Comprehensive portfolio management involves the selection, prioritization, funding and delivery of a specific choice of priority projects or programmes at a business or functional level, aligned with an organisation’s strategic objectives and capacity to deliver. This structured approach to managing a set of programmes/projects provides visibility and control of the work required to implement strategic initiatives, while ensuring that business as usual is maintained.

This requires a structured, governance framework to support project intake processes that consider what’s possible and practical in the context of resource availability and implementation capability, whilst also maintaining visibility of the portfolio’s progress against strategic targets and capturing emergent benefits. This is achieved via six portfolio design practices, and five portfolio delivery practices (see diagram below).

Comprehensive Portfolio Management: How to Balance and Diversify

A common analogy is that of asset allocation: for example, an investor might choose to invest 50% in stocks and 50% in bonds. Over time, if the ratio becomes closer to 55% in stocks, the investor or their adviser would rebalance the portfolio by selling some of the stocks and buying more bonds, in order to maintain their desired risk/return profile.

Achieving the right balance between headwinds and tailwinds, and locating the most promising playing fields for value creation can be challenging — especially in a company that has enjoyed easy growth during a recently favorable macroenvironment. To address this, research suggests that companies need to develop six core capabilities for effective portfolio management.