Actors, roles and responsibilities

When practicing portfolio uncertainty management, the number of important stakehold-ers grows compared to typical project risk management processes. After all, effective decision-making requires tight collaboration between the project, portfolio and senior managers (Korhonen, Laine and Martinsuo, 2014). In this complex portfolio context, the importance of role clarity and formalized uncertainty management processes is evident (Teller, 2013). Hence, agile and harmonized portfolio uncertainty management requires well-defined responsibilities, accountable stakeholders and a clear organizational struc-ture (Ward and Chapman, 2003; Teller, 2013; Kock and Gemünden, 2016). This chapter aims to give an overview on the typical stakeholders related to portfolio uncertainty man-agement, and the suggested responsibilities designated for each actor.

Key stakeholders of portfolio uncertainty management

Project portfolio stakeholders refer to a group or an individual that is affected by or may affect the achievement of the portfolio’s objectives (Beringer, Jonas and Kock, 2013). In

this study, portfolio stakeholders refer to both internal and external stakeholders. Actors on the other hand can be viewed as a synonymous term to internal stakeholders. As stated previously, portfolio uncertainty management requires involvement of multiple dif-ferent stakeholders, and the actors and their typical responsibilities vary between differ-ent organizations. According to Teller (2013), such stakeholders typically include project and portfolio managers, their corresponding team members, senior management, busi-ness owner, customers and potentially a Chief risk officer. Beringer, Jonas and Kock (2013) on the other hand list four strategic internal project portfolio stakeholders: senior managers, mid-level line managers, project portfolio managers and project managers. In addition, some organization might establish a separate change control board to deal with unexpected events (Petit, 2012), or utilize third parties in transferring uncertainties (PMI, 2013, p. 344).

Even though the success of project portfolio management is also related to the project portfolio stakeholders (Beringer, Jonas and Kock, 2013), these stakeholders and their corresponding responsibilities have not been broadly studied in portfolio literature espe-cially in terms of portfolio uncertainty management. However, management’s involve-ment and stakeholder behavior have slowly started to gain more attraction (McNally et al., 2009; Jonas, 2010; Beringer, Jonas and Kock, 2013). Some relevant studies, their methodologies, research context and key findings have been collected to table 4 below.

Most studies presented in table 4 are focused on portfolios of large organizations (Blichfeldt and Eskerod, 2008; Christiansen and Varnes, 2008; McNally et al., 2009), where the empirical evidence is mainly based on qualitative single- or multiple-case stud-ies. Although the diversity of industries in some of these studies increases generalizabil-ity, company size may have an impact on the findings related to the actors, roles and responsibilities on portfolio level. After all, larger companies might have more established and formalized project portfolio management and risk management processes (Teller, Kock and Gemünden, 2014). The only exceptions from the methodology point of view are Blomquist’s and Müller’s (2006) multimethod study and Bringer’s, Jonas’ and Kock’s (2013) quantitative hierarchical multiple regression analysis, where both studies have also included medium-sized companies in their research context.

Table 4. Previous literature on actors, roles and responsibilities related to project port-folio management

Although the key findings of these studies vary, most emphasize the need for clear roles and cooperation between different portfolio actors (Blomquist and Müller, 2006; Jonas, 2010; Beringer, Jonas and Kock, 2013; Teller, 2013; Korhonen, Laine and Martinsuo, 2014). Some studies also bring forward the idea that identity, personal interests and dis-positional traits of the decision-maker also influence the project portfolio management practices and roles (Blichfeldt and Eskerod, 2008; Christiansen and Varnes, 2008;

McNally et al., 2009; Beringer, Jonas and Kock, 2013; Korhonen, Laine and Martinsuo, 2014).

Each of these studies presented in table 4 have undeniably provide important key find-ings related to the actors, roles and responsibilities in project portfolio management.

However, only Korhonen, Laine and Martinsuo (2014) and Teller (2013) have specifically acknowledged the portfolio uncertainty management point of view. Hence, empirical ev-idence related to the actors, roles and responsibilities in portfolio uncertainty manage-ment is rather limited, and therefore brings forward an evident research gap in project portfolio literature.

Responsibilities and uncertainty accountability

In order to avoid unnecessary conflicts and enable fast decision-making, each stake-holder should have a clear role and responsibility (Blomquist and Müller, 2006; Jonas, 2010; Kock and Gemünden, 2016). According to Cleden (2009), the decision-making should be made by a person with the right amount of knowledge, competence and au-thorization to act when needed. Table 5 aims to compile common stakeholders described previously and their typical responsibilities.

