How to define your portfolio scope

How to define your portfolio scope

You’re ready to solve some of your current issues by implementing a portfolio management strategy. So where do you start?

The first step is to clarify the scope of your portfolio. What it will include, and what it won’t. What information you’ll track, the types of questions you’ll be asking, and decisions you want to make as a portfolio team.

Organizations can easily get tripped up in the shift towards portfolio if team members are not in sync about what will be included. Different mental models can be a barrier to ironing out all of the other details and ultimately changing group habits. This scope decision impacts all of your other choices, including who will be involved, the processes you’ll follow, and how you’ll document insights.


Thinking about what to include in your portfolio

A portfolio is a collection of items that you manage as a group in the pursuit of accomplishing a shared goal. You invest your limited resources in those items with the hope of getting something greater back. Whether that’s more money or a different measure of success, like better healthcare. So when deciding on the scope of your portfolio, think about the types of “items” your organization invests time, money, and resources in.

For example, financial portfolios are a collection of financial assets. Startup investors track the returns of the startups in their portfolio. Some of the most successful companies look at their work as a collection of experiments to run. You could have a portfolio of technology assets, products, projects, businesses, or non-profits. Basically any collection of items that compete for the same resources. And that ideally work together to help you achieve a broader goal.

In most enterprises, regardless of size, I recommend including products, projects, and business models in your portfolio. Given the dependencies between them all, it will give you a better picture of everything going on in your organization. So you can better spot issues and opportunities.


The product representation is the what. It’s the product or service that you provide and all of the decisions that go along with it. This is the realm of product or service management. It’s the perspective that’s typically discussed in agile circles. Companies managing a product portfolio focus on product lines. They make sure that the products within them address customer needs and work together given the architecture, manufacturing, and marketing strategies.


Companies managing a project portfolio look at all of the projects that are in flight or upcoming. They pay more attention to project-based metrics like delivery time and scope. This is the realm of project management. A project portfolio helps you keep track of what’s changing, when, and by whom. You could also fold in experiments as a type of project, in order to track the time you’ll spend gathering information. There’s some overlap between product and project management since new products require projects to launch and update them. But in general, the primary focus is different (ex. what we’re delivering vs. when we’ll deliver).

Business models

A business model focused portfolio looks more broadly at the different “business models” the organization could invest resources in. The business model perspective goes beyond the product or the delivery mechanism. It looks at the broader business “play” as a whole. It includes customers, channels, value propositions, and financial models. Plus the backend details of how the enterprise will deliver value to customers. This is a broader, more systems-oriented approach compared to a product-centric view. Books like “Lean Enterprise” and “Business Model Generation” provide some good advice on managing a portfolio of business models.

A blended approach

A business model approach will be a better choice if your organization current serves or plans to serve the same customers many different ways. It also is a natural choice for more established enterprises who have built up a number of products and services over time and need a way to improve and leverage what they’ve already created. A product approach makes sense if you have some core technology that you want to iterate on and sell to different markets. A project approach is helpful in all cases where you’re actively building or changing a product or company. Most organizations beyond the startup level benefit from all three perspectives. Since we’re trying to identify value and mitigate risk in our portfolio, a holistic approach is preferable in order to reduce blind spots.


Which level of abstraction to pick

Besides thinking about the type of work you want to track, you also want to think about the organizational scope. Will you just be looking at one department? Or the entire organization?

Department-level portfolio

You could technically apply portfolio management techniques at any level of your organization to optimize your work. You could track marketing projects and assets, software systems, development projects, or sales initiatives. Visibility into what you’re spending time and resources on is valuable. However, the problem in organizations is often not that individual departments or managers aren’t aware of what they’re investing in. With a limited number of people to answer to, it’s easier for a manager to keep tabs on everything going on within their area.

If your organization is very fragmented, with no need to share resources, information, or context across team boundaries, localized portfolio management could be enough. Most organizations don’t fit that description.

Enterprise portfolio

The more challenging area (that also presents a greater opportunity) is to build a portfolio that crosses departments and disciplines. For companies with organizational silos (or even a flat management structure), coordination through hallway conversations can only get you so far. People can easily be making decisions based on incomplete or out-of-date information.

A structured approach can help the entire organization see what’s in progress, make decisions about what’s next, and better allocate resources. It can also help provide context about the mission so decisions at a local level align with the goals of the larger portfolio.

If you apply portfolio techniques at a department level, you’d have a holistic picture of everything going on within that department, from a process, capabilities, and project perspective. In most organizational structures those business units roll up into an enterprise level. At the enterprise level, you’d be looking at end-to-end value streams, products & services, and enterprise projects.

I recommend building out a portfolio at the enterprise level as quickly as possible, especially if your business units are aligned to capabilities like IT or marketing instead of cross-cutting value streams that serve the same customers. An overarching portfolio will help reduce silos that hurt many organizations and hinder the identification and execution of opportunities.


More questions to ask

If you’re not sure which would be a good fit for you, try to answer these questions:

What is your business model? (or set of business models?) How much overlap is there?

The greater the overlap of customers, tools, resources, and processes, the greater the need for a centralized portfolio.

Which information is important for everyone to know?

Context, goals, dependencies and milestone dates tend to be important to everyone. Expertise-specific information may not need to be included in a portfolio view.

Are all of the teams clear on how their work connects to strategic intent and values?

If not, then a portfolio at the next highest level is needed. That way they can make decisions that address the intent of the original goal, instead of picking whichever direction makes sense to them, but not might be a good fit for the organization as a whole.

What kinds of barriers or conflicts are you facing? Where is work slowing down or tension building between teams? Who sounds frustrated or resigned?

Ex. “We could do better if I could just convince [insert name of peer they don’t have “authority” over] to make different decisions.” If so, it might be time to shift the approach to align everyone one level up.

Are you achieving your goals? Which ones?

Portfolio management strategies exist to help you effectively extract value out of limited resources. Have you hit your stride at the micro level? If not, is it due to internal issues (in which case build a portfolio at the micro level) or external dependencies? (build a portfolio at the next level up). Keep going until you hit the highest level your organization can control. For example, if your organizational goal is to be a technology leader in your industry but you’re behind, then you might want to reevaluate the amount of technology and marketing projects you’re investing in.

What questions are customers or stakeholders asking you?

Portfolio management tools can help not only make better decisions but communicate what’s going on to interested parties. Do they want to see when their request will be implemented? Are they interested in seeing how long it takes to complete a project? That can give you an indication of some of the elements you might want to include in your portfolio view.

Does delivering new value require investment in R&D or a technical runway?

In this case, you’ll benefit from managing everything as a whole so that you can be sure to invest enough resources in building assets that can support other groups.

What or whom can you influence in your role?

Even if your ultimate goal is to have an enterprise-wide portfolio, start with what you can control and the relationships you have. Sometimes it takes a smaller prototype for other people to realize the value that portfolio techniques can provide. You can always work on scaling after you create a proof of concept and people start seeing the change it creates.


Clarifying the scope of your portfolio at the beginning can help speed up all of the decisions to come. And momentum is helpful for any large change.

Does your organization have a portfolio? What does it include? How did you decide on the scope?


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