Project Lamb Meatballs - Value-based vs Project-based Portfolio Management

Written by Liam McLennan

Intuitively, when a person looks for a technology solution, they begin with a project mindset. They want to understand what they will get, when they will get it, and how much it will cost. This is a logical way to attempt to control cost and limit risk, unfortunately it is incompatible with pursuing value. To understand why, think of a buffet.

Buffet Photo by Mohammad Saifullah on Unsplash

The Value Mindset

When one approaches a buffet with a clean, empty plate the desired value is the satisfaction of a good meal. The diner surveys the buffet options then begins to take small quantities of desired foods, until a pleasing meal is assembled. The diner has optimized for the creation of value, according to their criteria (satisfaction of a good meal).

The Project Mindset

Next in line is a hungry project manager. The project manager sees the world not in terms of value to be created but in terms of projects to be started, progressed, completed and retired. The project manager arrives plate in hand at the first item in the buffet, which happens to be loose corn kernels. The project manager begins heaping their plate with corn, then requests more plates when they realize that they have underestimated the required capacity.


They then proceed to eat all the corn in the buffet and declare the corn kernel project a success. They did not achieve the satisfaction of a good meal, but there is no time to think about that before moving on to project lamb meatballs.

If Not Nothing, Then All

When we decide to use technology to assist in a particular area, we often fall into the trap of thinking that if we are doing something we must do everything, presented as defining and completing “the project”. This fails to consider the opportunity cost of any one project. By deciding to see one project (corn kernels) through to the bitter end we miss out on other options that we could be pursuing to create value. All initiatives have diminishing returns so proper portfolio management requires considering all options simultaneously and pursuing each only to the extent that it creates the maximum value (sample many buffet items to create the optimal meal).

Value-based Portfolio Management

The idea described above is sometimes called value-based portfolio management. To core idea is to always be working on the tasks that will create the most value at this moment. When an organisation attempts to follow the value in this way, they quickly come into conflict with the project mindset. The very notion of planning out a program of work and then executing against it conflicts with the idea of pursuing value. If we are to follow the plan, then we cannot follow the value. Since all initiatives have diminishing returns if we are working according to a program of work then at some point we will dip below a threshold where what we are working on is no longer the most valuable thing to the organisation.

An Antidote


One simple solution is to continually evaluate the plan, detect the moment when we cease to be working on the most valuable thing, and correct the plan at that moment. The astute observer will recognize that this looks suspiciously like not following a plan at all.

Another option emerges as we recognize that objectives are more stable than solutions. Instead of planning tasks to be executed, plan in terms of progress against goals. Next quarter we will assemble a satisfying meal from the buffet. The optimal steps to achieve that outcome will change but a plan expressed in terms of outcomes is stable. A talented team will be free to find the optimal solution, instead of being chained to an out-of-date plan.

Challenge, plus constraints

One way to define technology initiatives is challenge, plus constraints. For example:

create an online sales channel for a coffee retailer. Spend less than $1M. Ship before Christmas.

As a sponsor or stakeholder of this initiative this lets me manage my risk, so long as I trust the team executing. It is an unfamiliar model in technology that makes some people uncomfortable, but it is widespread in other contexts. You don’t tell your surgeon how to perform your surgery, or your chef how to prepare your food. As a rule, I propose that mandating to experts how they should do their work is a bad idea. It might feel like it reduces risk, but it does not.


When we think of projects, we think we need to do everything now or else it will never get done. This is not realistic in technology delivery. Everything is an iterative process that takes time and changes when it encounters real users. Instead, focus on value. Clarify what your goals are and find the thing that will have the most effect right now. If something is important it will eventually get done. If it doesn’t then you probably dodged a bullet.