it's about managing it proactively. For every high-risk venture, introduce low-risk counterparts, for every long-term gain conterbalance with short-term gains. Cultivate a portfolio that thrives on diversity. Balancing isn't a passive task—it requires continuous, active refinement. Regular reviews prompt thoughtful adjustments, ensuring projects align with evolving organizational goals. A dynamic approach enables you to cut loose projects that fall short and introduce new ones aligned with your objectives. It's about staying agile, adapting to change, and ensuring your portfolio mirrors your strategic intents.

Here's an opportunity to inspect and adapt as an Agile coach would say, it is also a time to review the financial health of each project, and re-order prioritisation where necessary.

There are some easy solutions here and then some harder ones. It’s relatively easy to measure strategic alignment through a mapping of projects to strategic goals and also to monitor sponsor & stakeholder satisfaction (internally anyway). You’ll need to prioritise your stakeholder communications and engagement plan first though. What can be harder is measuring realised value and benefits, particularly when parallel projects are impacting the same areas and KPIs. I would recommend a programme approach to this. Try to group projects together that are focussed on the same strategic goals. Having identified the KPIs impacted by a group of projects, ensure you measure them before and after any changes are make. Track them constantly throughout.

Continuous stakeholder feedback and realization audit assist and refine the portfolio's vision. The portfolio projects are usually investment projects, so their budgets need investment through Capex.

As mentioned this needs to happen at every stage including at the review and refining of your portfolio stage and any other changes in between together with the rationale behind them, transparency will promote trust and a safe environment for all involved and will empower people to speak up especially when it matters to the success of the projects

As projects are identified, these have to be assessed for their impact at the surrounding environment, socially, economically and politically.

The portfolio team and associated portfolio office not only need to facilitate and govern the portfolio, they also need to act as a support for project sponsors who do not know how to build an effective business case. Don’t let important strategic projects be overlooked because of a sponsor who just needs a sounding board and/or some support from you in articulating and modelling their idea for change. Create a safe and collaborative environment for project sponsors, and project leads (who may not have led/managed projects before) to learn new tools, techniques and processes, build more engaging business cases and deliver more successful and beneficial change.

Every organisation needs to foster a culture of learning and adaptability within it. Encourage your teams to share insights and best practices from projects, contributing to ongoing portfolio refinement.

The use of pre-determined portfolio frameworks for these projects will definitely alleviate any inclusion of non-vetted projects into the portfolio, whereby achieving the portfolio goals.

Provide your team with the gift of time, granting them the space needed for creativity to flourish. Utilize AI to handle routine and predictable tasks, liberating valuable time for your team to engage in the realms of design thinking, systems thinking, and "futures" thinking during the initial phases. Foster an environment where these dialogues can unfold by allocating sufficient time. Strive to eliminate bias by assembling a diverse panel of stakeholders who possess vested interests in the values as they align with the strategy.