DTU ProjectLab - User contributions [en-gb]

Talk:Portfolio Management in a Startup

2015-09-28T23:01:24Z

S141586: /* Thanks for the feedback */ new section

Josef: Thank you, I like the idea for your article. I feel that for your article, you can either follow the "case study" or the "method" structure (as you could frame it from either perspective). Make it clear what is the particular challenge of startups. Also, some people may disagree that startups have a broad portfolio, instead one could argue that they typically focus on a single idea. So just state/explain what "type" of startup you are considering.
=Feedback=
==Reviewer 1, s121408==
This review is done to the article accessed: 12:56 22/09/2015

Formal:
* I have found a chaotic position of plots and not proper size, but I have the impression you are still working on that.
* The size of the article is only 1300 words
*It is important to write the references.
*Punctuation mistakes: “failure, But”, B should not be capital letter.
Content:
* I see many interesting features of the article, but I miss some connexion, for instance I watched a video of Steve Jobs but no explanations of why it was there or your interpretation about what he said.
*There are chapters such as Project/Program Prioritisation and SCRUM in Product Development Startups which are not explained.
*I wonder how the selection and order of the topics is done. They are all very interesting but I do not see a clear link or flow in the article to jump from one topic to another.
*The chapter “Effects of not having a Portfolio Management strategy” is not targeted to Startups. Do not know if you want to leave like it as something general or to explain it from a Startup perspective with some examples or explanations
* It is very interesting to include the organization but there is no mention of portfolio management in organization even though the main topic is Portfolio Management in a Startup.
* I would include a bit more topics and concepts from the slides given in class.

==REVIEWER 2 - Jejenji==

*The topic is interesting because it describes actual issues that occur in Star-ups. In few years we could be managers of those start-ups so it’s directly correlated to “our future”.
*I find the intro a bit unclear and too general. From my point of view you should take into account all the paragraphs. The intro it’s a sort of sum up of the whole content.
*You should avoid the usage of suspension points in an academic article.
*To better underline definitions you could use italic
*Very clear and useful the part of organisational structure
*Steve Jobs speech is really interesting. Perhaps you should include a written part regarding the video otherwise it seems a bit disconnected.
*Absence of reference within the text
*Some paragraphs are still missing and getting the overall message is a bit hard
*Some figures aren’t explained. You should include an explanation of them, to have a better flow of your article.
*I can see into the brackets some comments about adding examples. That’s totally useful to improve the article.
*The paragraph “effects of not having a portfolio management strategy” seems a bit opposite of what you stated at the beginning such as it’s important to have PPM.

FORMAL ASPECTS
*It’s hard to say if the article follows the method structure. It’s partly unfinished. Overall I would say that the written parts are relevant to describe the Portfolio Management.
*Few grammar errors.
*Figures headings should be included in the text. Perhaps adding extra description of them within the text would be great.
*Formatted properly.
*Absence of conclusion

CONTENT ASPECTS
*It does relate to PPPM
*The length of the article is shorter than the expected 3000 words.
*The flow is a bit poor but it’s because some paragraphs are still missing.
*Reference materials are ok but they are not insert in the text.
*Absence of annotated bibliography
*To improve you article you should add examples and extra explanation. Through this personalisations your article will be easier to understand and more interesting.

==Reviewer 3, S150931==

*General suggestions

**Very interesting topic
**Interesting use of “Background” to position the reader
**High potential work in progress
**Should not use “…” seems informal (unless it is intentional at this fase to show that more development is being prepared)
**Could be better organized (text, figures and video)

*Formal aspects:

**I believe it is not a study case
**video is not linked to the text and has no explanation
**The article can benefit from a better structure between topics, text and figures/video, instead of long paragraphs

*Content aspects:

**The article is still a work in progress, for this reason the length is not appropriate
**The sources lack summaries
**Not copy paste

== Thanks for the feedback ==

Thank you all 3 for the feedback, it has been very useful. As you could notice, when you did the review I was still working on my article. I needed to find interesting papers and read them carefully to talk about something that I find very interesting, but I didn't know by forehand. When reading your reviews, it helped me to focus more my article and pay more attention to the details. I corrected all the formal mistakes that you commented, and I have tried to improve the content in the guidelines that you exposed, but of course, it is a very wide topic and with the amount of information available I could write a book. Finally, I decided to focus on some aspects of the project portfolio management in a Startup, also because I reached 3000 words and I could keep writing, but I had to stop at some point.
I have written this article always from the point of view of a Startup, but of course, the methodologies that I have used can be applied in many different contexts and organisations. At the end, is just a little compendium of good practices for startups that want to design their tailor-made PPM, but this article can help them to see a picture of "where to start from". I hope you enjoyed the reading and I invite you to send me any comments or thoughts that you may have. Again, thank you for your review.

