More than a decade of in-depth scientific research, performed by JigsEye partner Dr. Ir. Linda Kester, amongst more than 250 organizations has revealed that those who are effective in strategic portfolio management have a proven higher overall market performance. These firms typically accelerate and execute their strategy more effectively in comparison to their peers, while safeguarding current business results.
The in-depth research resulted in the scientific causal Strategy Acceleration Model® and the Strategic Portfolio Framework® methodology that have been awarded by amongst others ISBM, ISPIM, PDMA, MSI and TU Delft. Both approaches combined with years of business experience form the basis of the work of JigsEye.
Strategic portfolio management essentially encompasses the dynamic decision making processes through which firms make resource allocation decisions.
Firms wishing to stay profitable in the short term while achieving long term growth are dependent on developing the right sets of new products and services for the right markets. In order to do so it is crucial to allocate the firm’s limited resources effectively and continuously decide: which new projects to select, which running projects to continue or terminate, and which existing products and services to support or delete.
Research identified strategic portfolio management as one of the most important strategic decision making processes for firm success, but also one of the most challenging ones. In light of market developments, digital transformation, (fast) changing customer needs, strategic transition, and limited funds, firms frequently struggle with:
Portfolio overload: doing too many projects for the available resources leads to ad hoc firefighting and dilutes strategic focus
Strategic disconnect: employees do not understand if and how their activities contribute, and tend to set their own priorities
Imbalance in project scope and focus: priorities are not clear or not directly connected to strategy execution in the short and longer term
Reduced portfolio value: projects that do not (sufficiently) contribute continue to linger on, while consuming valuable resources.
Strategic portfolio management effectively contributes to tackle the struggles mentioned. Three dimensions have proven to be key:
Overview: firms that make portfolio decisions while having complete overview of their portfolio in relation to market developments and strategic change, understand the role of each project in that portfolio, which enables strategic alignment.
Focus: firms that have translated their strategic aspiration into a very clear focus to perform, can set clear priorities, which prevents overload and enables balance across each phase in the strategy execution.
Agility: firms that are capable of (pro)actively re-allocating their resources by terminating activities that do not sufficiently contribute to more promising initiatives, will maximize the value of their portfolio over time.
The scientifically grounded Strategy Acceleration Model® shows the why and how of strategy execution: It pinpoints which organizational mechanisms hinder and enable effective strategic portfolio management, encompassing both the formal and informal aspects of decision making and ways of working. This causal model enables benchmarking of (parts of) organizations to identify key bottlenecks that make their strategy execution less effective.
The Strategic Portfolio Framework® methodology provides the backbone for strategy acceleration: It creates the visual anchor point for overview, focus, and agility and enables organizational alignment.