Best Practices for Building a Project Portfolio Steering Committee
- The project portfolio steering committee is a high-level governance body that’s appointed to oversee and “steer” the portfolio
- It complements the work of Project and Portfolio Managers while providing them guidance
- A steering committee is typically made up of a small group of executives from various functions
- In addition to expertise and experience, the members of a project portfolio steering committee need to demonstrate great leadership, human and communication skills
Steering committees are an increasingly popular type of corporate governance body. These oversight and advisory committees are generally made up of a small group of leaders from different departments or areas of the business. They regularly meet to supervise the direction and course of an initiative.
A lot of project-oriented organizations have set up dedicated steering committees to provide guidance to their key portfolio of projects. Here’s how a project portfolio steering committee works and how to create one.
Role of a Project Portfolio Steering Committee
Let’s start by getting a common misconception out of the way: a portfolio steering committee is NOT a collegial Project Management Office. In fact, large and/or sophisticated project organizations often have both a PMO and one or several portfolio steering committee(s), all playing different roles. A steering committee is not designed to interfere in the project management process or to encroach upon the program/project management prerogatives of the PMO. Instead, the committee will support project management professionals to help ensure that they are working towards the strategic directions defined at the company level.
A project portfolio steering committee may, for example:
- Set the strategic direction of key projects, prioritize and/on reprioritize initiatives
- Act as a champion and sponsor for key projects to promote them throughout the wider organization
- Provide advice and expert input on business issues (budgeting, hiring, marketing, and so forth)
- Resolve conflicts or arbitrate between different stakeholders
- Monitor the quality and outcomes of the project management process and adjust accordingly
- Refine or expand on policies and governance procedures
- Identify business risks to the portfolio and come up with ideas and strategies to mitigate
Although the members of the steering committee typically don’t perform the action they recommend or prescribe, such a committee can create significant business and project value. Their distance from daily concerns and operations enables them to look at things with fresh eyes and bring valuable perspectives and insights to the management of the portfolio. However, in order to maximize the value and benefits of having a project portfolio steering committee, organizations should make sure that their committee doesn’t evolve into a bureaucratic entity that increases procedural and administrative overhead unnecessarily. Where a steering committee coexists with a PMO and/or with other management or governance bodies, it is also essential to make sure their roles and actions are not redundant with each other.
Make Up of a Project Portfolio Steering Committee
The members of a project portfolio steering committee are usually people with considerable stake in the outcomes of the projects in the portfolio. They are typically senior managers or executives, board members even, department heads with appropriate decision-making authority, experts and authority figures (either internal or external to the business).
This is the rule of thumb. The particular makeup of a specific portfolio steering committee will depend on the scope, nature and objectives of that portfolio. According to the type of projects managed and to the goals that are being pursued through these projects, it may make sense to involve scientific experts, or marketing professionals, or financial profiles, etc.
Project management professionals are generally not permanent members of a project portfolio steering committee, although the Project Management Officer or the Portfolio Manager might be included, if only on a case-by-case basis.
Here are a few pieces of advice for organizations that are considering setting up a project portfolio steering committee:
- Keep it small. The efficiency and the value of your committee will hinge upon its ability to make fast decisions. Hence the imperative to limit the number of members and keep the panel comparatively small. This can be a challenge when dealing with large portfolios with key projects involving multiple departments that all feel they should be represented.
- Pick the right people. Expertise, authority and clout are not the only factors to be taken into account. What makes a great steering committee member is also the individual’s personality. It is of equal importance to build a balanced team and to select people that will be able to work with each other successfully. Finally, the leaders that’ll be invited to sit on the project portfolio steering committee should demonstrate great soft skills, and more specifically great communication abilities.
To learn more about Project Portfolio Management and Governance:
- Optimizing the Governance of Your Project Portfolio
- The Key Features and Benefits of Project Portfolio Management Systems
- What Are the Key Activities of Portfolio Management?
Valerie is Sciforma Chief Marketing Officer. Main interests: digital transformation, change management, strategy execution. Send your thoughts @valeriezeller