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CIO Guidebook for Taming Change

By Dennis McCafferty

CIO Guidebook for Taming Change

Change is nothing newIn 1942, Harvard economist Joseph Schumpeter introduced the theory of "creative destruction," defining change as a natural consequence of our economic system.

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A model company for adapting to change?Wal-Mart, which constantly refines merchandising, pricing, location, supply, distribution to overpower former competitors like Woolworth's.

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What drives change today?Increased uncertainty. Greater need for innovation driven by reduced product/services lifespan. Need for good information on decisions in real time.

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What is "portfolio management"?It is a way to "tame change" with decision-making methods and tools that effectively use organizational assets. It provides a clear view of how individual actions fit within big picture.

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35 percent35 percent is the average increase in productivity/efficiency improvement that an organization can expect with effective portfolio management.

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Why are tech organizations/departments well-equipped to tame change?1. They serve multiple internal/external customers with virtually unlimited needs to create an opportunity-rich environment.2. They facilitate change as well as manage ongoing operations.3. They deliver primarily through the talents of their workers, who multi-tasks across range of assignments, duties.4. They operate in a dynamic environment in which strategies and priorities must adjust to pace of business.5. Iterative nature of work and technology means projects cannot be fully planned, staffed in advance.

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Step 1 for successful portfolio management:Assess current state of organization (cash flow, projected sales, etc.) and change influences (increasing competition, market trends).

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Step 2 for successful portfolio management:Define goals and evaluate them within research-supported life-cycle estimates for these goals.

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Step 3 for successful portfolio managementInventory resources (funding, equipment, tech, talent) and align with long-term strategies.

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Step 4 for successful portfolio management:Visualize elements competing for common resources and set prioritization.

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Step 5 for successful portfolio management:Compare/contrast alternative ways to invest money, use resources, prioritize and other management actions.

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Step 6 for successful portfolio managementDevelop a final, well-communicated long-term strategy throughout entire organization so ultimate goals are foremost in mind.

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Step 7 toward successful portfolio management:Assess results with consistent quantifiable measures such as financial analysis, risk assessment, idea management, capacity oversight, planning/scheduling, performance success.

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Three business benefits of portfolio management1. Transparency of goals, methods2. Discipline of systematic, quantified approach3. Trustworthiness, as each person involved with change process understands how decisions are made.

This article was originally published on 07-23-2010