“Portfolio Management Theory states that for any allocation of resources, an efficient set yields the greatest return for a given level of risk. While the right level of resources to allocate to projects cannot be known without considering further factors, what is clear is that once that level of investment is determined, then is there an optimal set of projects to implement for a given level of risk and investment?”

– Simon Moore

I hated sitting and waiting outside the board meeting. I was not privy to some of the other board business, and I was instructed to wait until I was called. I wanted to get it over with and move on with my day. I was extremely nervous. Maestro Fernando had not been much help with the budget. His attitude had been to just get it done. I felt like a failure in his presence – as if I had no clue what to do.

Sam made me feel better, but he was busy and not always available for questions. I probably would have quit if it weren't for Dr. Richard's help.

I looked at my watch again for the fifth time in ten minutes. My stomach gurgled. Did it mean I was hungry or anxious? Probably both.

The door finally opened, and Sam stepped out.

“Hey, Jerry. Thanks so much for waiting. We're breaking for lunch, so you can go pick up something. We're having our lunch brought in, so maybe come back in an hour, and we should be ready for you.”

An hour? I wasn't sure eating was the best idea until my nerves were better, but I supposed a snack would be okay.

An hour later, I entered the room, and Maestro Fernando was holding court as he talked about his tour with a small orchestra in Tuscany a couple of summers ago. He was very charismatic, so people put up with his tirades and ego. There was no doubt that he was one of the most sought‐after conductors in the world, but it didn't make me like him any better. It was one thing to see him at rehearsal for a few hours at a time, but now I had to endure his condemnation multiple times a week.

“Okay, everyone, Jerry is here. Let's get back to business,” said Sam.

Fernando held up one finger, indicating he wasn't finished talking. I checked my PowerPoint on the projector while he continued to talk about wine and food. It seemed like the women on the board wanted to sleep with him, and the men wanted to be him. I just wanted to get started and get out of there.

Everyone eventually took their seats. Some of their eyes were droopy after large meals and a couple of lunchtime cocktails.

I went through my presentation, and it seemed that I had their attention most of the time. Fernando looked at his watch and never touched the packet I had provided with the budgets for the year.

At the end, I opened it up for questions, praying no one would have any.

“I have a question about your increase in pay for the musicians,” said Dr. Ackerman. He had the largest, most successful eye care business in the area. “Do they really need that much more money?”

“What do you mean?” I was a little shocked.

“I mean, I know you all like playing, but is this really your job? It's more of a hobby. You know, a luxury. You can just write it off on your taxes.”

I took a couple of deep breaths. I was usually a very calm and humble man. I could diffuse potential conflicts like a pro and was known for my level head. None of that mattered at the moment, as the first words that were trying to push their way out of my mouth would surely get me fired.

Hobby? Was he kidding?

I looked at Fernando, who had a grin on his face. What did he care? He was on a salary, and it was my job to get the best players to play. He wanted butts in seats and wasn't concerned about the cost.

Sam looked like he had swallowed a rock and it was stuck halfway down. He had warned me that not all of the board members appreciated what the symphony did. To them, it was a social event, and a few of them had a habit of ducking out of concerts halfway or never even came to the concerts. They were more concerned with looking their best at the preconcert dinner hosted by Maestro Fernando.

It was up to me to convince the board that the musicians deserved a raise. I was on my own, and I was going to have to earn my spot.

“Dr. Ackerman, how long have you known you wanted to be a doctor?”

“Well, I guess late in high school. I didn't really pick a specialty until later in my education.”

“About how many hours a week does it take to prepare to go to the office or prepare for an eye surgery?”

“I don't know. I guess not many. I have been performing eye surgeries for years,” said Dr. Ackerman, a little defensive.

“So you would say the surgeries you perform are routine? How many years did it take to learn a Lasik procedure?”

“That's a specialized procedure. It took about six months of training.”

“Can you imagine having to learn a new procedure like that in about eight hours? Can you imagine having to learn a new one every few weeks?”

“Well, I …” Dr. Ackerman began.

“Can you imagine practicing your procedures four to five hours a day, every day?”

“That wouldn't …”

“I began playing the bass in the fifth grade. I began lessons in the sixth grade. I practiced thirty minutes to an hour every day through middle school. Once I got to high school, I was in three ensembles. Between rehearsals and practice, I was playing about thirty hours a week. That didn't count hauling my bass in my parents' old station wagon.”

Eyes around the table grew wide.

