Effective Portfolio Governance means clarity about what decisions are made, when, and by whom.
Successful portfolio management organizations use a “2 heads” approach to separate decisions about content from the work of managing delivery.
Management of Portfolios recommends two governance groups:
- The Portfolio Direction Group (or Investment Committee) which makes decisions about the definition and composition of the portfolio.
- The Portfolio Progress Group (or Change Delivery Committee) which focusses on the delivery of the portfolio.
Splitting responsibilities gives each group a clear focus. Investment decision-making is separated from the delivery process.
Two Portfolio Governance groups
The Portfolio Direction group usually comprises C-level management. They decide which change initiatives to include in the portfolio, based on the accepted prioritization criteria. They’re responsible for the scope and proper balance of the portfolio. Any changes to the portfolio content and re-prioritization must be agreed by this group.
The Portfolio Progress Group includes senior portfolio management staff, plus colleagues from business as usual areas. Their focus is the successful delivery of the portfolio. Their responsibility is to monitor and control the progress of change initiatives, handle issues that affect delivery and keep the focus on benefits realization.
A Director of Change links the 2 groups. Both are supported by a Portfolio Office which has a decision enabling / decision support role, consistent with the P3O standard.
So, what happens if we don’t separate between the decision-making and the delivery? I would suggest that these distinctive roles will become blurred. This makes achievement of the delivery of strategic objectives more problematic. Just think about what happens at project level when this takes place. So, it is even more critical at portfolio level that we keep these two roles separate.
No matter what level we are operating at, keeping the decision-making separate from delivery makes good sense.
So, does your portfolio governance have two heads? One to make decisions and the other to ensure effective delivery?