An updated version of a paper first submitted by Trade Press Services, February 2008
© Don J. Wessels.
Published here May 2008.

Introduction | What is Wrong With This Picture? | Project Prioritizing
The Project Ranking Tool | Resource Allocation | Where Has Execution Gone Wrong?
What is Missing in the Total Product Cycle? | Whatever Happened to the Business Case? 
Close the Loop

Don J. Wessels, PMP, is a Senior Consultant with Management Concepts, Project Management Division, headquartered in Vienna, VA. Founded in 1973, Management Concepts remains a global provider of training, consulting and publications in leadership and management development. The company is a Registered Education Provider for the Project Management Institute (PMI). It is also endorsed as an education provider by the International Institute of Business Analysis (IIBA) and is one of the IIBA's corporate sponsors. For further information, visit or call 703.790.9595.


Between stockholders who demand higher share prices and government regulators who breathe down management's neck with compliance issues, organizations are stuck with too many projects and not enough resources. Adding to the project management dilemma are the urgent requests of diverse departments, each of which claims its problems and projects should take priority. So how can companies really get a handle on selecting the most critical projects for execution? The answer is project portfolio management, but not the way it is currently practiced in most organizations.

So, what is the problem? Many companies still do not practice project portfolio management at all. Sometimes old-fashioned power struggles still determine whose projects are implemented - the group or individual who has the most money, influence or status wins. Secondly, if multiple departments clamor for new computer systems, for instance, the one that provides the most money to IT or that has the "pushiest" people gets its project approved. Alternatively, the projects that address the biggest "hurt" are sometimes the ones that are funded and implemented most promptly, even if they do not align with corporate strategies.

Companies that do practice project portfolio management usually have five types of projects feeding the portfolio:

  1. Mandatory projects to comply with regulatory or legal requirements
  2. Strategic projects that are aligned with the organization's mission and vision
  3. Business unit projects (often IT projects) that are designed to make a business unit more efficient and effective, reduce costs, fine-tune operations or add functionality
  4. Reactive projects designed to correct serious problems and projects gone wrong. This category may also include such problems within business units.
  5. Pet projects. These may be projects sponsored by middle or, more likely, senior management because they would be "fun to do." Perhaps the CEO, CIO or a middle or upper manager has talked to a counterpart in another organization, heard a new buzz word and decided to launch a project to keep up with the Joneses. Pet projects can also be originated by IT or R&D and may get selected just because they would be "cool to work on."

While there is nothing inherently wrong with the first four types of projects, the problem is that most organizations prioritize them incorrectly. Information extracted from several presentations at the PMI Research Conference June of 2005 in Montreal[1] provides some insight to the typical mix of projects. The typical portfolio today contains 50 to 60 percent reactive projects, each of which implies that something has already gone wrong. Another 30 percent are projects that fine-tune specific business unit processes; another five percent are pet projects and the remaining five percent are strategic projects.


1. Project Management Research Conference, 2006, "New Directions in Project Management". The conference was held in Montreal, Canada, July 16-19, 2006.
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