In this on-demand culture, work related to strategy, long-term benefits, and building strategic capabilities tends to take a back seat.
It’s not that we don’t want to be more proactive or don’t have big ideas. There are just other immediate concerns. Like getting that current project out the door, addressing production defects, or polishing that update for the boss’s boss.
Deadlines this week prevent us from working on what will get us where we want to be six months, a year, or ten years from now. It’s easier to push strategic work off because the future feels so far away. I completely get it. But I’ve also seen the negative effects of delaying strategic capabilities.
There was an organization with an important mission that had great ideas of where they’d like to end up. They created detailed descriptions of what the future architecture would look like. However, realizing the vision required working with multiple groups to coordinate roadmaps and build the capabilities. The kick-off was slated to start “in two years.” And that target kept shifting. It was always two years from the current date.
Fast forward a few years. The vision wasn’t translated into reality. Needless to say, some of the major challenges they were facing as a result of that missing architecture still exist. And it cost the organization millions of dollars to implement poor workarounds that they’ll need to rework later.
How long will your organization wait to get its portfolio management strategy in order? How much does it cost to delay the change by as short as six months? Here are a few factors to consider.
The cost of good people leaving because they were uninspired, underappreciated, or burnt out
Regardless of where you are, you likely already have some star players on staff. They’re the people who are always willing to put in the work, to improve themselves and coach others. They can see both where the company could go and the smaller actions required to get there. If you don’t have a collaborative portfolio process and the status quo continues, you’re likely to lose your best employees within six months. They’ll stick with it for a few months but will secretly be ramping up their interviewing frequency.
If you lose just one high performer in the next six months, it could cost your organization 1.5-2X their annual salary to replace them. However, in my experience, two or three people tend to leave at once if they’re moving on because of the organization’s environment. And once a few high performers leave, others are more likely to follow.
The cost of time and resources spent on unproductive meetings, confusion, duplicated efforts, or production issues in your enterprise
Experimentation and some failures are part of the business game. However, a lot of high-cost failures and other sources of waste are avoidable.
Consider this scenario. Two organizations have the same budget for six months. One is constantly investing, learning, and adjusting, ensuring autonomy and alignment with lean portfolio management. The other doesn’t have a portfolio management system so employees spend extra time in unproductive meetings, duplicating effort, or working on a piece of the final solution that doesn’t end up integrating well with the whole.
On paper, they spent the same amount of money. However, if the time spent didn’t contribute to enterprise knowledge, employee growth, improvements for customers, or revenues, the organization left money on the table.
While the cost of projects can become more predictable with certain practices, as many as a third of IT projects still “fail” because the technical solution works but doesn’t achieve the business or customer goal. In some cases, the technical project was delivered on time and within budget. But the adverse impact to business processes or the customer experience ended up hurting the company, causing PR issues and costing time and money to resolve the damage. Launching a portfolio six months earlier can reduce your risks so that money spent on changes contributes to positive value.
The problems you could solve and impact you could create earlier by better leveraging your existing resources
Rich companies and venture-backed startups get a lot of press and reach, but they’re not the only ones making a difference. Organizations with tight budgets can benefit more from portfolio management because their time and finances are so limited. There isn’t a lot of room to waste money. Being conscious about investments can help ensure cash flow or early impact to be able to attract more attention. Ways to accomplish that are by lowering your monthly burn rate, improving your outcomes, or doing both. Portfolio management helps to illuminate current investments, plus identify and take advantage of opportunities at scale.
Alternatively, if you’re less concerned about getting a financial return and more about maximizing the non-monetary impact of your investment, starting portfolio management as soon as possible will help make sure that you’re leveraging the resources you have today while preparing for the future. You started or joined the organization to help solve a problem. Why not solve it for someone six months sooner?
The opportunities, partnerships, and promotions that could come your way when you build a reputation as a leader who can tackle complex transformations with ease
Open up any news app and you’ll see stories about systemic problems. Case studies have proven that we need different thinking to solve today’s problems than we used to create them. Many people were trained in reductionist thinking and discipline siloes, so becoming known as someone with a multidisciplinary approach and a track record of success in difficult environments can make you stand out. Creating sustainable systems that live on after you’ve moved on is even more impressive. Starting on that path today vs. six months from now means building experience that can attract that great new project, promotion, or partnership. That means a higher paycheck or a more fulfilling work life sooner.
Waiting six months could cost tens of thousands (on the low end). Delaying by two years could cost millions. What are you waiting for?
If you’re ready to get started and would like custom guidance for your organization, creating a transition plan is part of what we offer to clients building out their portfolio. Check out our services and book a consult here if you’re interested in learning more.
What reasons for delaying do you hear in your organization?