Changing gears


How a portfolio manager handles major change can be the difference between a project's four-star success and abject failure.


Forty years ago, a Motorola employee named Martin Cooper made history. As head of the tech company's car-phone division, he could see that AT&T was cornering the market and that Motorola needed to change its strategy to survive. In an attempt to outpace the competition, Mr. Cooper made a bold move: He told his engineers to stop working.

Rather than chasing the competition in pursuit of the perfect car phone, he envisioned a different product: a portable phone. To capitalize on this innovative idea, Mr. Cooper immediately terminated all car phone-related projects and refocused the team's efforts on the new initiative. It took 90 days to complete the prototype, and on 3 April 1973, Mr. Cooper demonstrated the first truly mobile phone—nicknamed “the brick”—for members of the press.

Mr. Cooper's willingness to embrace change earned him a place in history. To follow in his footsteps, portfolio managers must demonstrate the same willingness to seize unexpected opportunities—and be brave enough to change horses midstream.

It happens all the time: The portfolio is in place, the projects are on track—and then everything goes sideways. Whether they must accommodate shifting resources, respond to economic opportunities or react to a competitor's latest move, portfolio managers often find themselves facing drastic changes that impact both workflow and resources. They're then tasked with realigning the portfolio to support the new strategic goals.


“Portfolio managers must embrace, expect and manage change.”

—Gary Scherling, PMP, Ottawa, Ontario, Canada

“Whether it's changes to the overall strategy or the performance of the portfolio as a whole, portfolio processes must be in place to impact, modify and communicate the current portfolio roadmap,” says Gary Scherling, PMP, a consultant in project, program and portfolio management in Ottawa, Ontario, Canada. “Portfolio managers must embrace, expect and manage change.”

But managing change is easier said than done, given a portfolio's many moving parts.

“In the world of projects, everything affects everything else,” says Stephen Allport, director of the pharmaceutical and biotech business for Human Systems, a project and program management consultancy in London, England.

When a strategic objective has been changed, managers should immediately assess the impact to the portfolio by asking a few key questions, says Jen Skrabak, PMP, director of project management for health-insurance company UnitedHealthcare Group in Calabasas, California, USA:

  • What is the impact on the project or program scope, schedule and value?
  • What financial, human and material resources will be needed or released?
  • How does this shift impact the ROI of the overall portfolio?
  • How does this affect the overall prioritization of projects within the portfolio?
  • How have opportunities and threats to the portfolio changed?

This last question is particularly important, because even small changes in the portfolio can significantly impact an organization's ability to optimize outcomes, says Simon Collyer, PhD, a project management researcher at the University of Queensland Business School, Brisbane, Australia.



“In the world of projects, everything affects everything else.”

—Stephen Allport, Human Systems, London, England

“In high-change environments, there is only a limited period of time your project output will be valuable. Some changes help you fit in the window…while others have the opposite effect.”

—Simon Collyer, PhD, University of Queensland Business School, Brisbane, Australia


“Increasingly in high-change environments, there is only a limited period of time your project output will be valuable,” he says. “Some changes help you fit in the window or achieve the objectives, while others have the opposite effect.”

The Grand Chessboard

Once the big-picture questions have been answered, portfolio managers should begin to outline the tactical changes that will need to be made across the portfolio. In addition to scope, schedule and resource requirements, they should look at how these changes will impact the people involved, says Mr. Allport.


of companies with the best change management practices follow a formal, systematic process for enacting change, compared with just 14 percent of companies with low change effectiveness.

Source: Towers Watson, 2012

“No changes should be agreed to until you assess what will happen to the people affected,” he says.

Team members who feel engaged will often go above and beyond to help make a change successful, while those who feel discounted may be less inclined to cooperate. “People are another resource in project management terms, but if they're treated just like another resource, don't expect them to perform effectively,” Mr. Allport says.



“People are another resource in project management terms, but if they're treated just like another resource, don't expect them to perform effectively.”

