The concept of managing a set of projects of initiatives may be new in the area of change management, it is commonplace for a lot of large financial services firms in the project management arena. The idea is that across a large number of projects, these are then divided into a few portfolios in order to better manage the outcomes within each portfolio, versus a scattered, project by project approach.
Where did the concept of portfolio management come from? And how do we best apply this within a change management context when there are multiple changes going on at any one time?
Portfolio in Finance refers to a combination of financial assets such as stocks, bonds and cash. The goal of managing a portfolio is to get the best outcome according the risk tolerance, time frame and investment objectives.
This really is not all that different in change management. Change interventions and activities are designed to maximise the return on investment and the embedment of change.
- Change measurement and reporting focus on leading risk indicators such as change readiness, stakeholder engagement levels and progress of capability development in terms of training completion rates.
- Like finance investments, initiatives also have different priorities and risk exposures. Those that are higher priority and have higher risk exposures need greater focus than those that are lower priority and less risk exposures. Therefore, clear prioritisation is critical to ensure clarity of focus
- The timing of initiatives is also a notable comparison. Some initiatives take a long time to implement and embed, and require significant continued sustainability to execute on. Other initiatives may be much faster to implement to reap the benefits. From a change management perspective, focusing on the people requirement as a result of the speed of implementation is key. A project for the long-haul requires continuous updates and engagement, versus something that is more intense and quick in roll out
So what can we learn from financial portfolio management approach?
- Focus on data
Data is king in finance. The goal of the overall portfolio can only be assessed in terms of its financial performance. Imagine trying to understand the performance of a financial portfolio without being able to look at its performance? It is the same for change management. We need to be able to assess the outcome of various initiatives within the portfolio. For example:
- What are the impacts across initiatives? How do they impact the same business unit or stakeholder groups? Which business units are at risk due to change volume planned? How can the risk be managed or mitigated?
- How is the change embedment tracking? This can be measured in terms of change readiness or in terms of more project-specific measures such as specific behaviours or any efficiencies or savings targeted
- Speed of implementation is also key to measure. Is there a clear sense of the speed in which different projects within the portfolio are operating at? What are the short and sharp ones versus the long and arduous projects?
2. Focus on risk
In a way, managing change can be seen as an investment in risk mitigation as mentioned previously. In overviewing the various projects within the portfolio, be aware of their corresponding risk exposures.
Some of the ways in which we can value the risk exposure of initiatives related to change include:
- Projects that are deemed higher risk because the quantum of change impact is higher and more complex than others?
- Stakeholder support and drivership level
- Sponsor style and level of involvement in breaking through any obstacles and being visible
- Project team health. Is the team cohesive and high performing or plagued with conflicting personalities and siloed work streams?
- Level of awareness across impacted employees
3. Focus on analysis and reporting
A finance portfolio manager spends his/her time on understanding the performance and risks or each investment and the overall portfolio. In the same way, in order to understand how the overall change portfolio is performing it is key to review the whole group of initiatives regularly.
There are routines that can be designed into business-as-usual activities. For example, as a part of regular business planning sessions, one aspect could be to review the performance of the change portfolio metrics and reports. This would involve various stakeholders in the planning process, thereby focusing their attention of managing change and giving them accountability in this regard.
The Project Management Office could also benefit from incorporating change management metrics into their regular planning and review routines. Change metrics and reports would then sit alongside of other cost and schedule data to form a holistic view of making portfolio decisions regarding prioritisation and project roll out.
In all of these cases the change practitioner has a crucial role to play – the analyst and story teller. Simply by presenting a set of data is not necessarily going to add value to the business. The change practitioner needs to analyse the data, look for patterns, risks and opportunities. Are there ways in which the projects could be better sequenced or packaged? Are there key risks in embedding change looking at the overall picture? What would particular parts of the business be going through across the initiatives? Using data visualisation will convey the story powerfully. Check out digital tools such as The Change Compass to support you in crafting and telling the change story to your stakeholders.
To read more about change portfolio management read our article The Ultimate Guide to Change Portfolio Management.