Best,

Lluís Sala

Portfolio Management in a Startup

2015-09-28T22:52:23Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market? <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved. <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project. <ref name="PDAD">''Product Design and Development'', Ulrich, Karl, 2012</ref>

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'')<ref name="PMI">PMI Executive Guide to Project Management http://www.pmi.org/~/media/PDF/Publications/PMIEXEC06.ashx</ref> defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed<ref name="Prio">''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012</ref>
. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka<ref name="SCRUM">''The New New Product Development Game'', Takeuchi and Nonaka, 1986 https://hbr.org/1986/01/the-new-new-product-development-game</ref>
, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products. <ref name="PPM MAN">'EPMC, Inc.; Michael J. Stratton; Mark Wybraniec; Sarma Tekumalla; Mark Stabler; San Retna; Diane D. Miller; Michael Gosnear; Stephen Jenner; Michael Mee; Michael M. Menke (2009). ''Project Portfolio Management: A View from the Management Trenches''. Wiley.</ref>

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”
==References==

<references />

==Annotated Bibliography==

'''''The New New Product Development Game''''', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
'''''Porftolio Management for New Products''''', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
'''''Product Design and Development''''', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
'''''Project prioritization: A structured approach to working on what matters most''''', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison. 
'''''The standard for portfolio management''''', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:46:55Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market? <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved. <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'')<ref name="PMI">PMI Executive Guide to Project Management http://www.pmi.org/~/media/PDF/Publications/PMIEXEC06.ashx</ref> defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka<ref name="PMI">''The New New Product Development Game'', Takeuchi and Nonaka, 1986 https://hbr.org/1986/01/the-new-new-product-development-game</ref>
, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”
==References==

<ref name="PMI">''The New New Product Development Game'', Takeuchi and Nonaka, 1986</ref>

https://hbr.org/1986/01/the-new-new-product-development-game
EPMC, Inc.; Michael J. Stratton; Mark Wybraniec; Sarma Tekumalla; Mark Stabler; San Retna; Diane D. Miller; Michael Gosnear; Stephen Jenner; Michael Mee; Michael M. Menke (2009). Project Portfolio Management: A View from the Management Trenches. Wiley.
<references />

==Annotated Bibliography==

'''''The New New Product Development Game''''', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
'''''Porftolio Management for New Products''''', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
'''''Product Design and Development''''', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
'''''Project prioritization: A structured approach to working on what matters most''''', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison. 
'''''The standard for portfolio management''''', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:45:24Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market? <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved. <ref name="PPM Leading">Rajegopal, Shan; Philip McGuin; James Waller (2007). ''Project Portfolio Management: Leading the Corporate Vision''</ref>

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'')<ref name="PMI">PMI Executive Guide to Project Management http://www.pmi.org/~/media/PDF/Publications/PMIEXEC06.ashx</ref>
defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka<ref name="PMI">''The New New Product Development Game'', Takeuchi and Nonaka, 1986 https://hbr.org/1986/01/the-new-new-product-development-game</ref>
, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”
==References==

<ref name="PMI"><ref name="PMI">''The New New Product Development Game'', Takeuchi and Nonaka, 1986</ref>

https://hbr.org/1986/01/the-new-new-product-development-game
EPMC, Inc.; Michael J. Stratton; Mark Wybraniec; Sarma Tekumalla; Mark Stabler; San Retna; Diane D. Miller; Michael Gosnear; Stephen Jenner; Michael Mee; Michael M. Menke (2009). Project Portfolio Management: A View from the Management Trenches. Wiley.
<references />

==Annotated Bibliography==

'''''The New New Product Development Game''''', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
'''''Porftolio Management for New Products''''', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
'''''Product Design and Development''''', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
'''''Project prioritization: A structured approach to working on what matters most''''', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison. 
'''''The standard for portfolio management''''', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:12:44Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the '''Startup’s strategy'''.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'') defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''” <ref name="prince"> Office Of Government Commerce, 2009 “Managing Successful Projects with PRINCE2™ ”, pp. 150 – 240. </ref>

==References==

<references />

==Annotated Bibliography==

'''''The New New Product Development Game''''', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
'''''Porftolio Management for New Products''''', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
'''''Product Design and Development''''', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
'''''Project prioritization: A structured approach to working on what matters most''''', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
'''''The standard for portfolio management''''', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:09:34Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the '''Startup’s strategy'''.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'') defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”

