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Step 1: What is the
problem?
 To make the best portfolio selections, you need to state your portfolio problems carefully, acknowledging their complexity and avoiding unwarranted assumptions and option-limiting prejudices. The way you state
your problem frames your
portfolio. It
determines the projects
you consider and the way
you evaluate them.
Posing the right
problem drives
everything else.
A good portfolio
selection for a
well-posed
portfolio problem
is almost always a
better choice than
an excellent
selection for a
poorly posed one.
For a portfolio
decision, often
the problem is a
good one, for
example choosing
the projects to
develop for the
next year.
However, deciding
on the framework
for the decision
is just as
critical.
Very often, the
set of projects
under
consideration are
simply those that
presented
themselves during
the previous
period, no active
effort is made to
identify new and
more attractive
alternatives. One
of the
difficulties and
reasons for this
is the problem of
getting agreement
on the scope of
the portfolio. It
is easier to say
which of the
current
alternatives
should be included
or not, it is more
difficult to
define the scope
with enough
clarity to allow
identifying new
projects.
Ideally, the
vision and
strategy of the
organization or
group would be
well defined prior
to beginning the
selection of a
portfolio of
projects. The
scope of the
portfolio should
naturally develop
from this vision
and strategy. If
they have not
being defined
prior to this
point, now is the
time to do it.
Defining a scope
that is tied to
your vision and
strategy will give
you a solid
foundation for
choosing your
portfolio.
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