Step 2: What do you want to achieve?

Often portfolio managers move directly to identifying the projects, without first exploring and clarifying their values and objectives. This can lead to considering a subset of the possible projects and making unbalanced comparisons of alternative portfolios. A full set of objectives can help us think of new and better projects, looking beyond the immediately apparent choices.

Your objectives are what you hope to achieve by making this decision.  They capture what you really want, you really need, your hopes and your goals.  Objectives form the basis for evaluating the alternatives open to you: they are your decision criteria.

In order to calculate expected values for each project, we need to identify objectives that are measurable using either objective or subjective attribute scales. These measurable objectives may then be combined using weights up through the objective hierarchy to calculate an overall score for each project, which may then be summed up to calculate an overall score for each possible portfolio. Without objectives it would not be possible to tell which set of projects is the optimal choice.

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