Project managers tend to be responsible for resolving uncertainties on single project level (Cleden, 2009). These uncertainties include technical, economical and duration-related risks (Teller, 2013). According to Korhonen, Laine and Martinsuo (2014), how-ever, these actors also recognize uncertainties stemming from the external environment and organizational complexity. Still, project managers should not be solely accountable for the management of uncertainties impacting the whole portfolio (Teller, 2013), and they should provide project status information and escalate other significant uncertainties to the corresponding portfolio manager (Beringer, Jonas and Kock, 2013).

Blomquist and Müller (2006) assign the same responsibilities for both program and port-folio managers. According to the authors, these actors are responsible for identifying bad projects, participating in steering groups, prioritizing and coordinating projects, handling possible issues, coaching project managers, collecting and aggregating reports for the senior management, initiating reviews and improving processes (Blomquist and Müller,

2006). In addition to the previously listed responsibilities, the portfolio managers and their team members need to then prioritize the risks and determine the correct strategy for dealing with these uncertainties (Martinsuo, Korhonen and Laine, 2014), and plan and control the overall project landscape (Jonas, 2010).

Table 5. Key stakeholders and main responsibilities related to portfolio uncertainty management

Stakeholder Roles and responsibilities

Project managers

and team members • Single project risk management (Teller, 2013)

• Accountable for project success, responsible for providing project status information utilized in cross-project optimization and collaboration across portfolio components (Beringer, Jonas and Kock, 2013)

Program managers

and team members • Identifying bad projects, participating in steering groups, prioritizing and coordinating projects, handling possible issues, coaching project manag-ers, collecting and aggregating reports, initiating reviews and improving processes (Blomquist and Müller, 2006)

Portfolio managers

and team members • Portfolio risk management (Teller, 2013)

• Prioritizing risks and planning risk response strategies (Martinsuo, Korhonen and Laine, 2014)

• Planning and controlling project landscapes (Jonas, 2010)

• Identifying bad projects, participating in steering groups, prioritizing and coordinating projects, handling possible issues, coaching project manag-ers, collecting and aggregating reports, initiating reviews and improving processes (Blomquist and Müller, 2006)

Mid-level line

manag-ers • Typical resource owners (Beringer, Jonas and Kock, 2013) Senior management • Typical decision-makers (Teller, 2013)

• Responsible for prioritization, selection and evaluation mechanisms, and making timely decisions related to resource reallocation and project repri-oritization (Beringer, Jonas and Kock, 2013).

The business

owner/controller • Financial officer (Korhonen, Laine and Martinsuo, 2014) Portfolio steering

group • Continuous monitoring of the portfolio status, developing uncertainty re-sponses and identifying interdependencies between portfolio compo-nents (Jonas, 2010)

Chief Risk Officer • A consultative role designated solely for project and portfolio risk man-agement (Teller, 2013)

Change control board

and cheetah teams • Development of change control processes (Petit, 2012)

• Solving unexpected problems (Engwall and Svensson, 2001, 2004) Customers • Transferred uncertainties (Teller, 2013)

Other third parties • Transferred uncertainties (Teller, 2013)

The portfolio managers are recommended to take the main responsibility for practicing risk management of portfolio level, including support for project managers, aggregating project uncertainties to portfolio level, analyzing possible interdependencies between portfolio components and developing adequate risk responses (Teller, 2013). As this list is quite extensive, these responsibilities might be split to numerous different people, such as product managers, product development unit managers, portfolio planners and finan-cial controllers (Petit, 2012). Mid-level line managers, on the other hand, are often as-signed as resource owners (Beringer, Jonas and Kock, 2013).

Although portfolio managers should take portfolio context into account in their decision-making (Teller, 2013; Teller, Kock and Gemünden, 2014), senior management and the business owner are often the actors responsible for integrating market and strategy un-certainties to the portfolio risks (Teller, 2013). After all, senior managers typically act as the main decision-makers on uncertainties related to organizational strategy (Teller, 2013), and responsible for making timely decisions in terms of resource reallocation and project reprioritization (Beringer, Jonas and Kock, 2013) Similarly, a designated portfolio steering group may be established to continuously monitor the portfolio status and iden-tifying possible interdependencies and synergies between portfolio components (Jonas, 2010). This group might also be responsible for developing adequate uncertainty re-sponses (Jonas, 2010), such as reconfiguring the portfolio content when needed.

Additionally, the organization may have a designated chief risk officer, which acts as an internal consultant for developing project and portfolio levelled risk management prac-tices (Teller, 2013). Sometimes, a highly uncertain and turbulent context may even re-quire a separate change control board, that is responsible for the development change control processes (Petit, 2012). Engwall and Svensson (2001, 2004) have also pre-sented a possibility of cheetah teams acting as temporary organizations aimed for solv-ing unexpected problems. These actors may be especially important in the management of unforeseen uncertainties requiring fast and reactive change management. Lastly, cus-tomers and other third parties such as suppliers may be involved, if the organization has decided to transfer the responsibility of certain uncertainties to these external stakehold-ers (Teller, 2013).