Elevating Strategy Planning through Strategic Portfolio Management
Here at StrategyBlocks we talk a lot about creating a strategic plan for your business and making it actionable. For many companies, that’s actually the easy part. Organizations with a vision can do this well – they understand their strategy and what is driving it. They know how they want to get there and they know who is in charge of what. They may also have figured out that creating a highly visible tracking system helps keep the process transparent for every invested party.
So what’s missing? In truth, a very critical part. It’s known as Strategic Portfolio Management (SPM) and it’s what sets apart the drivers from the mere coasters when it comes to executing strategy. Having a strategic portfolio means identifying those areas of strategic growth and planning for the business. Creating actionable management of that portfolio requires more granular, and far tougher decisions. Which initiatives should be executed, and when? Which should fall off the radar or at least be tabled? What metric determines success? Who will own the process?
A great way to understand Strategic Portfolio Management is to compare it to financial investing. You are most likely familiar with terms like ‘financial planning’ and ‘portfolio management’ when it comes to investing, and those terms are often used interchangeably. However, they mean very different things. Financial planning – just like strategic planning – is the art of determining your vision, creating goals to reach that vision and developing a plan of action to achieve those goals. Portfolio management on the other hand, whether you use the term in relation to investing or to strategy, means the day to day active management of that bigger plan. It’s the difference between doing a project right, and doing the right project.
How can you tell if your organization is ready for Strategic Portfolio Management and, if you are, where do you start? As one of the leading solutions for SPM on the market, we have some suggestions that will help ensure you see more successful results from your strategy execution.
Understand your digital environment
Managing strategy in the digital age is far different than it was even ten years ago and, what’s more, it is still under constant flux. One of the key elements of Strategic Portfolio Management is creating an agile strategic environment that utilizes technology without being overburdened by it.
In this current era of digital transformation across all industries, SPM is designed to simplify and streamline decision making and execution of strategic initiatives. SPM, when used properly, can serve as the water wheel for every department, delivering needed communication and analysis in order to funnel the right resources to the right tasks.
Extract value from your data
In a technology-driven world there is a digital solution for everything. That means that each department or business system can be driven by a different solution. Trying to corral those solutions and understand the various points of data and how they influence one another can be daunting at best, and often downright impossible.
In order to make data actionable, and allow decision makers to create the right strategy to execute, it has to be digestible. SPM helps manage this process and gives executives a clear understanding of what is working, how it’s working and where changes can be made.
Ideally, this level of insight can and should come from one solution. StrategyBlocks designed its SPM functionality to enhance and support the other strategic tools on the platform, helping them to work together to deliver real time, actionable insights.
Ensure the decision-making process is transparent and agile
One study showed that 61% of leaders acknowledge their companies struggle to bridge the gap between creating a strategy and the daily execution of it. Add to that fact, 30% of leaders who say their biggest challenge in executing on strategic initiatives is coordinating across departments. Clearly, even the best laid strategy can prove utterly disastrous without communication and execution.
One of the biggest hurdles to overcome within the digitally-transforming environment is aligning the agility and transparency of modern product execution with more traditional ‘top-down’ leadership tendencies, which rely on drawn-out decision making processes. This type of alignment gap is not uncommon between leadership strategic goals and operational strategic goals. The former is often most concerned with competitive differentiation and customer feedback, whereas the latter is under pressure to reduce inefficiencies and manage costs.
SPM automates organizational strategy into actionable plans that prioritize value and feasibility. It gives the executive decision makers the data they need in the format they require to make smart decisions on how and when to allocate resources. It allows executives to track progress in real time and give feedback in an agile, transparent way. It provides a system of record which can be readily digestible, helping the organization see results on its strategic initiatives as they are happening.
Strategic Portfolio Management is an economic decision as much as it is a business one. It helps to accelerate the decision making process and leads to better choices around funding and resource allocation. It addresses current projects and reduces backlog, while planning for what’s ahead. Most importantly, it helps turn a strategic plan into a strategic success.
To learn more about StrategyBlocks’ Strategic Portfolio Management solution, contact us here.