==Annotated Bibliography==

'''''The New New Product Development Game''''', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
'''''Porftolio Management for New Products''''', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
'''''Product Design and Development''''', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
'''''Project prioritization: A structured approach to working on what matters most''''', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
'''''The standard for portfolio management''''', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:06:26Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the '''Startup’s strategy'''.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'') defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T22:05:23Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the '''Startup’s strategy'''.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those '''focused on Product Development with a wide product/project portfolio'''. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): ''the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc.'' In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to ''Product Development Institute'', which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (''PMBOK from Project Management Institute'') defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Figure 5 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM Method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “''Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.''”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovat

Portfolio Management in a Startup

2015-09-28T22:00:30Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

*To '''maximize revenues'''; to maximize R&D productivity performance; to achieve financial goals.
*To '''keep competitive advantage''' - to increase sales and expand markets.
*To '''allocate scarce resources optimally'''.
*To create the connection between '''project selection and business strategy''': the portfolio is the articulation of the strategy; it must support the strategy.
*To '''achieve focus''' - Wise use of resources for the projects that really matters.
*To '''achieve balance''' - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
*To better '''communicate priorities''' within the organisation, (vertically and horizontally).
*To '''become objective''' when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
*Helps '''prioritise complex problems''' with multiple criteria to establish importance’s degree
*Creates a '''method for evaluating''' options
*Makes the process '''objective'''
*'''Quantifies''' the decision with numeric rankings
*Is '''adaptable''' for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
''Product Design and Development'', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
''The standard for portfolio management'', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:56:15Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach, presented by Takeuchi and Nonaka, which are considered the founders of the [SCRUM method], change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
''Product Design and Development'', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
''The standard for portfolio management'', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:53:24Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]]
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
''Product Design and Development'', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
''The standard for portfolio management'', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:52:27Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called [https://en.wikipedia.org/wiki/Resource_leveling resource leveling]. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|300px|thumb|Figure 6: Short and long-term effects of no PPM]] 
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
''Product Design and Development'', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
''The standard for portfolio management'', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:48:56Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
[[Management of Project Change]]:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
[[Risk management]]: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called [[Responsibility Assignment Matrix (RACI Matrix)]]. Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the [[Communication Management]] needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs. 
[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]] 
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

''The New New Product Development Game'', Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
''Porftolio Management for New Products'', Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
''Product Design and Development'', Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
''Project prioritization: A structured approach to working on what matters most'', C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
''The standard for portfolio management'', PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:13:09Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|center|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]] 
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:11:57Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]]

==Pipeline Management==
Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.
Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.
These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]] 

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]] 
As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:03:17Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company. A sum-up table showing the effects of not having a PPM is shown in figure 6.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:02:01Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]]

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T21:01:06Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|500px|thumb|center|Figure 4: Prioritisation matrix example]] 

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:54:57Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed. An example of a prioritisation matrix with a 2-project assessment based on different quantitative criteria is being shown in figure 4. 
[[File:priorimatrix.png|600px|thumb|center|Figure 4 : Prioritisation matrix example]] 

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:52:03Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:51:27Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are: 
Pipeline Management: It is the ability to align the process of deciding which projects have to be conducted according to the organisation's strategy. 
Resource Management: It focus on allocate the different set of resources in the most efficient and effective way. 
Change Control:The capture and prioritisation of change requests matching them with the available resources.
Financial Management: The financial department can estimate and manage the financial resources for a set of projects to align it with the different objectives and priorities of the organisation. 
Risk Management: As it names indicates, it focuses on evaluating the different threats (economical, quality, time) to minimise their impact on the overall strategy. 

In this essay, a focus on Resource, Pipeline and Governance Management will be done.

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|center|Figure 3: Roles facilitating self-organizing teams]] 

==Pipeline Management==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:41:47Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|Figure 3: Roles facilitating self-organizing teams]] 

==Project/Program Prioritisation==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:41:18Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|600px|thumb|left|Figure 3: Roles facilitating self-organizing teams]] 

==Project/Program Prioritisation==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 5 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 5: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:38:21Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). Figure 3 shows a definition table of the RACI matrix . This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.
[[File:RACI.png|300px|thumb|Figure 3: Roles facilitating self-organizing teams]]

==Project/Program Prioritisation==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 6: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

File:Priorimatrix.png

2015-09-28T20:35:27Z

S141586:

File:RACI.png

2015-09-28T20:35:08Z

S141586:

Portfolio Management in a Startup

2015-09-28T20:29:40Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

==Resource Management==

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

==Project/Program Prioritisation==

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

==Governance==

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:28:14Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context. 

