We have categorized 3 documents as Portfolio Management. All documents are displayed on this page.
Portfolio Management is swiftly becoming a significant factor in the decision-making processes of Fortune 500 companies, with 97% of these renowned corporations considering it "important" or "very important," according to a survey by PricewaterhouseCoopers (PwC). As Dick Haworth, Chairman of Haworth Inc subtly articulates, "Organizational strategy is a portfolio of change projects." Today, we explore the reasons behind its rising prominence, underlying principles, and the best practices any business executive should consider.Learn more about Portfolio Management.
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Portfolio Management Best Practices
Portfolio Management Overview Redefining Risk in Portfolio Management Reaching Operational Excellence through Portfolio Management Best Practices in Portfolio Management Key Takeaway Portfolio Management FAQs Recommended Documents Flevy Management Insights Case Studies
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Portfolio Management is swiftly becoming a significant factor in the decision-making processes of Fortune 500 companies, with 97% of these renowned corporations considering it "important" or "very important," according to a survey by PricewaterhouseCoopers (PwC). As Dick Haworth, Chairman of Haworth Inc subtly articulates, "Organizational strategy is a portfolio of change projects." Today, we explore the reasons behind its rising prominence, underlying principles, and the best practices any business executive should consider.
Boiling it down to the basic principles, Portfolio Management primarily revolves around two core concepts: risk and return. In an attempt to minimize risk while maximizing return, organizations diversify and allocate resources across a range of investments, each with their own risk-return trade-off.
Here, capital and resources are akin to investments, and strategic initiatives represent the portfolio. Your portfolio should be balanced, function as a whole, and support your Strategic Planning objectives. Overlapping functionalities, initiatives that don't contribute to the overall goal, or investments that fail to align with your organizational strategy should be phased out. In essence, Portfolio Management ensures that every investment is justified and aligns in unison towards achieving your organizational objectives.
For effective implementation, take a look at these Portfolio Management best practices:
"Risk" in Portfolio Management extends beyond the conventional understanding of potential monetary loss. Here, risk also manifests as the potential loss of opportunities. Each strategic initiative that does not contribute towards the ultimate goal becomes an opportunity-cost limiting your organization's capacity to invest in more profitable ventures. Therefore, risk Management in this scenario is proactively ensuring that every initiative undertaken is justified and profitable.
Explore related management topics: Risk Management
Organizations can aim for Operational Excellence by using Portfolio Management to optimize resources and invest in initiatives that provide the most value. The process underscores the importance of Performance Management, urging continual assessment of each undertaking in the portfolio. Regular progress tracking can enable effective decision making, enhance transparency, and improve accountability, leading the organization towards Strategic Planning goals.
Explore related management topics: Operational Excellence Performance Management Decision Making
Adopting a Portfolio Management approach helps organizations make strategic decisions with a broader perspective in mind. By ensuring a high level of alignment between strategic initiatives and business goals, Portfolio Management aids in Resource Allocation, Risk Management, and regular assessment of investments' performance. As higher-level Strategy Development processes continue evolving, Portfolio Management emerges as a powerful tool to navigate this landscape and aid in Business Transformation.
Explore related management topics: Business Transformation Strategy Development
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