Repeat these phrases for successful Portfolio Value Management
For the past few weeks I’ve grown fond of The Standard for Portfolio Management which reflects current portfolio management practices and has been recently updated to showcase the evolution of the profession.
I noted down a few phrases that are essential for developing a value realisation mindset. You might find that they are useful in most situations when the buy-in is all-important for achieving consensus. Do I sound like a manager already? Speak the following phrases and you will sound like a portfolio manager too!
- Value is contextual. It is only relevant when it is in context with the organisation’s value objectives.
2. Not all forms of value are universally relevant. Component investments in different contexts do not always contribute impact.
3. Every requirement needs one or more acceptance criteria. Acceptance criteria are not the same as completion criteria. The reported agreement of acceptance criteria provides the portfolio manager with an indication of component risk. If there are fundamental disagreements then there’s risk undermining the portfolio’s expected return.
4. Reporting value is unlikely to be entirely objective. Consistency and transparency are a matter of organisational politics. Hence, the need for governance framework principles.
5. Risk management and risk impact contibute to the final value of the portfolio. Value assurance is enacted by considering risk at all levels — both positive (opportunities) and negative (threats). It is easy to focus on maximising return, losing sight of the true requirement which is to return value.
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