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

===Resource Management===

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

===Project/Program Prioritisation===

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

===Governance===

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:25:02Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|500}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

===Resource Management===

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

===Project/Program Prioritisation===

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritising. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritisation matrix supports structured decision-making in the following ways:
1. Helps prioritise complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

===Governance===

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organisational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework. 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T20:21:57Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|450}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

===Resource Management===

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

===Project/Program Prioritisation===

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritizing. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritization matrix supports structured decision-making in the following ways:
1. Helps prioritize complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

===Governance===

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organizational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|center|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|center|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this essay, the author has tried to show the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic adaptation to market changes, but their success is strongly related on how they perform their development processes. As the British writer Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.”

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework.
 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field.

Portfolio Management in a Startup

2015-09-28T11:26:08Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb||Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|450}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

===Resource Management===

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

===Project/Program Prioritisation===

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritizing. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritization matrix supports structured decision-making in the following ways:
1. Helps prioritize complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

===Governance===

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organizational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|center|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|center|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this article, the author has tried to show just the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic

Big companies have all these processes in place. The ones they don’t tend to have are processes appropriate for strategic discoveries. The advantage of the startup ecosystem is that it brings together people with diverse skills and perspectives and allows the good ideas that result from their interchange to gain traction, without hierarchies of decision-makers to quash them. Corporate processes not only neglect but often prevent such breakthroughs.
https://hbr.org/2014/06/the-innovation-strategy-big-companies-should-pursue/

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework.
 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field. 

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Canviar titol article: Project Portfolio Management in a Startup (Good practices)

Portfolio Management in a Startup

2015-09-28T11:23:59Z

S141586:

Startups focused on Product Development, which have a relatively wide product/project portfolio, need to deal with scarce resources allocation. This issue is not trivial, as the lack of resources can lead to bottlenecks in the development phases, which are crucial for the survival of the Startup. Furthermore, this set of resources needs to be organised and merged with the processes involved on each stage of the development procedure in order to fit the Startup’s strategy.
This article aims to make a selection of the organisational structures, agile methods an tools that best suit early stage Startups, especially those focused on Product Development with a wide product/project portfolio. This article is intended to give a general framework for Project Portfolio Management (PPM) definition, distinctively for SME (Small-Medium Enterprise) Startups, consisting in one or several teams of people (from around 4 to 20-25 employees) working on the development of several products within an organisation. Notice that the author has made a selection of tools and methodologies based on theoretical and practical inspiration, meaning that the criteria for choosing these framework is based on academic papers, real case studies and personal experience. It is not in any case a universal “ultimate guide”, but a set of good practices to follow when designing and implementing a PPM system in a Startup. It is left for the readers’ criteria to evaluate the suitability of each tool, model or method in their own context.

==Background==
A Startup can be seen as a business venture conceived to grow rapidly.
In Product Development Startups, this potential growth is strongly related to speed-to-market, where the Product Development process is the Startup’s Achilles heel to accomplish this objective: It needs to be as smooth as a Swiss watch. But what has Project Portfolio Management (PPM) to do with speed-to-market?

Project Portfolio Management is (by definition): the art and science of making decisions to manage a set of projects and/or programs to obtain the maximal efficiency and effectiveness in the use of their available resources, scheduling, deadlines, budget, quality requirements… to best achieve organisation’s operational and financial goals, while struggling with external factors like customer changing requirements, new regulations, etc. In other words, without a proper Project Portfolio Management, which should orchestrate the resources in the most optimal way, speed-to-market cannot be achieved.

There is not any “golden rule” for implementing the perfect Project Portfolio Management in any company. Every company is different: Different structure, different people, different teams, different strategies, etc. Therefore, it is a craftsman’s work to analyse all the different parameters and stakeholders related to it in order to design the most optimal system, that is, the one which best fits the company’s goals. Many tools and methodologies are available to help the manager to accomplish this goal, however, he/she has to be aware that is not an immovable design, it needs to be flexible and adaptive to changes, thus, dynamic, alive, constantly improved.

==Organisational Structure==
[[File:project-based-org.png|300px|thumb|left|Figure 1: Project Based Organisational Structure]] Historically, startups organisational structure has been dominated by a Project Oriented structure (Figure 1), where the CEO can be seen as the Project Manager. As product portfolio grows, CEOs need to delegate the management of the different projects to others, that is, Project Managers. This form of organisational structure is the most suitable for Startups as the resource allocation trade-off is more agile and result-oriented than functional oriented structures. In contrast, its major weakness is that the lack of Functional Management can stagnate the organisation's capabilities in terms of specialisation and gain of expertise throughout the organisation; therefore, managers should strive to clarify the contribution of each project to the overall organisation’s strategy and try to create mechanisms to spread the knowledge in all directions.

