Communicating With Key Personnel About Portfolio Decisions

Instructor: Martin Gibbs

Martin has 16 years experience in Human Resources Information Systems and has a PhD in Information Technology Management. He is an adjunct professor of computer science and computer programming.

Communication is a critical component of project portfolio management. In this lesson, you will learn strategies for communicating to key personnel and obtaining approval for decision points. We will also discuss the importance of the approval process.

Communication and Approval

If you were to buy a new house without first consulting with your spouse, or family, or even your close neighbors, what would happen? What type of conflict would arise as a result of this decision? True, you may have the financial means to buy the house, and technically you don't need approval for the decision, but there WILL be consequences!

The same applies to portfolio management. In many organizations, however, there is a formal chain of command that you need to follow.

Who Are the Key Decision Makers?

Organizations have varying forms of a governance structure, which is a chain of command in terms of reviewing and approving projects and portfolios. The day-to-day management is usually handled by a project management office (PMO).

As you go up the chain in the organization, the scope of decisions get made across the organization. In other words, you would not need the CEO or board of governors to approve day-to-day project tasks (unless they are complete micro-managers!); likewise, a project team is not responsible for the overall strategic direction of the organization. They must support the organization's goals. But as you move higher up the chain, you will find decisions being made at a more strategic level.

The graphic below shows a common governance structure.


Project portfolio management - governance
Project portfolio management - governance


You'll notice that there are several places where decision-makers have influence over projects and portfolios.

Project Governance

The project management office (PMO) manages project-level governance. This team (or individuals) manages day-to-day work of projects within the portfolio.

Corporate Governance

At the top levels of the organizational structure (or governance structure, depending on the size and complexity of the organization), is corporate governance. This is sometimes a board of governors or team of senior leaders.

If you do not include senior leadership on communication that they should receive, there will most likely be negative consequences. At best, they will feel slighted at being left out. At worst, you lose support from them. Suddenly, you will find items are not approved; the entire portfolio might even be put in jeopardy.

Sponsors

Sponsors of the portfolio may not have decision-making powers, but they are influential. A sponsor (or sponsorship group), can allocate/get funding, smooth political hurdles, and act as champions of the portfolio. Sponsors are the face of the portfolio to others in the organization. While some organizations don't put decision-making power in the hands of sponsors, they are still a group that you need to communicate with. Like upper management/corporate governance members, they can feel slighted if left in the dark over key decisions.

At worst, they will no longer support the portfolio, or might even work to undermine it. Those political hurdles cleared earlier now become major roadblocks. Do NOT leave sponsors out of communications.

Others

You may have to work with individuals outside of the governance structure who wield significant political power/influence over the organization and its decisions.

Sometimes decisions are made by leaders who do not have full knowledge of the portfolio.

Importance of Approvals

Typically you do not have to get corporate-level approval for day-to-day operations. But for larger portfolio decisions (and high-impact project decisions), you will want to make sure that you have approval from ALL the right groups.

Take another look at the governance model. Consider that you have gained approval from the PMO for an adjustment to a portfolio's timeline. But you did not have endorsement from project sponsors. Without approval from the proper channels, the portfolio can be at risk.

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