Clear line of sight
- Blog
- Benefits realization
- Portfolio management
- Vision
- MoP
February 12, 2020 |
3 min read
- Blog
- Benefits realization
- Portfolio management
- Vision
- MoP
Management of Portfolios (MoP®) introduced the concept of ‘clear line of sight’, a technique that seeks to ensure a transparent chain is continually demonstrated from strategic intent through to benefits realization. That is, a clear understanding of the positive contribution the portfolio will make to the organization in the delivery of strategic objectives and measurable performance improvements. A portfolio is the totality of an organization’s investment (or segment thereof) in the actual business changes required to achieve its strategic objectives.
The greatest risk threat to any organization is committing precious resources (i.e. people, assets, materials, funding and services) to solving the wrong problems. As such, organizations need to identify, define and solve the problems that deliver the most value.
So, before starting any programme or project, organizations should begin with strategy development and planning as a perpetual management activity. Since organizational (including strategic) objectives are required to align and establish agreement around desired outputs, capabilities, outcomes and/or benefits. Strategy is also used to continually assess and pivot the organizational direction in response to volatile, uncertain, complex, and ambiguous (VUCA) conditions. They help set organizational priorities in the short and long term and focus the organizational energy (the extent to which the organization has mobilized the full potential of its people) towards achieving forecast and emergent benefits realization.
According to Bernd Vogel, organizations can move their people towards a ‘productive energy state’ by developing and sharing their vision and objectives of where the organization is going and what its purpose is. Objectives and Key Results (OKRs) is a proven framework for defining and tracking objectives and their outcomes to interconnect organizational, team and individual objectives in a hierarchical way to measure results, making everyone work together in one unified direction. Whilst portfolio management will enable informed decision-making, without the collective, coordinated effort of all those involved (and the management of that effort) the delivery of the portfolio and its contribution to strategic objectives (i.e. the clear line of sight) will be at risk.
Conventional wisdom dictates that strategic objectives should be – Specific, Measurable, Achievable, Relevant and Time constrained (SMART). But SMART objectives undervalue ambition, focus narrowly on individual performance and ignore the importance of regular discussion of organizational (including strategic) goals. To achieve a clear line of sight, leaders should set goals that are FAST (Frequently discussed, Ambitious, Specific and Transparent to everyone). By making objectives FAST rather than SMART, organizational goals can be embedded in ongoing discussion to review progress, allocate resources, prioritize initiatives and provide feedback. These objectives should be difficult but not impossible to achieve, translatable into firm metrics that demonstrate clarity on how the organization will achieve each goal and measure progress, and transparent to everyone within the organization.
Strategic planning, therefore, is an integral portfolio function that supports investment decision-making, shapes and guides what an organization is, who it serves, and why it does what it does — with a focus on serving and providing value to its customers. It articulates not only where an organization is going and the actions needed to progress there, but also how it will know if it is successful. This is the clear line of sight which it achieves through effective portfolio management, particularly the continuous cycle of the portfolio definition practices – understand, categorise, prioritise, balance and plan – to continually optimize the portfolio.
Clear line of sight is only possible if the programme and project was the 'right' initiative in the first place, actually contributes to the organization’s strategic objectives, and the forecast and emergent benefits represents value for money and return on investment. So, changing the organization and running the organization aligned with strategy and vision is important to ensure balance is maintained and that any business change proposals can be successfully implemented and sustained using existing resources. Strategic planning is paramount if organizations are to achieve a clear line of sight to narrow the capability gap between where the organization currently is and where it wants to be.