 [[File:structure.png|300px|thumb|Figure 2: Organisational structure of a Startup developing Electromechanical products]]
In figure 2, an example of the organisational structure for a Startup purely focused on developing (not too complex) electromechanical products is being shown. Six employees and the Team Leader form the core team, the Startup in itself. The Team Leader is the one responsible to allocate the different resources according to the different projects being developed. The grey area refers to outsourced departments and suppliers. Each of the employees is connected to one or several external consultants in order to expand their domain of knowledge for a specific project.

This kind of structure has been adopted and adapted by large firms like Apple Corp., as it allows an increased flexibility of the use of resources, but also because it allows collaboration and an enhancement of cross-communication between teams, which it opens the door to innovation in the product portfolio of the company. An interesting example can be the organisational structure of Apple, as its former CEO (Steve Jobs) explains in the next video.
 {{#ev:youtube|https://www.youtube.com/watch?v=f60dheI4ARg|450}}

==Project Portfolio Management==
The Project Portfolio Management tools and methodologies allow managers to establish a set of processes that best ensure the optimisation of the capabilities and resources of the organisation. It provides a framework for risk mitigation, problem resolution, as well as a centralised point of view to plan and schedule resources, identifying the most suitable for each project/program.

But why is it portfolio management so important? According to Product Development Institute, which developed a study among Product Development’s industry to assess the perspectives of the different stakeholders involved, considered these 8 main reasons:

1. To maximize revenues; to maximize R&D productivity performance; to achieve financial goals.
2. To keep competitive advantages - to increase sales and expand markets.
3. To allocate scarce resources optimally.
4. To create the connection between project selection and business strategy: the portfolio is the articulation of the strategy; it must support the strategy.
5. To achieve focus - Wise use of resources for the projects that really matters.
6. To achieve balance - between long and short-term projects, high and low risk ones, in accordance with business’s goals.
7. To better communicate priorities within the organization, (vertically and horizontally).
8. To become objective when selecting projects.

These statements are equally applicable for big corporations, SMEs and Startups, as the overall goal is the same.

Some of the focus areas for PPM methodologies, techniques and tools that can be helpful in the Startup’s environment are:

===Resource Management===

Even that Startups' organisation is (by genetics) very flexible and adaptable to changes, a common issue in different types of Startups is certainly the lack of resources: human resources, financial resources, lack of material/equipment and/or knowledge. If not properly managed, it can jeopardise the success of any Startup in an early stage. It is therefore necessary, that CEOs handle this issue from a managerial perspective, in order to enhance effective and efficient organisational processes, which will consequently lead to more effective and efficient business processes. Portfolio Management ensures that the interrelations between all programs and/or projects are identified and the resources are being allocated in accordance of organisation’s strategy.

A good practice to start developing a Project Portfolio Management is to develop a resource matrix to identify all set of resources that the organisation possesses and organise them depending on different attributes (quantity, description, value, capability, competitive advantage, relations…). Thus, potential weaknesses can be identified and solved (or mitigated) by forehand and the decision-making processes for allocating those in the different projects can be done easily based on quantifiable measurements. In addition to project-level resource allocation, manager can also create “what-if” resource scenarios, and extend this view across the portfolio in order to dimension the overall amount and type of resources.

There are several methodologies intended to help managers to allocate resources and keep track of the development of the different tasks concerning a project. The Project Management Body of Knowledge guide (PMBOK from Project Management Institute) defines a technique called resource leveling. This methodology is intended to resolve disagreements when allocating different resources on simultaneous projects where resources are scarce and overlap. This can be done using different software tools to help Managers accomplish the best ratio of allocation (maximum utilisation of resources with minimum waiting times and over costs).

Another popular tool to manage resources, focused on employees’ allocation, is the so-called Responsibility Assignment Matrix (RAM), also known as RACI (Responsible, Accountable, Consulted and Informed). This matrix helps both managers and team members to clarify their role for a specific project by visualising the roles relationships. However, the Communication Management needs to be stated by forehand, so all the channels are specified and employees have a system to communicate internally and among other levels of the organisation.

===Project/Program Prioritisation===

Another critical aspect for the accomplishment of the strategic goals for a Startup is to be able to choose which projects/programs are most beneficial for the company. PMBOK recommends a methodology called Prioritization Matrixes for prioritizing. These matrixes offer a way to classify by importance a set of different problems, which can be used for assessing projects to find the aggregated benefits.

A prioritization matrix supports structured decision-making in the following ways:
1. Helps prioritize complex problems with multiple criteria to establish importance’s degree
2. Creates a method for evaluating options
3. Makes the process objective
4. Quantifies the decision with numeric rankings
5. Is adaptable for many priority-setting needs (projects, services, personal, etc.)

