Project portfolio management: The linchpin in strategy processes

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Cambridge Handbook of Organizational Project Management, 2017, pp. 92 - 105
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© Cambridge University Press 2017. Introduction Project portfolio management (PPM) is a central component of organizational project management (OPM), especially through its role in both the formulation and the delivery of organizational strategy. Corporate activities are increasingly carried out in the form of projects, in a trend that has been called “projectification” (Midler, 1995). In particular, for the implementation of complex innovations, it is not enough for organizations to focus on the successful management of individual innovation projects; they must also manage a large number of interdependent projects from a portfolio perspective. In today's dynamic environment, organizing by projects has become the rule rather than the exception, and organizations face challenges in managing these large project landscapes (programs and portfolios). The management of project portfolios is closely linked to the implementation of strategies. As strategies are ultimately implemented by projects, PPM – as a link between corporate strategy and projects – plays a central role (Meskendahl, 2010). In most research and practice this role is considered from a top-down perspective: strategies are considered to be a given yardstick for the prioritization and selection of projects and the allocation of resources. From such perspectives, PPM acts as the recipient of strategic goals and requirements that need only to be operationalized. However, the strategic management literature has long recognized the importance of emergent strategy; and that the realized strategy (the strategy that is actually implemented) often strays from the intended strategy (Mintzberg, 1978). Surprisingly, this is hardly considered in existing research models and standards for PPM (PMI, 2013). While there is some empirical evidence to suggest that hierarchical, formal, top-down approaches are not the actual practice of PPM (Christiansen & Varnes, 2009; Jerbrant & Gustavsson, 2013; Martinsuo, 2013), a much broader debate is needed to fully explore the role of PPM in the context of emergent strategies. The goal of this chapter is therefore to explore the role of PPM in the relationship between the formulation and implementation of strategy and consider both the top-down approach as well as the bottom-up strategy emergence. We first discuss emergence in the context of strategy implementation and the role of different phases in the PPM process that affect strategy implementation.
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