“I played in competitions and made it to the all‐county and then the all‐state orchestra. I was able to secure a scholarship to a music school. I was playing for hours every day, in addition to my regular classes and my music classes. I had three ensembles, a quartet, a masterclass, and individual lessons with my bass teacher. Once I graduated college, I played gigs every weekend, practiced every day, and had rehearsals four days a week. The cost of my instrument is $25,000. That doesn't take into account stands, a case, music, rosin, bow, and strings. The upkeep is in the thousands every year. So I want to ask you, Dr. Ackerman, does that sound like a hobby to you?”

Silence.

I was terrified. Where had that all bubbled up from? It was all true, but I was wielding that truth like a weapon. I looked around the room, and no one would meet my eyes except Maestro Fernando. He winked. I wasn't assured by his affirming look.

Dr. Ackerman scribbled some notes. He looked up.

“That was quite the speech.”

“I'm sor …” I began

“And you are right. Everyone around this table has a love for music, but we are professionals and business owners. I myself played some piano as a child, but I had no talent for it, and I hated practicing. When we attend your concerts, you make the music sound so effortless to play, but I suppose that is the point. When I walk into a room, people have confidence in what I do, and they pay for my experience. I understand where you're coming from. While I am in support of your raise, we now have to figure out how to give it to you.”

“I have created a projection over the next few years for a gradual increase. The good thing is we won't see an increase in the number of personnel, so those numbers are steady. I based them on the average number of concerts the last three years.”

“You have asked for a number of new items for the budget,” Dr. Ackerman continued. “I am not sure the board can approve all of them this year, but we could set some aside for the next few years. Can you send us a proposal of what you think are must‐haves along with a list of things that would be nice for the symphony to have?”

“I can do that,” I replied, making my own notes.

“Excellent job,” said Sam. His jovial smile returned to his face. “It would be nice to have that early next week, if possible.”

I left the meeting with mixed feelings. I was glad it was over, and it didn't go nearly as badly as my disaster fantasy had led me to believe. No one threw things at me or called me a fraud, so I could make a tick in the win box there.

Now I had to figure out how to make all these projects work. Dr. Richardson reminded me that I needed to take it one project at a time. I had all the groundwork done; now I had to put it in one concise report. Then the fun part would begin – putting all the pieces together and executing the plans.

* * *

“Well? Do you still have a job?” asked Laura before I barely got in the door.

“Yes, as a matter of fact, it went well,” I replied.

I was disheartened to see the disappointment on her face.

“Well, I hope you can manage your time. I still think it's a bad idea. You don't have time for us anymore.”

That was an untrue statement since I was taking the kids all around town after school, but I didn't want to argue.

I heard the scrapings of Corey practicing his bass. It was really hard for me not to run into the room and show him the proper posture and how to hold the bow, but he would be starting lessons next week. I preferred to have the teacher handle those things and to wait for Corey to ask me questions.

“Does that sound get better?” asked Laura.

“Yes, he just started. It takes time,” I said.

“Well, I don't think my nerves can handle it today, so I need to go out. Can you pick up Linda?”

“Where is she?”

“Where is she all the time? Sally's.”

“I don't think it is a good idea for her to be over there all the time,” I replied. Linda was becoming more independent, and while I appreciated her spending time with friends, her grades weren't fantastic.

“You get to tell her,” Laura replied.

I sat down at my computer to check my emails and noticed that my inbox was empty. That seemed odd, and so I looked in my spam folder. Just the usual outdated warranty notices. When I opened the trash folder, I was shocked. Emails for the past week were stacked there, all unseen and unanswered.

“Laura? Do you know what happened to my email?”

She entered my office with a strange look on her face. “What do you mean?”

“I mean that all my messages are in my trash file. Do you know anything about that?”

Her nostrils flared, and she crossed her arms. She remained mute.

“You do know something. …” Shock and horror filled my chest. “Did you do this?”

“Yes, yes okay … it was me,” spat Laura. “I was using the computer to create fliers for the upcoming volunteer banquet that I agreed to host this year. While I worked on it, I noticed all the emails that would of course grab your utmost attention. I … I don't know why, but since you won't listen to me about this job quest of yours, I figured if you didn't answer your emails, they would fire you and then you'd have to follow my advice.”

“Are you kidding me right now?” I was fuming.

“Jerry, you need to be here more. Why don't you just give lessons or teach at the school like other musicians? We need the money, but this is just crazy.”

