PMcrunch

In these tight times, we are acutely aware of cutbacks, of scarcity, and of the need to streamline. However, really, these are indicative of management practices that should be occurring all the time. In portfolio management, especially, it is important to have a healthy balance between short term considerations and long term considerations. It is all a balancing act and the equation really only changes slightly during a downturn, such as we are currently experiencing.

In determining the projects that will make up the portfolio, we are often guided by overall stated strategic objectives. These often tend to be "buckets" that are essentially categories of projects supporting a particular organization-wide goal. While this is important for one take, or one pass, over the set of projects being considered for implementation, there is another consideration, that, in my experience, is often overlooked.

There is a capability-focused consideration that should always be incorporated in our criteria on projects. In fact it should actually be one of the biggest considerations. For example, there could be research development going on in a particular area if, at least on a temporary basis, whether for economic reasons or for priorities related to other opportunities, such an area is considered for a cut. We must consider not only the shorter term goals but we need to consider the organizational capabilities. Certain processes, such as research and development on a particular technology, cannot so easily be stopped. Often, once processes are stopped, starting them up again is essentially starting from scratch. Often, they must continue in a drive toward the end result or they will be lost indefinitely.

This needs to be considered oftentimes also with processes. Oftentimes, we have processes that intermingle with projects. Oftentimes, organizational improvement requires a certain flow of projects of a certain type in order to continually advance and improve some aspect of the organization’s operations. If we cut these projects too much, we could lose a core capability of the organization.

Capabilities are very important. We have people and processes in place within our organizations to accomplish certain goals; and if we even temporarily cut back on them, we could lose both the people and the processes, and it can be very difficult to recover that for the future. While, sometimes, the projects representing these capabilities may not fit exactly into the strategic initiative buckets that have been determined for the organization, they nonetheless are of strategic importance and need to be weighed heavily.

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John Reiling, PMP
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