Developing Portfolio Strategy

Many prominent organizations today are so interdependent and complex that they require a portfolio strategy to balance and coordinate the strategies of diverse enterprises. The right portfolio strategy can provide diversification from both global and local risks, financial security and reduced volatility of key value measures, the optimal timeline and pipeline for investments, and the necessary sharing of information and resources.

A commitment of resources across a portfolio of opportunities should be made only after a well-reasoned analysis that:

• frames decisions appropriately to understand portfolio interactions and consequences,
• develops portfolio alternatives that balance risks and coordinate competing demands for resources,
• assesses information gaps about uncertainties that contribute significantly to portfolio value,
• elicits values that recognize the need to make trade-offs and compromises in the portfolio,
• evaluates portfolio relationships and analyzes efficient frontiers of solutions, and
• builds buy-in and commitment to implementation through a coordinated management of change.