Principle: Portfolio Office

All activities related to portfolio management, such as establishing a portfolio, setting up project and programme management standards, liaison with senior management, providing timely reports etc., need to be implemented and maintained throughout its life. This is carried out through establishing a “portfolio office”. The size of the office and the amount of people needed, will depend on the scale of the organization and its vision. It can also be a physical or a virtual organization with people with dedicated or shared responsibilities.

How a Portfolio Office is Established

A portfolio office is established by the following:

• Right place in the organization structure: Portfolio office is the entity that drives organizational strategy into achievable initiatives. It needs be given the right level of seniority within the organizational structure. The portfolio office must have access to the senior management (at the C-level). The office should also be able to provide transformational leadership to project and programme management teams. The right place for a portfolio office would be at one below the C-level, with a direct reporting line to a C-level leader.
• Leadership for the portfolio office: A portfolio office needs to be led by someone who can easily converse with top people in the organization and also able to direct and guide colleagues. Knowledge, skills and experience should be considered when identifying the leader for the portfolio office (also known as the Portfolio Director). Depending on the scale of the organization, the portfolio and the approach that the organization wishes to take, the staffing needs can be determined. There is no need for any individual to be involved on a full-time basis in the portfolio office. This depends on organizational factors. The portfolio office is just one criterion for success. The other criteria (indicated by the other four principles) play an equally important role.

Best Practices to Establish a Portfolio Office

The following are the best practices in establishing a portfolio office:

• Senior leadership engagement: It is important to remember that organization’s top management are not experts in portfolio management. Therefore, it is the leader of the portfolio office, who needs to engage frequently and constructively with the senior leadership get the portfolio office’s structure in place. The senior management would only have a vague idea about what portfolio management. In many cases, the senior leadership may see portfolio office as the solution to all their problems. Therefore, the leader of the portfolio office also has the critical job of setting expectations.
• Clear mandate: Like any other individual or a team in an organization, the mandate for the portfolio office should be clear. Again, the portfolio office leader has the subject matter expertise to explain to the senior leadership of the organization, on setting the expectations. The mandate should be agreed, and the support mechanisms should be clarified as a first step.
• Performance criteria: The portfolio office must have its own performance criteria in place. It is important to set performance indicators for every part of the organization, including the portfolio office, so that the progress and value can be measured. Performance indicators will depend on the organization’s environment and its overall goals. Therefore, performance indicators may differ from one portfolio office to another.

Written by Inham Hassen

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