Principle: Senior Management Commitment
Senior management refers to top level leadership such as C-level executives or those in similar positions. In portfolio management, the aim is to systematically guide the organization to reach its strategic goals. The main beneficiaries are senior management. Therefore, it is only natural that their full commitment should be provided for portfolio management.
How is Senior Management Commitment Achieved
Senior management support is essential and portfolio management cannot exist without it. Senior management should provide support by:
- Active participation and consent to the governance structure: The senior management (as part of the portfolio direction group), has the responsibility of joining discussions, signing off on the prioritization criteria, signing off on resources and funds, agreeing on lines of responsibility, placing the portfolio management team at the right place in the organization structure and agreeing on responsibilities of the portfolio management team and everyone else who closely work with them. This is essential to ensure portfolio governance is in place and it is aligned with corporate governance.
- Contributing their expertise: Senior leaders possess significant expertise, especially in the organizational context. When implementing portfolio management as a practice, this expertise should be tapped as much as possible. This will be helpful for it to succeed.
- Championing and communicating to the rest of the organization: Portfolio management drives the organization to achieve its strategic goals. Naturally, everyone in the entity is a stakeholder. Value achieved through the portfolio trickle downs to all. Communicating the value gained through managing the portfolio and explaining the rationale behind decisions, is a core part of senior leadership’s responsibilities.
- Ensuring compliance: An important responsibility for the senior leadership involves warranting everyone in the organization (including themselves) are compliant with the portfolio governance mechanism. Part of this is actively making sure their pet projects are not subconsciously prioritized. A larger part is also assessing whether teams that are not directly involved in the portfolio, continue to support it.
Best Practices for Achieving Senior Management Commitment
The following are some of the best practices for achieving senior management commitment:
- A vision for the portfolio: An organization must have a vision and a mission. Similarly, the portfolio itself must also have a vision. This will be the guidance for the senior leadership, the portfolio management team and other key stakeholders to know where the portfolio should head.
- A champion from senior management: One key leader among the senior management should act as the champion. This should be someone from the C-level or similar, who has responsibility at a strategic level. The champion’s job is to support and promote the portfolio management practice. In tough times, the champion must provide support for the portfolio management team to make difficult decisions. The champion should also encourage the engagement of other senior leaders to support portfolio management.
- Engagement by senior leadership: The champion should encourage and act as a motivator for other senior leaders to engage. That does not mean other leaders should give the responsibility of engagement to the champion alone. The principle of senior management commitment requires every senior leader to engage with portfolio management on their own initiative.
- Roles, responsibilities, rewards, and recognition: All roles and responsibilities related to portfolio management, should be outline for everyone who is involved. This includes senior management’s responsibilities as well. Every organization has a way of rewarding and recognizing its people and it is also important that these responsibilities are included in the reward and recognition strategy.
Written by Inham Hassen
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