A true summer story about Portfolio Management

Summer holidays and Portfolio Management don't have anything in common? You might think so. In fact, they have more in common than you would guess, and it requires a good Portfolio Manager to stay on track...

 

A couple of days ago I returned from our summer holidays at the Atlantic coast of southern France. We - my wife, our two kids and I - have a little retreat off the bustles of the usual holiday crowds. Actually, we have been going to the same place for several years because we come back relaxed, mentally reset, full of new strength, full of new ideas - and with a trunk full of that excellent wine and good food which you will only find in France.

 

This time our holidays were a particular challenge from the outset. After very busy months for all members of the family the overall strategy was set to relax and restore energy. However, the kids are now older and have their own demands that we needed to align with the overall strategy. I had some special plans that I wanted to sneak in. My wife also put her pet ideas - well formulated demands that were hard to negotiate - on the table.

 

Against the strategic objectives we tallied our demands. We needed to optimise against clear limits: Time was clearly restricted. There is a point when we all have to back at work or in school. Resources could not be duplicated. Our daughter, for example, had to agree that she simply cannot be both at the beach and on horseback at the same time. Finally, the budget has some limits that shouldn't be stretched too far if you want to go on vacation next year again.

 

All initiatives were negotiated over a couple of weekends and evenings, hottening up as our holidays approached. All negotiation tricks were applied by all parties - threatening, bartering, quid-pro-quos - but in the end the constraints could not be changed and we all had to come up with a "workable" portfolio of holiday initiatives.

 

Risks were identified and contingency plans had to be developed. We had been told that it would be very rainy and windy this year. The likelihood seemed pretty high, the impact earthshattering. So, we decided to pack an extra amount of books, take the Nintendos with dozens of extra games and plan for alternative initiatives in case the risk would occur, e.g. trips to museums, castles or to one of the largest zoos in Europe. Luckily, the weather turned out to be warm and sunny, actually both very warm and very sunny. We were quite happy that we did not invest more in our contingency plans than some extra weight and space in our car trunk.

 

With the ideal portfolio mapped out for our holidays (reading, relaxing at the beach, collecting shells, building castles in the sand, riding, skimboarding, surfing, trick-scooting and many more) we could now embark on the "delivery" and “controlling” of the portfolio. Escalations occurred – mostly because of clashes between initiatives, usually because of delays or last minute changes in priorities - and usually between the two most demanding "business units", our kids. Critical issues had to be resolved to achieve holiday objectives. For example one day a skimboard broke and required an extra investment. The risk of a working TV with 20 channels occurred (originally put at low likelihood and this accepted). New demand came in constantly and had to be balanced with our on-going initiatives and constraints, e.g.: “Daddy, I want to do inline skating. I need inline skates. I can't live without them any longer. Please!".

 

Critical changes were forced upon our on-going "beach trip" operations, sometimes nearly at the point of no return: "Actually, we don’t like that beach. Let’s go elsewhere. Oh, and please, can you carry all the stuff back to the car?" But we also realised unexpected returns from some initiatives, much higher than anticipated: We stumbled over a rather unknown natural history museum in what used to be a splendid stately home. We were so amazed by its richness, the interactive displays and the didactics applied to fascinate even the most discriminating vistors (kids!) that we actually spend hours in the museum instead of a short stop-over (yet another unexpected change!).

 

Thorough portfolio management was needed day-in, day-out to keep objectives, schedule, resources and budget aligned... Close monitoring and regular portfolio meetings (also known as "breakfast") helped stay the course. We managed not too badly. In the end, the core business KPI – family satisfaction – was all green. This was supported by all underlying metrics.

 

Now guess what… requirements gathering has already started for the next “summer holiday portfolio”: “Darling, next time we absolutely need to ...”

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About the Author
Evangelist for IT Financial Management (ITFM), IT Governance and IT Portfolio Management, consulting IT organisations for Close to 15 years ...


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