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Matrix Management Wiki

5C. Portfolio Management

  • 5C1. A portfolio is any collection of similar types of items.
  • 5C2. In a matrix, portfolios exist in most sectors (markets, customers, products, supplies, suppliers, etc.) as well as in all vectors. Portfolios are therefore the primary means by which sectors and vectors are managed.
    • 5C2i. For example, in the product sector, all products are collected into a product portfolio. In a vector, all the projects are grouped into a project portfolio.
  • 5C3. Managing portfolios is fundamental or central to managing a matrix.
  • 5C4. Rules for structuring and managing portfolios:
    • 5C4i. Combine all like elements together to form a portfolio.
      • 5C4ia. There is no one right way to form portfolios. They need to be relevant to the business.
    • 5C4ii. Make sure there is a portfolio owner for each portfolio.
    • 5C4iii. Make sure that each segment (“whole”) that is important to the business has an owner, and if necessary, a Steering Council.
    • 5C4iv. If a portfolio is large enough or complex enough that more than one person is needed to manage it, form a Steering Council.
      • 5C4iva. The portfolio owner is the leader of that council and she has individual accountability for the portfolio.
      • 5C4ivb. The Steering Council for the portfolio shares team accountability for the portfolio.
      • 5C4ivc. The same would be true for the subportfolios: each has a subportfolio owner and Steering Council.
    • 5C4v. If the portfolio is too large for a single Steering Council to manage, break it down into subportfolios. Each subportfolio needs an owner and may or may not need its own Steering Council.
    • 5C4vi. If the number of elements in a portfolio is too large or if certain elements need a great deal of attention, e.g., new products in development; then the portfolio should be broken down into subportfolios.
      • 5C4via. Subportfolios should be structured so they best support the business. For example, if the customer sector is the primary sector, and if there are customer segments that consume different types of products, then subdivide the portfolio by customer segment.
      • 5C4vib. A subportfolio must have an owner. If it’s large enough or complex enough, it may also have a Steering Council.
      • 5C4vic. The Steering Council for a subportfolio would most likely serve as the operational level team: translating the goals for the subportfolio (which would be set with the team at the portfolio level) into specific deliverables for individuals or deliverable teams.
      • 5C4vid. Each subportfolio can be managed differently, while maintaining the consistency of the whole portfolio.
    • 5C4vii. Only set up as many levels as needed to manage the segment.
      • 5C4viia. If you are duplicating team membership, you probably have too many levels.
    • 5C4viii. Prioritize the portfolio from most important to least important.
    • 5C4ix. Allocate resources to the portfolio based on priorities.
  • 5C5. Some portfolios, such as product portfolios, are relatively fixed, even though new products are added each year and old products are retired. Project portfolios are very dynamic since projects are temporary endeavors. As projects are completed, they drop out of the portfolio and new projects are selected and added to the portfolios.