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Category: Business and Industry
Date Submitted: 03/09/2011 02:25 PM
Executive Guide to Strategic Portfolio Management: Roadmap for Closing the Gap between Strategy and Results
Stephen J. Garfein President, RPM Systems Corporation
Abstract
This paper 1) develops a model for implementation of the PMI Portfolio Management Standard, 2) provides a framework for understanding the factors influencing senior executive decision-making, and lastly, 3) suggests a framework for selling strategic portfolio management to senior executives. In addition, two case studies are offered. The first a success story, the Boeing 787 Dreamliner illustrating world-class strategic portfolio management. The second the Airbus A380 is a case study in failed strategic portfolio management. (Exhibit 1) Both Boeing and Airbus made huge strategic portfolio bets on what the future of airline travel will look like. Both Boeing and Airbus placed these bets while taking into account all the other opportunities and demands in their strategic portfolios. And these strategic bets by Airbus and Boeing could not be more different.
AIRBUS A380 239 Feet in Length - 550 Passengers
Feet 25 50 75 100 125 150 175 200 225 250
BOEING 787 184 Feet in Length - 200 – 330 Passengers
Exhibit 1. The Airbus A380 and the Boeing 787 could not be more different from the perspective of strategic portfolio Management.
Pain and Pressure in the Executive Suite
As the three forces of 1) globalization, 2) changing technology, and 3) demanding ownership have converged, many executives have concluded they have no choice but to equip their corporations for rapid response to whatever changes may occur next in the competitive environment. Corporate executives have come to see the ability to change as key to organizational survival. Executives are scrambling to adjust to the new environment by demolishing traditional corporate policies and practices and introducing new strategies and structures, all with an eye to facilitating perpetual organizational transformation. (Friedman, 2005)...