What Is Portfolio Management?

I recently reviewed a manuscript for my publisher, who wanted an opinion on its value. It was an interesting experience, because it made me realize that a lot of what we assume everyone agrees on about project management is in fact floating in that No-Man's Land called the "grey area."

This is especially true of the more sophisticated functions that play out at the level of the PMO, I believe, because those are not covered in detail by the PMI standard in the way that the mechanics of a single project are. Portfolio management, PMO management, multiple project management, the ins and outs of programs ... all these, while of course sharing a basis in project management, develop and are defined and managed very differently from company to company. (The newer standards for programs and portfolios will, in time, even out some of these differences, I'm sure, but for now there still seems to be a broad interpretation.)

For example, I was surprised to see a fellow PM writer list "operational work" as an element of the portfolio. Asking my colleagues about this, I found that they agreed this was almost never true except in the very smallest companies. If you are going to list the work of operations in your project portfolio, you might as well call it "the company" instead of the portfolio. And operational work, unlike projects, can rarely be juggled, stopped, or re-prioritized. It's project work that brings the breakthroughs ... and projects where the agility resides, allowing companies to respond to changing conditions. Meanwhile, someone needs to keep answering the phones, shipping the orders, and sweeping the floors.

Then too, I realized my definition of a "portfolio manager" was quite different from my fellow author's when he opined that portfolio managers "manage multiple projects." In our definition (based on substantial research into strategic PMO job roles) the portfolio manager resides above the management of projects - singly or in groups. In my book (literally), the portfolio is like a cookbook, its manager a cookbook editor. Meanwhile, off in the kitchens, the chefs (project managers) are turning out the test recipes (projects).

Mmmm. That reminds me: I have some Christmas cookies to bake. Have a wonderful holiday, and don't forget: when communicating about projects, always spell out your assumptions, and define your terms. Even fellow experts may have a notion quite at odds with your own.