“This is a good job, Laura. It could help me with skills that will help me grow as a businessperson. Trying to live on a gig income is hard. Today I had to convince a member of the board that being a musician wasn't a hobby. I don't make near what he does as a doctor, so I could see it from his perspective. I can always make money as a musician, but I have to fight for every penny. This position is good for me as I hone my skills in project management. I can open new doors to a new career.”

Laura's hands were on her hips now. “It's all about you. What about me and my needs?”

“I am listening … let me know what you need.” I genuinely wanted to provide Laura with what she wanted. It was important to me.

“Oh, just forget it,” she said as she turned back to the door. “You just don't understand.”

Before I could say anything further, she was gone.

I turned back to my computer and immediately changed all my passwords. I knew this argument wasn't over, but I had work to do. Thirty‐two emails weren't going to answer themselves.

* * *

The next day, Dr. Richardson and I sat at our usual table.

“I can't wait to hear Mahler's Fourth this weekend,” he said.

“Yeah, it's quite a bear, and Fernando is sweating and swearing more than usual.”

“You have quite the lineup for your final concert in a couple of weeks. Beethoven's Ninth with the choral society should be outstanding,” commented Dr. Richardson.

“If I make it that long. This project management can be overwhelming,” I admitted.

“Tell me about your board meeting. In your email, you said you thought it went well.”

I told him about the positive reception I had but downplayed my speech about it not being just a hobby. He sipped his coffee and nodded, never interrupting.

“I have to provide them an itemized list of projects we need to get done right away and those things that can wait,” I finished.

As usual, Dr. Richardson came prepared and handed me a small stack of papers.

“You had to rush to get your initial budget to the board; now I'd like to step back a little to make sure you understand portfolio management theory and what your role will be. I believe you'll feel a bit more at ease once you understand the process a bit more,” Dr. Richardson explained.

“Anything will help; I'm all ears and ready to take notes,” I replied.

“Great! Portfolio management theory is about identifying an optimal set of projects or work that is going to be undertaken, considering the limited resources and allocating those resources, and synchronizing the work so that no one is being a bottleneck with the activities that are going on and that you're also reducing the risk while at the same time maximizing the investment or the return investment that you're trying to accomplish.”

“That sounds complicated,” I admitted.

“Actually, you do this all the time when you go to the grocery store. You have a budget and know that you have to buy food for a week or two for your family. You know you can't go down the middle of the aisles and just get cookies and crackers and juice and things that are not going to give us the nutrition that our bodies need.”

“Tell that to my kids,” I chuckled.

“I bet. Because of your budget, you have to select the most efficient set or the right number of items that are going to give you the greatest return. You have to reduce the risk of eating too much sugar and all the things that can give you diabetes and other kinds of health difficulties. But at the same time, you want to purchase something that's going to give you the greatest return for the budget that you have.”

“I get what you're saying.”

“That is what project portfolio management and portfolio theory are all about. It's selecting that optimal set of projects, reducing risks, and maximizing your return. Your portfolio is a component collection of projects, programs, sub‐portfolios, and operational work that is managed as a group to achieve a strategic objective. You following me so far?”

“Yes, I had read some of that in the materials you gave me and the online course you suggested, but this has clarified it for me a lot.”

“Great, then let's talk about your role as the project manager. Portfolio management is a set of skills and/or capabilities that enables an organization, or a team within an organization, to analyze, select, and manage a collection of project investments that are aligned with the company's goals and objectives. And that's within a data‐driven decision‐making framework. And that's important because now you're making decisions based on data and not based on someone who screams the loudest or has bigger opinions or has a stronger walking stick. But it's based on data to make sure that the investments are all aligned to where the symphony is going.”

I thought about Dr. Ackerman and how badly I had handled my interaction with him. I wish I could have handled it from a position of understanding that I needed to demonstrate why increasing the symphony musician's salary would benefit the overall organization.

“Portfolio management coordinates the acceptance, approval, postponement, rejection, and/or cancellation of a project that will not realize the proposal benefits or the symphony's strategic outcomes.”

“Can you explain that a bit further?” I asked.

“It's a set of skills, and it's also a set of governance processes around allowing projects to start, to be put on hold, or to be terminated or canceled because they're not going to deliver what they promise. They want to know that what you're proposing is going to work in the way you say, or they might pull the plug on it. Organizations like the symphony are not in the habit of spending good money after bad. They seek to use their resources optimally.”

“So that's why they want me to prioritize the projects for this year and subsequent years. They need my help to tell them what is essential right now and what can wait a bit.”

