Will the real portfolio manager please stand up?

The title of 'portfolio manager' is one of the most watered down job titles these days. Anyone with experience in project management or a PMO role seems to be eligible for a portfolio management position. This is partly because portfolio management as a field is still developing and is closely intertwined with project and program management. But there is a fundamental difference that is often overlooked: the time horizon and the moment at which a change signal is picked up.

Portfolio management focuses on the path from the first signal of change to the moment it is ready for implementation in projects or programs. However, the actual realization is not the responsibility of the portfolio manager – that is up to clients and steering groups. Only after completion of a change is it the task of portfolio management to monitor the intended benefits and report on them.

What portfolio management is really about is achieving strategic, organizational or political goals with a long-term vision. A portfolio manager looks beyond the short term; the horizon is usually more than five quarters ahead. This is the opposite of an approach where changes are implemented in three-month iterations – that is an execution methodology, not portfolio management.

There is also often confusion about what portfolio management is not. It is not about reviewing project plans, assessing proposals, or playing “über-steering group” with a portfolio board. Nor is it about keeping lists and reports on ongoing projects – that is what project managers and steering groups are for. Portfolio management only intervenes when there are deviations that have an impact at the portfolio level.

Unfortunately, in many organizations we see that portfolio management is reduced to drawing up top 10 lists of urgent change signals and reporting on the status of ongoing projects. But if portfolio management really wants to be strategically steering, it must focus on the future. It is about mapping both internal and external influences on the portfolio, not only now, but also in the (distant) future.

A real portfolio manager not only has an overview, but also the power to persevere. Too often, portfolio managers act as advisors who mainly draw up reports and make recommendations, instead of actually managing the portfolio.

Within public organisations we see all sorts of manifestations of portfolio management, from strategic portfolio manager to more exotic variants. However, almost every organisation struggles with the same two challenges: limited capacity and setting priorities. Often this is responded to in a process-based manner: a new methodology is introduced, but if this does not work, the blame is placed on the organisation that 'does not understand' the methodology properly. Instead of getting the methodology to work, one should tackle the underlying cause of stalled portfolios.

The core of the problem often lies in the accumulation of urgent initiatives that are all considered priorities. To solve this effectively, have portfolio managers develop scenarios for the long term, forcing directors to make really difficult choices.

My ideal? A public sector in which portfolio management is positioned much more strategically and is less concerned with managing individual projects and programs. There are already some promising examples, but now it is time to let them flourish further.