—Stephen Allport

Many projects and programs fail because of a lack of focus on the people aspect of change, which involves perceptions, emotions and behaviors, according to Ms. Skrabak.

“Having a formal change management plan can not only help minimize the productivity dip as people transition, but also assist in making the change stick,” she says.

In fact, 65 percent of companies with the best change management practices follow a formal, systematic process for enacting change, compared with just 14 percent of companies with low change effectiveness, according to a 2012 global study by professional services company Towers Watson.

While each organization should develop its own change management process, Mr. Scherling says there are a few elements that can help portfolio managers handle any change that may come their way:

  • A tactical portfolio roadmap that lists the statuses of all approved components, including programs, projects and other operational components
  • A communication plan that links each component to its key stakeholders
  • A risk-management plan that includes an associated contingency budget
  • Portfolio selection criteria

With these pieces in place, portfolio managers can respond quickly when the need for change arises, rather than wasting time trying to gather the information needed to make the right calls.

Line ‘Em Up

It's not always obvious how changes in an organization's strategic direction will impact a portfolio's many components. To ensure everything is aligned with the new goals, Ms. Skrabak suggests that portfolio managers turn to a few important documents that should be reviewed on a regular basis:

  • The portfolio strategic plan, which outlines the vision for the portfolio based on the organization's strategic goals and objectives
  • The portfolio charter, which structures the portfolio and subportfolios
  • A strategic portfolio roadmap, which covers the current and future high-level strategic direction, operational work milestones and interdependencies in a one- to five-year timeline
  • The portfolio management plan, which outlines the organization's approach to managing strategic change, governance, communications, stakeholder engagement, prioritization, optimization, measuring performance and value, and managing risks

Many changes are for the better, but not every change represents an opportunity, says Jen Skrabak, UnitedHealthcare Group, Calabasas, California, USA. Portfolio managers should reject changes that carry a high risk of negatively impacting the portfolio due to lack of strategic alignment, business benefit, stakeholder value, or resource capacity and capability. For example, making an enterprise-wide change in email systems or server providers may seem like it will increase the speed and efficiency of the organization, but if the technology will become outdated within a few years’ time, the resources the investment would require may actually lead to a net loss in productivity.

Ms. Skrabak suggests portfolio managers use the five C's to determine the viability of potential changes on their dockets:

  • Clear: Is there a clear case that shows how the change aligns with the organization's strategy?
  • Concise: Can the business value of the change be articulated in an easy-to-understand manner?
  • Compelling: Is there an urgent reason for the change to be made now rather than later?
  • Credible: Is there an executive sponsor who will champion the change?
  • Creative: Have all possible options been considered?

Once the portfolio is heading down its new path, frequent check-ins with stakeholders can help portfolio managers determine where additional adjustments may be needed. This not only helps solidify buy-in but also can have significant financial implications. According to the Towers Watson study, companies that are highly effective at both communication and change management are 2.5 times more likely to outperform their peers than companies that are not highly effective in either area.

Creating and maintaining a log that clearly states why the change was made, the alternatives considered, the specific actions taken and its potential impact on the portfolio can facilitate this type of communication, says Mr. Allport. “This is not self-protection—though it may have that benefit—but a basis for learning from experience.”

Change is inevitable, and it's a portfolio manager's job to anticipate it, plan for it and manage it—but not to control it, Ms. Skrabak says. On the contrary, success comes from inspiring, leading and enabling the organization's ongoing evolution.

“Effective change management can mean the difference between success and failure for the portfolio,” she says. “It's ultimately the vehicle for executing an organization's entire strategic vision.” PM

Resources to Better Manage Change

PMI's new change management web page brings together in one place tools and information to assist practitioners and their organizations in boosting their success in portfolio, program and project execution. PMI's change management resources have grown significantly over the last decade in response to PMI member input, findings from Pulse of the ProfessionTM and additional research demonstrating the link between good change management practices and project success. This page will be updated frequently as we roll out new content, professional development opportunities and other resources, so please bookmark and check in often for expanding resources to aid you in your endeavor to better manage change.




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