CXOs' portfolio prioritization conundrum [Part 2 of 2]


Following up from the Part 1 of this post - the apples could have rotten if we delayed the choice further.

CXOs' 'Portfolio Prioritization' conundrum has a potential game-changing solution.

Even in this oscillating economy - the businesses still crave certainty and try to build complex return on investment focused portfolio management.

Imagine with me:
We are asked to pick 10 out of a box of 50 fresh apples. With our experience - we can relatively compare and make a decision. What if we ate two and kept the rest at home for a month? Would they stay useful?

Now consider a choice of 10 programmes out of a list of 50 within a portfolio. We make the best guesses on  their value, duration and cost according to the given forecast (in volatile conditions).

There is a higher probability that the choice we make at start of the year could be completely incorrect with the global changes by end of first quarter. Do we continue with the chosen programmes or do we reconsider, re-prioritize by going back to the evaluation process?


Consider this:
Two programmes are running in parallel.
One of our chosen six month programmes (Programme A) is expected to bring £7M revenue.
Another similar six month programme (Programme B) is expected to have an ROI of £5M.

At the quarterly portfolio review - it is evident that Programme A is on budget and is running on-time based on the agreed and demonstrable milestones. Programme B on the other hand is struggling to meet its targets. It is behind schedule and has missed a milestone already. From face value - it is evident that Programme B is going to slip its expected end date.





With the global economic changes - we have to make a choice between the two.
Which programme would you stop?

With a shallow understanding of the portfolio - we can fall into a trap.
In this scenario - the market conditions govern that Programme A is not valuable anymore (for the rest of the fiscal year) and the cost of delaying Programme B is much higher comparatively.

In line with the choice of apples or programmes. A near perfect selection does not guarantee that the chosen items will not rot over time. 


One of the best strategies is to re-assess the programme value iteratively and incrementally.

Strong 'Agile & Lean' methodology implementation, a culture of responsibility and autonomation (continuous integration/ delivery) provides CXOs with adequate flexibility with this wicked portfolio prioritization challenge.




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Thank you very much for the insights and suggestions.

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