Why is it so important?

Companies without effective new product portfolio management and project selection face a slippery road downhill. Many of the problems that plague product development initiatives in businesses can be directly traced to ineffective portfolio management. According to benchmarking studies conducted by Dr. Cooper and Dr. Edgett, some of the problems that arise when portfolio management is lacking are:

1. A Strong Reluctance to Kill Projects
   - no consistent criteria for Go/Kill decisions
   - the result, projects are simply added to the 'active list' of projects with no clear directional focus; resources are thinly spread; long times to market; poor quality of execution; and higher-than-acceptable failure rates
   
   
2. Poor Go/Kill and Project Selection Decisions
   - many mediocre projects in the pipeline (i.e. extensions, enhancements) and a lack of high reward projects
   - few good projects that do exist are starved of resources, take too long to get to market and fail to achieve full potential
   
   
3. The Wrong Projects are Selected
   - decisions are not based on facts and objective criteria, but on politics, opinion and emotions
   - many of these 'ill-selected' projects fail to bring reward to the company
   
   
4. Strategic Criteria are Missing
   - no strategic direction for project selection and, therefore, projects are not aligned with the business's strategy
   - projects are typically a poor fit with strategy and overall spending does not reflect the strategic priorities of the business
   

Portfolio Management is about doing the right projects. If you pick the right projects, the result is an enviable portfolio of high value projects: a portfolio that is properly balanced and, most importantly, supports your business strategy.