Book Review: Project Management: Strategic Design and Implementation, 5th Edition

Product development companies are increasingly confronted with an unforgiving global marketplace, which urges the top management to pursue every product development opportunity that appears on the road. However, a company cannot typically fund all the product development opportunities which are available. This situation incurs an important question: Which product development opportunities should a company choose to pursue in order to maximize the business results?
Portfolio management is an essential means to accommodate this paradox. Starting from the theory of the product development process and contemporary portfolio management theories this research investigates three central aspects: 1) the structural elements and principles of portfolio management, 2) the phenomenon over-commitment, and 3) the dynamic development portfolio. The three major contributions documented in this dissertation are a reference model for portfolio management, and a mindset together with three supporting tools.
The reference model builds on a set of defined and interrelated elements, which in total comprise the portfolio management architecture in a company. The model accentuates that it is beneficial to discriminate between at least three generic classes of portfolios when making decisions about the new product project portfolio mix. This supports a nuanced and coherent end-to-end approach to portfolio management.
The suggested mindset explains the dynamics of the burdensome phenomenon over-commitment. The thinking pattern rests upon the fundamental assumption that over-commitment well may be rooted in an unrealistic perception of the product development capability within the company compared to the portfolio.
The three supporting tools encompass the dynamic portfolio map, the project evaluation matrix and the project planning matrix. These are interrelated tools, which in combination can be utilized to visualize the dynamic portfolio. An explicit and dynamic linking between each project’s development process and the portfolio overview forms the crux of the tools.
The research project has been carried out at the Technical University of Denmark (DTU) and, partially, at the Massachusetts Institute of Technology (MIT). The results of the dissertation build on research literature and empirical studies in leading Danish and American companies. All contributions have been confronted with industrial portfolio management practices or industry professional’s judgement.
The contributions encourage an improved understanding of the portfolio management concept as well as support industry professionals in their efforts to compose and continuously maintain a business wise strong product development portfolio.

Resume
Virksomheder konfronteres i stigende grad med et globaliseret marked, hvor den skcrpede konkurrence stiller store krav til at virksomhederne lancerer nye produkter i et hojt tempo. Situationen tilskynder ledelsen i mange virksomheder til at forfolge alle ideer til nye produkter, som viser sig. Kun de fcrreste virksomheder har imidlertid ressourcer nok til at realisere alle ideer. Det giver anledning til et vigtigt sporgsmal: Hvilke ideer til nye produkter bor en virksomhed vclge at realisere saledes at forretningsskabelsen maksimeres?
Portfolio management er et centralt middel til at imodekomme dette paradoks. Med afsct i procesteori for produktudvikling samt portfolio management teorier undersoger denne forskning tre centrale aspekter: 1) de strukturelle elementer og principper i portfolio management, 2) fcnomenet over-commitment, og 3) den dynamiske udviklingsportefolje. De tre hovedresultater dokumenteret i afhandlingen bestar af en reference model for portfolio management og et tankemonster (mindset) sammen med tre understottende vcrktojer.
Referencemodellen bygger pa en rckke definerede og sammenhcngende elementer, som samlet set udgor portfolio management arkitekturen i en virksomhed. Modellen fremhcver, at det er fordelagtigt at skelne mellem mindst tre generiske portefoljetyper, nar der skal trcffes beslutninger om sammensctningen af portefoljen af udviklingsprojekter. Det understotter en nuanceret og sammenhcngende tilgang til portfolio management.
Tankemonstret forklarer de dynamiske aspekter af det byrdefulde fcnomen over-commitment. Tankemonstret er baseret pa antagelsen, at over-commitment i virksomheden kan skyldes en urealistisk opfattelse af produktudviklingskapabiliteten holdt overfor portefoljen.
Det dynamiske portefoljekort, projektevalueringsmatricen og projektplanlcgningsmatricen udgor de tre understottende vcrktojer. Vcrktojerne kan i kombination bruges til at visualisere den dynamiske portefolje. Kernen i vcrktojerne bestar i en direkte og dynamisk kobling mellem hver projekts udviklingsproces og et overblik for projektscttet.
Resultaterne bidrager til en styrket indsigt i portfolio management konceptet ligesom de understotter fagfolk i deres bestrcbelser pa at sammensctte og lobende fastholde en forretningsmcssig stcrk produktudviklingsportefolje.
Forskningsarbejdet er sponseret af Dansk Industri (DI) og er delvist udfort pa Massachusetts Institute of Technology (MIT). Afhandlingens resultater bygger pa litteraturstudier kombineret med omfattende empiriske studier i forende danske og amerikanske virksomheder. Alle resultater er blevet konfronteret med industriel portfolio management praksis eller industri fagfolks vurderinger.

Managing the New Product Portfolio

This conceptual paper examines our existing world-view portfolio is defined the management of that portfolios from that of project and new product development portfolios to other portfolios that exist in an organisation, such as the asset portfolio, resource portfolio and ideas portfolio. Portfolios do not exist in isolation in an organisational context, but instead overlap and interact. This paper argues that there is a need to move another step higher, and examine the relationships between portfolios of projects and related activities across an organisation in order to optimise outcomes across the organisation. We propose the need for ‘enterprise portfolio management’ and suggest that this approach has the potential to improve organisational efficiency, and in the longer term could be a source of competitive advantage.

/pdf/eyes-wide-shut-expanding-the-view-of-portfolio-management-4pm2rnxee6.pdf

Eyes Wide Shut: Expanding the view of portfolio management

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Eyes Wide Shut: Expanding the view of portfolio management