The terminology may be a bit confusing, because ‘portfolio’ in strategic management usually refers to the set of businesses in a multi-business corporation, and the word ‘corporate’ generally refers specifically to companies made up of multiple business units – so Ryanair is a ‘company’ or ‘business’ and Shell is a ‘corporation’. CPM seems to refer to the portfolio of projects, whether within a single business unit or across a multi-business firm.

There may be a few important links for strategic management.

1. The topic must clearly dominate the strategic management of firms who are largely engaged in delivering projects to clients … which projects to bid for, how much to invest, how to price, how to build and sustain staff, experience and capability, and so on. I don’t see much on this in the usual strategy books and frameworks.
2. It must also be a vital element of strategic management in firms for whom large projects are a major part of what they need to do to function – oil and mineral companies, for example.
3. It seems also to be significant specifically in the R&D and product development functions in e.g. pharmaceuticals or car making. And of course it is critical in IT.

And it is the issues that arise from IT portfolio management that raise the intriguing extension for strategic management generally. A common issue in IT is the interdependency between projects – we can’t automate activity X until we have good quality data, and we can’t get that until we have done project Y to restructure our databases, but when we have done that, we can redesign business processes A, B, C, which means we can reduce costs there and spend more on activity Z …. A short and simplified framework for this appears in a section of chapter 9 of my book, developed and tested with one of the IT-service firms.

Generally, the way I have written about strategy focuses on continuous policy issues – pricing, marketing, hiring etc. Strategy for many firms, though, especially in fast-changing sectors, features more strongly a sequence of projects, e.g. in new product development, new market entry, alliances and acquisitions. So it looks like this will need addressing in the 2nd edition.

The really interesting question is what happens when you take a portfolio view of both projects and continuous policy – when you have to choose, prioritise and sequence both discrete initiatives such as product launches and IT investments with with continuing choices on pricing, marketing etc. Much to work on here I think.

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With the downturn accelerating, there will be many more examples of weak firms forced to surrender potentially valuable resources – especially capacity and people – to those whose sound strategic management avoided getting into trouble. In the extreme, this will involve absorbing those weaklings in total. Smart firms in cyclical industries, from petrochemicals to paper to insurance to construction, have long known how to exploit the short-sightedness of others. See for example ‘Managing Capacity in Basic Materials‘ – though the principles are far more widely applicable than just in ‘basic materials’.