Refining project portfolio success and its antecedents

a conceptual model for realizing value in multi-project environments

Technische Universität Berlin, Chair for Technology and Innovation Management, Germany


While our understanding of project success has evolved tremendously over the last two decades and corresponding management activities have been introduced, on the project portfolio level these types of developments are still quite limited. In this conceptual paper, based on an analysis of the evolution of project success, a definition for project portfolio success is derived embracing three dimensions: the strategic aspect, the exploitation aspect, and the stakeholder aspect. Additionally, the impact of each aspect regarding its contribution to firm success is analyzed and explained. Following this refined project portfolio success definition, corresponding management activities are proposed comprising a) strategic control, b) stakeholder involvement, and c) governance for project portfolio exploitation.

In this paper the classical understanding of project portfolio success and corresponding management activities, which mainly focus on project evaluation and selection are scrutinized. Based on this analysis and the proposed antecedents, new avenues for the creation of value through project portfolio management are shown and summarized in a conceptual framework. This work contributes to research by linking project portfolio management to strategic and stakeholder management theories and by including insights from benefits realization management. Project portfolio managers can apply the proposed framework in order to review, expand and benchmark their current practice.

Keywords: project portfolio management; benefits realization management; project portfolio success; strategic project management

Extended Abstract

Value creation is the ultimate matter of any firm’s endeavor and much of the value firms are realizing is generated by projects (Turner, 2009). Hence, for many companies value realization within a project portfolio environment where multiple projects have to be performed simultaneously is of pivotal interest. According to a widely used definition of Cooper, Edgett, and Kleinschmidt (2002), project portfolio management is based on three elements: maximizing the portfolio’s value, linking the portfolio to the firm’s strategy, and balancing the portfolio. It is about “doing the right projects” and by that contrast with single project management which concerns “doing projects right.” Thus, project portfolio management concentrates on increasing the value by project selection while project management is about delivering this value.

Prior research (e.g. Martinsuo & Lehtonen, 2007; Meskendahl, 2010; Müller, Martinsuo, & Blomquist, 2008) has described a positive relationship between project portfolio success and business success. At the same time, project portfolio management activities that are supposed to foster the portfolio success are not only found in the portfolio definition phase where the selection of projects takes place but also during project execution and even after project completion (e.g. Jonas, 2010; Voss, 2012). Hence, project portfolio management creates value not only by selecting the right projects but also beyond. Therefore, I argue that the definition of project portfolio success needs to be refined to cover the corresponding aspects of project portfolio management that lead to the creation of additional value.

The benefits inherent to a project portfolio emerge to a great extent from its single projects. As benefits and the value added are the original purposes of any project (Cooke-Davies, 2007; Turner, 1993) both are closely connected to project’s deliverables and consequently should be considered in the perception of project success. On the other hand, project success research has matured continuously (Davis, 2013; Ika, 2009; Jugdev & Müller, 2005) and our understanding of project success has evolved from a narrow definition in terms of time, budget, and scope specification (Atkinson, 1999; Morris & Hough, 1987; Turner, 1993; Zwikael & Smyrk, 2012) to a multidimensional construct including long-term strategic aspects and incorporating a comprehensive stakeholder consideration. That research calls for a paradigm shift regarding the understanding of project success from project management efficiency to project effectiveness with an emphasis on value creation rather than product creation (Cohen & Graham, 2001; Winter & Szczepanek, 2009). A comparable development of the definition of project portfolio success has not taken place so far.

Having the tremendous evolution of the comprehension of project success, the lack of knowledge regarding the management of value on project portfolio level, and the rising interest in this topic in mind, this research tries to refine the classical understanding of project portfolio success and to elucidate the corresponding activities on the project portfolio management level. As a result, a conceptual model is derived for further empirical validation embracing propositions for value creation through project portfolio management.

Thus, the main research question of this article is twofold:

  1. How can the understanding of project portfolio success be enhanced and refined?
  2. What are the antecedents for this refined project portfolio success?

Answering the first question is crucial for exploring the second. Defining success is a necessary prerequisite for exploring corresponding processes and management activities.

The reviewed research on project success reveals three major areas for the understanding of project success.

