10 signs it's time to invest in portfolio management

10 signs it's time to invest in portfolio management

Mid-way through January is the peak honeymoon phase of goal-setting in our culture. Hopefully, you’re still running strong but many people fizzle out. Especially when changes are more complex and you’re not seeing results right away.

The same excitement -> burnout cycle happens in business. Goals and targets are motivating, but without some kind of glue connecting the vision to daily execution, it’s easy to get overwhelmed or off track.

For businesses of any size, portfolio management is a valuable tool for moving past obstacles and building momentum. Your portfolio management process determines how you allocate resources in the short term to maximize the value created over time, taking uncertainty and risks into account.

Here are 10 signs that it’s time to invest in a portfolio process:


1. You don’t have a full picture of everything that you’re currently investing in or need to invest in

Without visibility into how you’re investing your resources, it will be harder to make informed decisions about how to adjust. For example, do you have some room to take on a new project? Or do you need to make some tough decisions?


2. Your day-to-day actions and dreams of the future aren’t connected

Organizations tend to be stronger at either execution or strategy. Maybe you’re cranking out items from a to-do list but haven’t mapped them to more strategic goals. Or, you might have a strategic plan but need to break it down further before teams and individuals can take action. In either case, you’re not making as much progress towards your goals as you could.


3. You have way more ideas than resources

There are a lot of projects you could work on, problems you could solve, and opportunities to take advantage of. But with limited resources, you need to determine the right mix of projects that will help you make meaningful progress. You especially need a way to identify what you will not work on in the short-term.


4. You need to align multiple groups around the same mission

It would be a lot easier if your teams could be completely autonomous. However, if your customer experiences involve multiple business lines and technical teams, all with their own processes and priorities, you also need alignment. Each group’s portfolio of work should be allocated in a way that contributes to the overall portfolio goals.


5. You don’t have a standard way to evaluate the potential return on investment of items, so ideas from the loudest, highest paid, or most persuasive people tend to win

Without some kind of consistent criteria to guide decision making, the process of choosing what to work on can become too centralized, a painful search for consensus, or just random. To fairly judge whether an item is worthy of investment, you need a repeatable process.


6. You know that there’s higher value work to be doing but you’re not sure how to identify it and make sure it gets the attention it deserves

Sometimes the work in the backlog doesn’t reflect the problems and opportunities that really need to be addressed. If your attention centers around execution to the point where there’s no time for discovery, then you’ll probably end up focusing on surface problems and quick wins. A strong portfolio process also involves scanning the landscape for potential investments you haven’t considered yet.


7. All investments are expensive

You haven’t carved out a way to test out new ideas without going all in. Because of that, pushing new ideas through the process can be time consuming and expensive. You’ll want a portfolio process with rapid experimentation built in.


8. Your investments aren’t building on each other

You’re making decisions about what to invest in now, but as time goes by costs aren’t going down or value isn’t increasing. A portfolio management team looking for investments that will return future value could help. Sometimes a short-term investment will compound in the long run, such as infrastructure, assets, or education.


9. Priorities are constantly changing

There’s constant churn and shifting direction, causing a lot of rework and frustration. That’s a sign that something’s missing, such as portfolio goals, a valuation framework, communication channels, or a validation process. A portfolio management strategy can help make sure all of the pieces are covered so your organization becomes more agile and less chaotic.


10. You’ve lost sight of the why

It can be easy to focus on flow and cost estimation, especially if you’re trying to deliver as quickly as possible. However, that mindset can be at the expense of thinking about investment choices. Will paying this cost now give me value in the future? Portfolio management can help shift the conversation back to an investment mindset, which considers both cost and value over the short and long term.


Any of this sound familiar? If your organization is dealing with any (or all) of these problems, know that you’re not alone. Many businesses struggle with these issues but are not aware that portfolio management can solve all of them at once.

If you’re interested in portfolio management support for your organization, go here to learn more about working with Recharted Territory.

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