Effective Portfolio Management in 6 Phases

Three years ago, Gartner published six recommendations for effective portfolio management. But in recent years, the pressure on portfolio management has intensified. This increase is caused by these developments among others:

  • ESG: Practising business with a contribution to Environmental, Social and Governance objectives (ESG) is on the rise.
  • Human resource shortage: there is enormous pressure on human resource capacity due to the current labor market.
  • Declining funding: governments and non-profits in particular are struggling with declining funding.

In short, more needs to be done with less. What impact does that have on the recommended on six best practices for effective portfolio management as published by Gartner?

1. Increasing number of limitations/dependencies.

Gartner stressed the importance of understanding the work to be done, interdependencies and risks. Availability of money and human capacity is declining. Here, it is not just the goals of the customers or the organization to which the changes contribute; ESG goals must also be involved. This produces strong complexity in planning intended changes.

2. From customer-driven prioritization to purpose-driven prioritization.

In a purely customer value-driven organization, the customer is the focus. In a purpose-driven organization, customer value should not come at the expense of achieving purpose. This requires fine-tuned portfolio management where a balance is guarded between initiatives that ensure the viability of the organization and those that contribute to its purpose.

3. Applying Strategic resource management is essential.

Today’s times call for agile organizations that can respond quickly to changing circumstances. Adaptive portfolio management is therefore as important as ever. This cannot be done without Strategic Resource Management because lack of human capacity is generally the biggest bottleneck. Only by adopting a capacity approach that covers all layers (Strategic, Tactical and Operational) will you keep a grip on the changes that need to be implemented now and in the future.

4. Ongoing value management requires data dashboarding rather than reporting.

The ongoing focus on delivering value from the projects in the portfolio is still relevant. The way value is defined did become broader and more diverse. To effectively manage this on an ongoing basis, it is important to move away from periodic, labor-intensive reports and toward up-to-date interactive dashboards. This places three requirements on the organization of portfolio management:


  1. Unified practices
    in a central strategic portfolio management platform.
  2. A
    integrated use of project and portfolio management
    . No duplicate administrations but linked systems.
  3. All objectives should be accommodated in the porfoliomanagement platform, not just financial. Otherwise, the dashboard provides only part of the necessary steering information.

5. A healthy culture of change within an organization-wide maturity model.

An effective change portfolio takes into account that people struggle with change. Organizational culture can encourage or hinder change. In addition to the three elements Gartner provides for this,

  • Feedback and communication channels involving business leaders, managers and end users
  • Engagement of change champions at multiple levels
  • Executive confirmed roadmap for change

we see in practice a fourth element. This is an approach to portfolio management from a maturity model. We share more about this in our Best practices paper portfolio management in healthcare. For now, it is important to emphasize that the full breadth of the organization must be at some level of maturity. When a critical component lags behind, it hinders the agility of the organization as a whole.

6. Ongoing value realization requires quantified goals.

The actual completion of projects should lead to the ongoing realization of value. Thus, progress must be visible in achieving the various strategic objectives. Gartner already indicated that in the absence of that realization, it is necessary to evaluate where the original estimation went wrong. But measuring value realization and evaluating the achievement of objectives is possible only when the original objectives are made quantifiable in a transparent way. Only by expressing the impact – even when it is social or governance related – in measurable results can targeted steering and evaluation take place.

The model then looks as follows:

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