Seeing Beyond the Data: Strategic Operations Portfolio Decisions vs. Operational Portfolio Decisions
In his article on Smartorg.com, Don Creswell makes the distinction as follows: (emphasis added)
The prevalent distinction in most business settings is between strategic and operational or tactical portfolios, with the latter prevailing simply because this is where the most action is: day-to-day operations where the details of project management (budgets, time cards, stage gate reviews, etc.) are routinely updated and data is readily available to enable adjustments and get things back on track. Decision makers tend to be project managers and data input to the system is provided by dozens, even hundreds of people. In operational portfolios, data drives decisions.
Strategic portfolios involve a much smaller user base. Decision makers tend to be senior executives, leaders of cross-functional teams (finance, marketing, R&D) and their staffs. Unlike operational portfolios, where there may be hundreds or even thousands of projects, strategic portfolios generally involve a relatively small number of projects, initiatives or opportunities that will have a major impact on the future of the company.
Another characteristic of strategic projects is a lack of data, since many factors involve uncertain futures that significantly complicate decision making. Data does not drive decisions since little data about the future exists. At best, data and information is a starting point for engaging stakeholders in conversations around uncertainty (“what you know and what you don’t know”) and its impact on market size, margins, growth rate, market penetration, price, cost and other factors that contribute to value creation.
The chart is a decision template for an unknown yet planned-for future.
Its simplicity may tempt you to skip this step. However, its simplicity is exactly what can make all the difference in your decisions about which projects to pursue and which must, regretfully, be postponed or even abandoned.
Spend even a few minutes with this chart to analyze your projects, and you’ll see it takes you beyond the data to decision making for the future.
Read the Creswell article here: https://smartorg.com/valuepoint53/
Larry Tu, Warrior and Author, has written a series of 3 books with a comprehensive discussion of OPM for the business world of today. His goal is to guide business founders, leaders and operations portfolio managers in best practices to build the business of the future. He shares generously from his experience as a serial entrepreneur who has launched several successful businesses and operations/project management leader in large companies.