By developing this matrix, managers can objectively assess the importance of a project related to the overall strategy of the portfolio. For that, they need to establish the appropriate criteria from different perspectives: Economical, quality, resources, potential market, advertisement, etc. are just some examples of the qualities that a project must accomplish to be attractive in terms of common goal achievement. Nevertheless, the interdependency between them and the strategy needs to be properly assessed.

===Governance===

A well-defined and impeccably implemented governance strategy is crucial for an organisation managing a wide portfolio of projects, programs and products in order to guide the execution of the portfolio into success, that is, the business’ strategy of the company. It is not less important in the case of a Startup. Even that in early stage Startups the non-definition of the processes, the mix of roles, reuse of resources, lack of documentation, etc., may seem a bit blurry from employees’ point of view, a Startup that does not have a governance strategy it is condemned to failure, but not having a governance strategy can also be a governance strategy, that is the case of self-organising project teams.

Self-organising teams, also known as agile teams, are a methodology for creating autonomous development teams with high performance. This is achieved by giving the team the responsibility of its own organisation and internal processes, but under a common organisational framework. The team members’ roles are distributed in 5 positions. Table 1 shows the different roles, descriptions and interactions. It is especially useful in Startups, as the limited number of employees does not allow in most cases, to have dedicated project managers for all its projects.

These kind of organizational processes are strongly related to the product development processes. While traditional development phases were handled as lineal phases (creating a big dependency between the different stages of the development), this new approach (presented by Takeuchi and Nonaka), change the way these phases relate. Figure 3 shows the difference between the traditional sequential approach (A), the overlapped in the borders approach (B) and the extended overlapped approach (C). This new methodology allows companies to develop new products faster and in a more flexible way. It also enhances new kinds of learning and thinking across the organisation.

[[File:exhibit.png|450px|thumb|center|Figure 3: Types of development phases]]

That is why Startups have so much to win and so little to lose: The dynamics and synergies created among the team is an ecosystem very difficult to replicate in a big corporation, as the organisational rules are usually strict and immovable. There are several examples where this form of organisation was successfully implemented in big corporations (Honda, Canon, Toyota, 3M, etc.), boosting their development efficiency and effectiveness.

Even that the individual capabilities of the group members are very important for the overall success, it is critical that the team acts as a whole, sharing knowledge, ideas, points of view… in order to fertilize the field for innovation, but also to grease and adjust the wheels of the development phases into its optimal, that is, synchronise their processes to achieve a trade-off between shortest development time, highest quality and minimal development costs.

==Effects of not having a Portfolio Management strategy==

As stated before, a good Portfolio Management strategy needs to be aligned with the overall business’ strategy of the company in order to increase the percentage of successful projects, programs and portfolios within the organisation’s goals, but what happens when this strategy it is not well selected, planned and/or executed?

Project managers and functional managers fight for the use of resources. This is an obvious outcome for a bad Portfolio Management, especially for Start-ups with low resources. In a scenario with several projects and programs going on, the lack of a higher overview (an entity who works to establish a mechanism to allocate the resources when needed according to the prioritisation of the different projects), can lead to a disastrous management of the available resources, creating disputes between the different managers and stagnating the development of vital projects. Furthermore, this competition for resources among employees leads to a bad working environment, demotivating employees and decreasing the overall performance. This constant lack of resources has another influence on the projects, that is, the lack of quality on final products.

The prioritisation of projects is changing frequently. Since there is not any overall roadmap on which projects are most vital for organisation’s strategy, resources are constantly reassigned, minimising its utilisation and performance and increasing the turnover of the employees and the systems used for developing the different projects. This leads to increasing development costs, which are difficult to justify to stakeholders.

As a confluence of the previous statements, the organisation does not achieve the desired performance, quality, deadline and/or budget; it will (without question) affect the business’ strategy and therefore, will constrain the economical development of the company.

[[File:noppm.gif|400px|thumb|center|Figure 4: Short and long-term effects of no PPM]]

==Conclusions==

There are infinite methodologies, techniques and tools designed to help managers to create a good Project Portfolio Management system. Each one of them can be used in different scenarios, but the selection of the most suitable techniques needs to be done wisely. In this article, the author has tried to show just the tip of the iceberg in terms of organisational procedures for Startups. In today’s fast and fierce competitive landscape, Startups have the advantage that its ecosystem allows a more dynamic

Big companies have all these processes in place. The ones they don’t tend to have are processes appropriate for strategic discoveries. The advantage of the startup ecosystem is that it brings together people with diverse skills and perspectives and allows the good ideas that result from their interchange to gain traction, without hierarchies of decision-makers to quash them. Corporate processes not only neglect but often prevent such breakthroughs.
https://hbr.org/2014/06/the-innovation-strategy-big-companies-should-pursue/

==References==

The New New Product Development Game, Takeuchi and Nonaka, 1986: In this article, the authors discuss that speed and flexibility in product development has to be emphasised. It is considered to be one of the basis the new stress that in speed and flexibility during the development of new products. This article is considered to be the one of the origins of the Scrum development framework.
 
