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Portfolio Management

An overview of portfolio management in digital product and solution companies.



Summary

Here's a summary of the key points from the briefing on portfolio management:


  1. Portfolio management is a process for managing a collection of product investments (offerings or value streams) to ensure they align with organizational strategy and are optimally funded.

  2. The two main questions portfolio management answers are: Are we building the right things? Is our investment in those things appropriate?

  3. There are two main sub-practices:

    • Portfolio Review: Assessing the current state of offerings

    • Portfolio Analysis: Evaluating gaps, lifecycle balance, and making decisions

  4. Key tools/frameworks mentioned:

    • BCG Growth-Share Matrix for analyzing product performance

    • Product Lifecycle stages for assessing portfolio balance

    • Financial metrics like IRR and NPV for comparing investments

  5. Best practices include:

    • Separating incubation and evolution portfolios

    • Conducting reviews in-person

    • Publishing transparent results

    • Having clear accountability for the process

  6. Common challenges:

    • Lack of clear business motivation/strategy

    • Difficulty getting good data in large organizations

    • Lack of executive commitment to timely decisions

  7. Leadership's role:

    • Initiate and enforce the process

    • Provide clear motivation and strategy

    • Make timely decisions

    • Fill the "motivation gap" between high-level vision and product-level plans

  8. Product managers should:

    • Lead in representing their product

    • Prepare business cases/plans

    • Involve key stakeholders in portfolio presentations


The briefing emphasizes that effective portfolio management is crucial for maintaining competitiveness and optimizing investments in product development.

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