  • Firstly, the more the understanding of project success has matured, the more an organizational and strategic perspective has come into play. The value of projects has been connected to organization’s effectiveness, long-term effects related to customer relationships, and future business opportunities. (e.g. Lipovetsky, Tishler, Dvir, & Shenhar, 2002; Shenhar & Dvir, 1997)

➔ hereafter referred to as strategic aspect

  • Secondly, value lies in the eye of the beholder. Multiple, potentially contradictory, stakeholder perspectives have to be considered to gain a comprehensive grasp on project success. The recognition of multiple stakeholders can uncover additional value potentials. (e.g. Bryde, 2005; Freeman & Beale, 1992; Lipovetsky, et al., 2002; Shenhar & Dvir, 2007)

➔ hereafter referred to as stakeholder aspect

  • Thirdly, in order to gain an extensive comprehension of project success the post-project phase has to be considered. A project usually ends with the delivery of certain outputs. Only when these outputs are exploited and transformed to outcomes that have an impact, can benefits emerge—possibly years after project completion. (e.g. Pinto & Slevin, 1988; Slevin & Pinto, 1986; Turner & Zolin, 2012; Zwikael & Smyrk, 2012)

➔ hereafter referred to as exploitation aspect

Although the three aspects are partly interrelated and may overlap, each of them represents distinct perspective on success.

The strategic aspect on a project portfolio highlights the organization’s strategy and goals. It focuses on the integration of a strategy which is supposed to be realized by a set of projects (Meskendahl, 2010; Söderholm, Gemünden, & Winch, 2008). The stakeholder aspect builds on a comprehensive stakeholder analysis (Bryde, 2005; McLeod, Doolin, & MacDonell, 2012; Turner & Zolin, 2012). It incorporates various views on project performance by internal and external stakeholders and interprets success by the degree of their satisfaction. The exploitation aspect addresses the nexus between projects as temporary organizations and the required time-horizon of project outputs to become exploited and the consequential realization of value. It highlights the transition of project outputs to outcomes from a temporary project to a permanent organization and interprets a project as a process where inputs are processed and transformed to a certain output and outcome (Zwikael & Smyrk, 2012).

According to the classical and widely used definition of Cooper et al. (2002) project portfolio success is based on three elements: maximizing the portfolio’s value, linking the portfolio to the firm’s strategy, and balancing the portfolio. However, in the field of project portfolio management research, several additional elements of portfolio success have been developed. Jonas, Kock, and Gemünden (2013), for instance, interpret portfolio value as average project success, measured against the triple constraints and customer satisfaction, as well as the exploitation of synergies between projects, which represents the value added of a cross-project management on a portfolio level. A more comprehensive definition based on Shenhar, Dvir, Levy, and Maltz (2001) has been applied by Heising (2012) and Voss (2012) by including the future preparedness, which evaluates the long-term benefits and opportunities offered by projects, as a measure of portfolio success.

Based on the three key aspects drawn from project success literature and corresponding insights from strategic management, stakeholder management, and benefits realization management literature, several implications for project portfolio success can be shown:

  1. There is a strong strategic aspect in the context of project portfolios which has to be reflected by the project portfolio management. Project portfolio success is not only defined by the strategic fit but also by the strategic feedback quality leading to more successful strategies.
  2. Value is a multidimensional construct, which depends on the perception of the receiving parties. The consideration of relevant stakeholders not only unlocks additional value potentials, but also fosters mutual collaboration. Thus, project portfolio success has to reflect internal and external stakeholder satisfaction.
  3. In order to exploit project outputs, project portfolio management has to play an active role in the transition and post-project phase. Hence, not the average project management success but the business success created by the exploitation of project outputs is the adequate measure for project portfolio success.

The antecedents proposed in this study are drawn from the previously identified key aspects and the corresponding dimensions of project portfolio success. The model proposes that strategic control contributes to strategy success, early stakeholder orientation contributes to stakeholder satisfaction, and governance for exploitation contributes to project portfolio exploitation. However, due to supposed interrelations between the three dimensions of project portfolio success, the antecedents refer to project portfolio success as a whole. Table 1 summarizes the propositions and the corresponding key aspects of success, while Figure 1 shows the overall model.

Tables No. Proposition Corresponding aspect
1-3 Each dimension of project portfolio success—strategic success, stakeholder satisfaction and project portfolio exploitation—contributes independently to firm success. All aspects
4 Strategic control on project portfolio level contributes to project portfolio success. Strategic aspect
5 The effect of strategic control systems on project portfolio success is moderated by the external turbulence and is higher in environments marked by low turbulence. Strategic aspect
6 Strategic control provides valuable strategic intelligence (P6a) which in turn contributes to firm success directly (P6b) and through project portfolio success as an intermediate factor (P6c). Strategic aspect
7 Internal stakeholder participation within the portfolio definition phase contributes to project portfolio success. Stakeholder aspect
8 The effect of stakeholder participation on stakeholder satisfaction is moderated by strategic clarity. The better strategic clarity, the stronger is the effect. Stakeholder aspect
9 Customer orientation contributes to project portfolio success. Stakeholder aspect
10 The validation, monitoring, and tracking of project business cases (business case control) foster the benefits realization and lead to project portfolio success. Exploitation aspect
11 Clearly defined accountabilities for benefits realization contribute to project portfolio success. Exploitation aspect
12 Business case control and accountability for benefits realization have a positive synergetic effect leading to increased project portfolio success. Exploitation aspect

