Program Management Strategic Portfolio Management

Portfolio Selection: 6 ways to choose initiatives that deliver

9/09/2024

Choosing the right projects is crucial for any organization’s success. But with limited resources and a sea of potential initiatives, how do you decide which ones to pursue? That’s where portfolio selection methods come in. These frameworks help you evaluate and prioritize projects, ensuring they align with your strategic goals and deliver maximum value.

Here are 6 common portfolio selection methods:

1. The Pairwise Comparison

The Head-to-Head Battle

This method simplifies decision-making by pitting projects against each other in a systematic duel. You define your criteria (e.g., ROI, strategic alignment), compare each project pair based on those criteria, and choose a winner.

Best for: Smaller portfolios, situations where clear preferences exist, or when you need a straightforward approach for quick decisions.

2. The €100 Method

Democratizing Project Funding

Want to inject a dose of democracy into your project selection process? The €100 method empowers stakeholders by giving them a hypothetical budget to allocate across potential projects. The projects with the most “funding” at the end get the green light.

Best for: Engaging stakeholders, fostering a sense of ownership, and uncovering collective priorities.

3. Criteria & Scoring

The Weighted Decision Matrix

This versatile method brings structure and objectivity to your selection process. You define weighted criteria (e.g., ROI, strategic alignment, risk), assign scores to each project based on those criteria, and calculate a weighted score to determine the winners.

Best for: Comparing diverse projects with multiple factors to consider, providing a transparent and data-driven approach.

4. Value/Risk Matrix

Visualizing the Project Landscape

This classic tool maps projects on a matrix based on their potential value and associated risk. This visual representation helps you quickly identify “quick wins” (low risk, high value), high-potential opportunities (high risk, high value), and projects that might be too risky to pursue.

Best for: Getting a quick overview of your project landscape, facilitating strategic conversations about risk appetite, and identifying projects that require further analysis.

5. First Past the Post

Leveraging Expert Judgment

Sometimes, you need to tap into the wisdom of your most experienced team members. The First Past the Post method relies on Business Product Owners (BPOs) to rank projects based on their deep understanding of business priorities. Through open discussion and consensus-building, the most critical projects rise to the top.

Best for: Complex projects where domain expertise is crucial, situations where strategic alignment across different areas is essential.

6. WSJF (Weighted Shortest Job First)

Maximizing Value Delivery

This method prioritizes projects based on their economic value and estimated duration. Projects with high value and short completion times rank higher, allowing you to deliver value quickly and maximize your return on investment.

Best for: Agile environments, situations where speed-to-market is critical, or when you need to demonstrate tangible results quickly.

No More Project Paralysis

Choosing the Right Method

The best portfolio selection method isn’t one-size-fits-all. The key is to choose an approach that aligns with your specific needs and context. Consider factors like:

Portfolio size and complexity
Organizational culture and decision-making processes
Available data and expertise
Risk appetite and strategic goals

By understanding these methods and their strengths and weaknesses, you can confidently choose the right approach to build a project portfolio that fuels your strategic vision and sets you up for success.

Key takeaways

Navigating the complexities of project portfolio management can feel overwhelming, but it doesn’t have to be. At threon, we’re passionate about helping organizations like yours build strategic project portfolios that drive results. We understand that choosing the right projects is the crucial first step, and we’re experts in applying these portfolio selection methods to your unique context. Whether you need help defining your selection criteria, facilitating stakeholder workshops, or building a data-driven prioritization model, we’re here to guide you every step of the way.

Let’s discuss how we can help.