Porftolio Management for New Products, Cooper, Edgett & Kleinschmidt, 2002: This paper is an academic study on best practices used in Portfolio Management in 30 leading companies in the field of product development. The author, Dr. Robert G. Cooper is a recognized and influential researcher on business innovation. 
Product Design and Development, Ulrich, Karl, 2012: This book mixes different perspectives on product development (marketing, design and manufacturing) to show the current state of the art on product development processes in an organisational context. 
Project prioritization: A structured approach to working on what matters most: C. Gosenheimer, 2012: It is a guide describing the approach to develop a prioritization matrix to evaluate decisions related to selection of project. It is written by the division of Enrolment Management from the University of Wisconsin-Madison.
The standard for portfolio management, PMI, 2008: It is a compendium of the best practices carried away by a large number of certificated Project Managers around the world. The Project Management Institute (PMI) is the world’s leading professional organisation of Project, Program and Portfolio Managers. It works to develop standards and provide accreditation in the Project Management field. 

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Contestar reviews
Canviar titol article: Project Portfolio Management in a Startup (Good practices)

Talk:Theory of Constraints

2015-09-22T21:43:03Z

S141586: /* Reviewer 2: s141586 */ new section

== Review given by StephSalling, review1 ==
The TOC method is very interesting and you are explaining it in a good and simple way. It is really a shame that the last sections are missing.

==== Formal aspects ====
* The “method” structure is being followed very well (apart from the last parts not existing yet).
* Grammar, spelling and punctuation – very good!
* Sentences are short and precise, which make the article easy and engaging to read.
* Adding some illustrations would improve the reading experience.
* The use of different bullet point styles is good. It could be a good idea to link to some other wiki-pages.

==== Content aspects ====
* I would say that the article is very interesting for a practitioner.
* The topic of the article is clear and specific.
* It seems that there is (going to be) a logical flow through the article, but it is of course hard to say when only half of it is written.
* The starting summary of the “big idea” is sufficient and not too long.
* It looks like you have attempted to put in references but not succeeded (yet), which makes it hard to judge the sources and objectivity of the article (although it seems very objective).
* It could maybe be beneficial to link the article to other pages in the APPPM wiki (such as pages with the topic of LEAN?)

== Reviewer 2: s141586 ==

It is an interesting topic and it has a good flow, but it needs some improvement. 

Formal: 
• It is a method definition. 
• The use of English is correct. 
• The style of the article is short and concise; maybe too much, some extra explanation of the theory would be helpful. 
• It lacks figures. Some figures would help to make it more comprehensive. 
• The article is well formatted, but it is still in progress. 
• Missing references. 

Content: 
• It is an interesting topic for a practitioner.
It is difficult to understand if this theory is applied in Project Management, Program, Portfolio or everywhere. Where is it used? What are its benefits? Can it be applied to software development, for instance? 
• The length of the article is under the standard of 3000 words, but it seems that the article is still in progress. 
• In general it has a good focus and flow, however it needs more development and a deeper insight. 
• It seems that the main reference is Wikipedia, maybe would be a good idea to find some academic papers about the topic so you can find different approaches or ways of explaining, and also some clarifying figures. 
• Lacks annotated bibliography. 
• It is not linked to other APPPM articles. 
• There is not a subjective statement from the author; maybe a “discussion” section would be interesting.

Talk:Manage Extreme Projects with Rapid Methodology

2015-09-22T20:34:21Z

S141586: /* Reviewer 3: s141586 */ new section

== Review given by StephSalling, review2 ==
==== Formal aspects ====
* The article follows the “method” structure very well.
* There are some grammatical, spelling and punctuation errors, maybe an extra proofreading would be a good idea (maybe by someone else, it is often helpful having a second pair of eyes read it through).
* The article is written in an engaging style in terms of content, but some sentences are a bit long and hard to follow.
* The figure is very illustrative, but a reference to the source for it might be a good idea. More figures would improve the reading experience, but I do not know if it is possible to find other relevant figures.
* Very nice use of table and bullet points.

==== Content aspects ====
* I think the article is interesting for a practitioner.
* The topic is clear and specific.
* The length of the article seems appropriate.
* There is a red thread through the article, however, the transition from XPM to Rapid Methodology could be smoother.
* The starting summary is sufficient and not too long.
* Your sources seem good and of high quality. You could maybe elaborate some of them (the “annotated bibliography” part).
* The use of the word “we” in some sentences is a bit confusing for me as it mixes up your “own opinion” with statements substantiated by literature.