Table 1: Summary of all propositions

Summary of all proposed antecedents of project portfolio success

Figure 1: Summary of all proposed antecedents of project portfolio success

The presented framework encompasses activities along all phases of project portfolio management. They refer to the evaluation and selection of a project portfolio, its execution, and the exploitation of project portfolio outcomes. Table 3 summarizes and assigns the proposed activities along the project portfolio life-cycle. This illustrates that project portfolio management can contribute to value creation not only in the portfolio definition and execution phase. By that, the proposed framework differs from the classical project portfolio management understanding, which mainly focuses on project evaluation, selection, and resource allocation based on Cooper’s definition of project portfolio success.

Portfolio definition Portfolio execution Portfolio exploitation

Implications of the strategic aspect and its

effects on value realization

Strategic control

The firm’s strategy and its premises are scrutinized by project portfolio management.

The portfolio strategy is more robust and transparent to the organization.

Strategic control

The implementation progress and the premises of the deliberate strategy have to be closely monitored.

The strategy implementation can cope with and timely adapt to changing environmental requirements.

Strategic intelligence

The project portfolio and its strategy are frequently analyzed to gain new strategic impetuses.

New strategic opportunities can be revealed and project portfolio management can effectively contribute to the strategy formulation process.

Implications of the stakeholder aspect and its

effects on value realization

Stakeholder orientation

All relevant internal and external stakeholders are involved in the portfolio definition phase.

The portfolio’s value is maximized by including multiple stakeholders’ perspectives.

Mutual collaboration is fostered by aligning the stakeholder understanding of portfolio success.

Customer orientation

Customer relationships have to be continuously managed and developed.

Good customer relationships can reveal valuable information about market and technological opportunities.

Implications of the exploitation aspect and its

effects on value realization

Business case validation

Project business cases have to be profoundly scrutinized to prevent any optimism bias

Based on more robust and transparent project goals and benefits, the project portfolio management can identify and select the most valuable projects for execution.

Business case monitoring

Changes are managed not only with respect to budget, time, and scope, but especially in view of the defined goals, the respective business cases and its premises.

Projects are effectively steered for the purpose of the firm and not for their own sake.

Business case tracking

Business cases are tracked until the proclaimed benefits become apparent.

Transparency of the success of business cases countervails the optimism bias in the early definition phase and fosters the motivation of the project stakeholders to realize the benefits in the post-project phase.

Accountability for benefits realization

For every business case there are dedicated owner which are accountable for the realization of the proclaimed benefits.

The validity of project proposals is enhanced and there is a stronger commitment for the realization of proclaimed benefits.

Accountability for benefits realization

The responsibility of assigned project managers for success corresponds with their involvement in project definition and their empowerment to assert the project’s goal.

Early involvement will ensure the practicability of project proposals while empowerment fosters efficiency of project execution.

Although the framework is very broad in scope it contributes to theory in two ways. First, project portfolio management research can benefit from this work because insights from project success research have been adapted to the project portfolio level. Although these disciplines are closely connected, until now there has not been a similar approach to scrutinize the classical understanding of project portfolio success defined by Cooper, Edgett, and Kleinschmid (2001).

Second, new avenues for project portfolio management research have been explored. The interplay of corporate strategy and project portfolio management has been subject to several studies already. However, the adaption of strategic control to portfolio level has not been considered before in research, whereas the dialectic process between projects and corporate strategies has been recognized before (i.e. Midler, 2013; Srivannaboon & Milosevic, 2006). Furthermore, benefits realization management which gained attention especially in practice (OGC, 2011; PMI, 2013) has been reflected from a research perspective and were included in a project portfolio management framework.


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Julian Kopmann is a research assistant at TU Berlin (Technische Universität, Berlin) in Germany. After studying business engineering in Berlin and Rome, he worked for several years as a management consultant at KPMG. In 2012 he joined Professor Hans Georg Gemünden’s research team, where he was in charge of the sixth MPM (multi-project management) benchmarking study, which is one of the largest studies of its kind. Currently Julian is working on PhD publications concerning the value orientation and realization of benefits in multi-project environments.

©2014 Project Management Institute Research and Education Conference



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