April 12 Edition

Strategic Portfolio Management

What is Strategic Portfolio Management?

The Project Management Institute contrasts it to Tactical Portfolio Management and states that it is “conducted at a much higher level within the organization, where those involved are deciding if the projects and programs selected for execution align with the organization's strategies (is the organization doing the right projects given its strategy).?“ I can get behind a definition like this but would modify it from just “projects” (the world of PMI) to business objects (including business models, products, objectives, and so on).

John Spaeth at Gartner defines it this way: “Strategic portfolio management optimizes business outcomes while adapting to disruptions” and further states “organizations struggle to attain high effectiveness.”

That is a very good definition. And the statement of fact which follows regarding the struggle to attain high effectiveness is certainly real.

We see this in innovation. As Sopheon has pointed out in its recent series about InnovationOps, $2.4T (yes trillion) dollars are spent globally on R&D. 35-50% of that is spent on failures and 90% of executive leaders are unhappy with the results.

Others in Gartner then take John’s definition and make it narrow. They introduce a SPM “Market” as “a direct response to increasing recognition among enterprises that SPM — as a set of business capabilities, processes and supporting portfolio management technology — is critical for the successful progression and acceleration of digital initiatives amid an increasingly dynamic and uncertain business environment.”

Huh? How did they get from such a great definition from John Spaeth to the niche aspect of digital initiatives? ?

Worse yet, this definition in Gartner does not include strategic elements such as revenue, market share and other corporate objects. It is focused on the tactical IT aspects of digital such as methodologies such as SAFe (whose value is being publicly questioned), management of IT assets, and integration to Enterprise Architecture tools.

Strategic Portfolio Management is more than digital.

Digital might be one corporate strategy, depending on the company. But so are acquisition, diversification, cost leadership, sustainability, market leadership, market leadership, market disruption, profitability, partnership, and restructuring.

And so is innovation, including investing in research and development to create new products (digital or otherwise) or services and gain a competitive advantage.

These are real strategies that should be managed as strategic portfolios. Each has significant investments behind it.

By taking a niche view, some in Gartner are doing a disservice to the term strategic portfolio management. It would be better to stick with the larger definition from John Spaeth. And when thinking about innovation in particular, Gartner should expand its definition to include more than just digital products. Compared to physical products, which require supply chains, manufacturing, and distribution, or hybrid products, which need to blend both physical and digital aspects, digital products are easier (but not necessarily easy) to create, bring to market, and modify if necessary.

Gartner should rename their category to Strategic Digital Portfolio Management, or Strategic IT Portfolio Management to more accurately reflect its intent.

How to Make a Change with Good Product Management

"You cannot have a process without people and cannot have a product without people." - Ulrike Laubner-Kelleher

Don't you love that quote?

Looking to stay ahead in the product management game? Look no further than the latest episode of Innovation Talks, featuring product management consultant and published author @Ulrike Laubner-Kelleher. With over 20 years of experience advising companies of all sizes, Ulrike has helped her clients speed up time-to-market, make market-based decisions, and improve profitability by 30% or more with her proprietary Red String Method.

In this episode, Ulrike shares her journey to becoming a product manager before the profession even existed, the main challenges product managers face, and how the Red String Method connects products, people, and processes to drive success. Plus, she offers valuable insights on how business leaders can better support their product managers and make the product development process more sustainable.

Don't miss out on this must-listen episode. Tune in now to Innovation Talks with Ulrike Laubner-Kelleher!?

Check out the show notes for some extra good content and links!

What we spoke about:

●?????How Ulrike became a product manager before the profession even existed

●?????The main challenges in product management

●?????How Ulrike’s Red String Method connects products, people, and process

●?????How the Red String Method can help make your company more profitable

●?????How Ulrike streamlines the product management methodology

●?????The role product managers play in a company’s success

●?????The main differences between software and physical product management

●?????How product management can be more sustainable

You can find the episode wherever you get your podcasts.

Apple Podcasts | TuneIn | GooglePlay | Stitcher | Spotify | iHeart

It is also hosted on the Sopheon website.

#InnovationTalks #ProductManagement #Leadership #Culture #portfoliomanagement #strategyexecution