== Reviewer 3: s141586 ==

In general, very good article with an interesting topic and good flow, but needs improvement. 
Formal: 
• The article follows a clear “method” structure. 
• In general, too long sentences. I have detected many grammatical errors, needs proofreading. 
• The use of the form “we” it does not sounds very good in an academic article, I would rather use the passive form to express the same (Overview section) 
• Well-referenced and good use of quotes from authors. 
• Some more figures would be useful 
• Well formatted. Wiki references. 

Content: 
• It is a very interesting topic for a practitioner, but I have the feeling that some of the statements are being repeated in too many paragraphs (specially the ones defining the XPM). 
• The length seems to be ok, even that is around 2500 words. It has a good flow. 
• I miss a “limitations” paragraph, were you explain the weaknesses of the XPM or when to apply it. 
• In general, I think it is a good idea to find some examples of XPM projects, and explain a little about one or two cases. 
• I think it would be good to describe each of the sources with few lines, explaining about the paper and the author. 
• It is hard to distinguish between your opinion and the theory; maybe you should clarify it in the discussion section.

Talk:E. Pihl & Søn A/S from a management perspective

2015-09-22T17:55:10Z

S141586: /* Reviewer 1: s141586 */ new section

UserName:Jejenji - REVIEW 3

* Great intro to describe the whole picture
* The chapters regarding the history are a bit long. From my point of view it would be useful to make a table or describe the most important events through bullet points.
*Interesting to know which constructions they built in DK
*According to me it would be more important to highlight the MANAGEMENT part instead of the HISTORY. Maybe shorten a bit the history part and expand more the Management paragraph. It could be useful to consult more sources about these part and insert a little bit of theory.
*Detailed conclusion that underlines who took decisions
*Adding a sort of hierarchy picture of the company would help to understand how’s the power distributed
*It could be useful to divide the conclusions and implications in subchapter to analyse more into details each part (example: leadership,“enlightened despotism”…. )
*Nice point the “enlightened despotism”
FORMAL ASPECTS
*Overall the article follows the case study structure
*Grammar wise is correct
*Lack of figures and visual illustrations
*Formatted Properly
CONTENT ASPECTS
*The article is interesting
*It does relate to PPPM
*Appropriate length
*Logic flow between HISTORY _ MANAGEMENT _ CONCLUSION
*Reference materials are a bit poor
*Great annotated bibliography
*The historical part seems poorly re-elaborated
==Reviewer 2, s121408==
Formal:
*The grammar and flow of the article was correct from my point of view.
*Pictures are well allocated.
*It is well documented from bibliography from what I have seen.
Content:
*Good starting.
*I understand that to evaluate a case you need to present it. But I think there has been put so much effort in describing the history and situation of the firm (nearly half of the article), something that someone could just read in the book you referred or elsewhere.
*The flow of the article is very good, but I see the topic away from the concepts used in the course. I do not clearly see how the concepts explained in the slides are implemented in the article. There are some concepts of Project and Portfolio management in the article but it could be enlarged.
* I do not clearly see the personal contribution of the author. I have the impression there is a lot of paraphrase coming from literature but correct if I am wrong. I would recommend to talk with the professor, because the article is very illustrative but maybe he wants something else.

== Reviewer 1: s141586 ==

Formal: 
• It clearly has a case study structure. 
• It is well written. I couldn’t find gramatical errors, just a tipo: Too keep track of the progress -> To keep track of the progress 
• Who is Carl Bro? Carl’s Brother? 
• I think it would be good to see some figures representing the structure of the company in a visual way (organigram). 
• I think that you could add more figures describing the different topics you talk about, like a map of the projects carried away by the company, the flat organisational structure… 
• The article is very well formatted 

Content: 
• The length of the article is the appropriate. 
• I think that the topic is very interesting, however, from a practitioner’s point of view I can’t see a clear utility of the article, since it is mostly talking about the history of the company rather than purely managerial aspects. 
• For the first part of the article (History): It is a well-documented article about the history of the company, however It’s difficult for me to find a connection with the course curriculum, maybe is not necessary to explain the whole history of the company (who was the CEO, when,…) but try to focus, for instance, on the governance management strategy of the company. 
• Fort he second part (Management in E. Pihl & Søn A/S): It is very interesting to know about the type of leadership, organisation… but it would be nicer if you could relate it to the theory, maybe explaining why the flat organisational structure is good for motivation, or what do the manager-employees relationships have to do with team performance… try to find some papers that talk about some of the topics you have written about. 
• Following a logical thread, I would put Project management after Portfolio Management.

Portfolio Management in a Startup

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