“Exactly,” said Dr. Richardson. “Let me explain your role as the portfolio manager a little further. This is really important because you need to understand what the symphony board is expecting of you. You need to be oriented toward the symphony's strategic goals. It's not just about delivering a project on time and on budget. It's about accomplishing the symphony's strategic goals. You will be called upon to help out with metrics, not just the metrics that you're working on of scope, schedule, and cost, but also managing risk on a project and the symphony as well. In addition, you're being called upon to work with other staff in the symphony. They are managing a project or a part of a project, but as the portfolio manager, you'll be looking over all the projects.”

“That sounds like a lot of work and a huge responsibility,” I said. “Maybe my wife was right.”

“Nonsense. Once you have processes in place, it will be much easier to manage. You will then just have to make sure the projects are on track and report back to the board. You have to consider the organization's culture. Think about how the delivery of your portfolio is going to impact the organization's culture and whether everyone is positioned to absorb all of these changes that we're planning on rolling out. This is why I cautioned not to get too crazy with changes all at once. Introduce big change over time.”

“I'll definitely take your advice on that,” I replied.

“Finally, one of the greatest focuses for you as a portfolio manager is that you have to change your mindset and focus on creating value at the much larger level within the organization. It's not just about getting musicians in seats; it is about how you can help improve the symphony overall. Not just to please the board members but to impress the audience. I have seen more empty seats in the past couple of years in the audience, so you'll be in a prime position to help them turn that around.”

Dr. Richardson pointed at some of the papers.

“I've included a link to the Vermont Teddy Bear HBR Case study (https://store.hbr.org/product/peak-experiences-and-strategic-it-alignment-at-vermont-teddy-bear/JIT031). It covers the important principles of project portfolio management and places you in the shoes of the CIO, who's challenged with aligning the IT strategy with the corporate business goals or managing severe resource constraints and competitive forces. I know it isn't about a symphony, but these strategies work in any type of company. So by reading this case study, you kind of get into the mind of a CIO and portfolio managers and what they really go through in real‐world situations.”

Dr. Richard pointed at a graphic. (See Figure 3.1.)

“This high‐level roadmap shows how major projects are connected to broad strategic goals. This is meant to capture initiatives linked to major business goals, not as a repository of all tactical project work. You can use this roadmap to show the board the broad horizon of the projects that you intend to implement and linkages to objectives.”

“Okay, this makes sense,” I said.

“I'm going to email you a tool you can use to design initiatives that will enable you and those you partner with to deliver needed capabilities for the symphony. You already have your list of the initiative this year, and I believe you have prioritized them. You can now use this tool to map out a multi‐year roadmap for your projects by strategic objective.”

(Fidelity Investments, https://www.eaec.executiveboard.com/Members/Events/EventReplayAbstract.aspx?cid=100047046. See also Aligning the Portfolio with Business Strategy ‐ The Gillette Approach https://www.eaec.executiveboard.com/Members/Events/EventReplayAbstract.aspx?cid=100064512&fs=1&q=Gillette&program=&ds=1)

“So how do I figure out what things have the most weight? How do I figure out what I need to get done this year?”

Dr. Richardson pointed at another paper in the stack. (See Figure 3.2.)

“Most companies break up their investments in three areas. As you can see, the projects that help run the business get the most resources, then growing the business and then finally transforming the business,” he explained. “That's where I would begin. You need to know what's important to the organization, come up with strategies, and then fit your projects into that matrix. That's what I believe the board is looking for.”

I thanked Dr. Richardson for all his help. I had a lot to think about, but I felt like I understood my role way more after he clarified it. I was ready to roll up my sleeves and start digging in.

Dr. Richardson's Tips

• Portfolio management and theory are about identifying an optimal set of projects or work that is going to be undertaken, considering the limited resources, allocating resources, and synchronizing the work so that no one is being a bottleneck with the activities that are going on, and that you're also reducing the risk while at the same time maximizing the investment or the return investment that you're trying to accomplish.
• Portfolio management is a set of skills and/or capabilities that enables an organization, or a team within an organization, to analyze, select, and manage a collection of project investments that are aligned with the company's goals and objectives.
• The high‐level roadmap shows how major projects are connected to broad strategic goals. This is meant to capture initiatives linked to major business goals, not as a repository of all tactical project work. You can use this roadmap to show the board the broad horizon of the projects that you intend to implement and linkages to objectives.