Leverage OKRs to Achieve Breakthrough Portfolio and Investment Performance – Part 1



Adaptivity is producing a series of papers to be released in installments over the next quarter. This series will make the case that a strong OKR program is an essential strategy deployment and execution process to ensure enterprises’ portfolio management and funding processes maximize investment returns for the organization.

The Problem

Any corporate asset allocation process is, by its nature, political and fraught with competition and strife. Whether we’re discussing portfolio management, corporate budgeting, or funding approvals, the allocation of scarce resources like money, personnel, or plant and equipment confronts a vast excess of demand from business leaders, department heads, geographies and business units. The stakes are high because funding and production capacity are the lifeblood of power and success in many businesses. Given the intense competition between powerful and demanding executives, the allocation decision-making process is tense, emotional, and subject to expert gaming and manipulation. Consequently, those responsible for allocating resources and capacity are often put in stressful and even career-threatening positions.


Faced with the need to pick winners and losers in the allocation of scarce resources to nearly infinite demand, funding and portfolio management processes must be rigorously transparent, fair, and consistent in the assignment of value and prioritization of the demand queue. Traditional business-case driven portfolio and budgeting processes leverage a range of ROI/IRR/NPV/WSJF type computations to prioritize initiatives, but most organizations do a terrible job of preventing gaming and manipulation of the benefit-side of the business case. A majority of organizations fail to hold sponsors accountable for delivering the benefit they promised. Often, many potential initiatives fall within a similar range of ROI and rates of return – if there are five initiatives with differences in ROI well below the organization’s “margin of error” for portfolio performance, which should be funded? If there is a medium ROI business case that is tremendously supportive of the corporate strategic objectives, should it succumb to a non-strategic high ROI initiative?


The optimal determinant of value is alignment with and realization of the strategic objectives of the firm and its business units. ROI should be treated as a constraint for some categories of portfolio items, but rarely, if ever, the primary factor in prioritization. The problem I’ve encountered again and again as a portfolio management, finance and budgeting consultant is that many organizations do not deploy their strategy with sufficient clarity and granularity to enable the portfolio-matching function to produce good strategic prioritization decisions, much less prioritization that demand-side sponsors can understand and agree with. Unless the funding process is perceived as fair and transparent. In these conditions, the drama, politics and gamesmanship in asset-allocation decision-making typical in most organizations will be perpetuated.


So how do organizations take the high-level strategy they developed at great cost and effort, and translate that down to their real-world funding and portfolio management functions?  That is the question we will answer in the upcoming installments of our series!


The series will be produced in the following installments:

  • What is the process for deploying your high-level north star strategy and delivering it with efficiency and discipline? What are the processes, competencies, and techniques that enterprises must master to become more strategically adaptable and resilient than their competitors?

  • How do OKRs bridge the strategy gap between north star and execution? How do OKRs fight the entropic force of strategy decay? How does a portfolio vision and demand queue leverage OKRs for value assignment and prioritization?

  • What are the components of cutting edge agile and adaptive portfolio management? How do organizations exploit disruption and change for competitive advantage? What are the core metrics, measures and processes for maximizing portfolio returns amid innovation and change?

  • What are some adjacent areas for improving agility, adaptivity and resilience in corporate governance and operations (finance and budgeting, org design, performance management etc) and where can I learn more?