Insights from Outside the Bubble: The Portfolio

by Detlef Palm 

We sometimes have great ideas. More frequently, we have really bad ideas or useless designs.

This is how it happens. We try this and try that, until we find the best way solving a problem. We try a few openings for our next report or column, until we hit on that really cool opening line.

Except in UNICEF. Never mind that we work in extremely uncertain or risky environments, but all our projects are a winner. I hardly ever read anywhere that a UNICEF project was a failure, leave alone a bad idea.

Sure enough, we don’t want to advertise to the world that we are often failing. But for overall organizational health and to increase the likelihood of success, an organization needs to learn from its flops. As Thomas Edison is quoted saying: I have found 10,000 ways that won’t work. I am 10,000 times closer to a solution now.

In every organizational review there have been recommendations urging the organization to be generous, to shift its culture, to embrace risk taking, and to learn from mistakes. It never has happened. Perhaps there are too many colleagues who never seem to get something right and interpret such advice as a signal to take the early train home.

Good risk management allows failure to happen, as long as the bottom line of the portfolio – that is the sum of all projects and results under a manager’s authority – is showing a positive result. The point of portfolio management is to cover for the uncertainties not known at the beginning of an initiative. Exactly as in the world of financial investments.

The portfolio view of someone’s track record exactly bridges the gap between

• the organizational need for trial and error and learning from mistakes and
• a fair assessment of individual performance.

Of course, we don’t want public displays of representatives showing remorse over a botched project. Instead we want to recognize people for

• trying out something novel,
• knowing when to end and stop digging, and
• bringing home a lesson from which we all can benefit.

Provided the bottom line of their portfolio looks good.

👉 UNICEF must openly and transparently deal with failed or less successful projects, and take a portfolio view when assessing performance

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