Three Must-Have Skills for Portfolio Managers
Is portfolio management the right career move for you? Here are the top skills you need — and how to develop them — to take it to the next level.
4 February 2013
Managing at the project and program level is no longer enough for successful organizations. Increasingly, a higher-level perspective is needed to ensure those projects drive business goals.
Portfolio management allows an organization to take a holistic view of a group (or groups) of its projects to improve return on investment (ROI) and strategic alignment. According to PMI’s 2012 Pulse of the Profession™, organizations that described themselves as highly effective in portfolio management increased the average number of projects meeting or exceeding their forecasted ROI by nearly 30 percent compared to those that described themselves as minimally effective.
“Companies are looking at portfolio management,” says Doc Dochtermann, PMI-SP, PMP, portfolio manager, Xerox State Healthcare LLC, Sacramento, California, USA. “There is going to be a lot of growth in this area over the next five years.”
Portfolio management is gathering steam — but does that necessarily mean that you should take the next step? Here are three indispensable skills every project or program professional needs to see the bigger picture.
A Business Mindset Keen on Strategic Alignment
One of the top priorities for portfolio managers is aligning the projects in the portfolio with organizational goals. But organizations rarely have their entire strategy written down in one place.
That’s where business acumen helps the portfolio manager to bring the organization’s key players together, arrive at a strategic direction and give priority to the highest-value projects.
So how do you develop business acumen sharp enough for the executive suite? Speak with the senior managers who can pinpoint what’s important at the highest levels. “There is typically one senior manager, such as a CIO, CTO or CPO, who understands the organization’s long-term strategic intent, goals, metrics and strategies,” says Mr. Dochtermann.
“Examine the operations across the organization,” adds Paul Osman, PMP, principal, Deloitte Consulting, Melbourne, Australia. “Get under the covers of the business from a finance, policy and process standpoints. Understand the marketplace the business operates in.” He also suggests business training, including PMI’s online courses, or more formal education, such as a master of business administration (MBA) program.
Financial Management Know-How
Portfolio managers must be able to manage multiple project budgets at once. As such, strong financial management is essential to successfully forecast and accrue each project in parallel, says Christine Downer, PMP, technical portfolio manager at American Express in Toronto, Canada. Portfolio managers must possess the capacity to help executives prioritize the spend based on organizational strategy or ongoing goals, says Ms. Downer.
Pete Nathan, PMP, senior manager, project portfolio manager, project management office, Gulfstream Aerospace Corporation, Savannah, Georgia, USA, adds that portfolio managers must excel at measuring, monitoring and reporting the portfolio’s value to the organization.
“To gain insight into financial management know-how, approach projects by understanding approved, planned and actual project costs,” says Mr. Dochtermann. “Project management professionals are more focused on scope and schedule than with finance.”
Flawless Risk Management
In PricewaterhouseCoopers’ 2012 Risk in Review, global executives put external factors — including “economic turmoil, political upheavals and ripple effects from natural disasters” — atop their list of risks to a portfolio. Keeping them from sinking the entire project suite must be top-of-mind for portfolio managers.
“Failure to manage portfolio risks could lead to a negative impact on individual projects through not achieving and delivering the business strategy,” says Mr. Osman.
Mr. Nathan says the early identification — and, ideally, mitigation — of portfolio-level issues and risks leads to success, just as much as business and financial knowledge.
To show your risk management skills are up to par, Mr. Dochtermann suggests earning a PMI-RMP® certification and bouncing ideas off like-minded professionals in PMI’s Project Risk Management Community of Practice.