The problem: a disconnected landscape

In many organizations, strategy, portfolio management, and transformation initiatives operate in silos. As a result, portfolio management often ends up as an administrative reporting function rather than a tool for driving strategic direction. Strategic direction is defined in one part of the business. Projects are initiated in another. And transformation efforts are managed elsewhere, often without a shared governance framework.

This disconnection is not just a coordination issue. It is structural. When portfolio management is not directly connected to strategy, organizations struggle to prioritize, sequence, and resource their projects effectively. Transformation programs are launched with unclear mandates. Strategic objectives remain abstract, disconnected from the actual work taking place. And those responsible for delivery operate without a reliable compass.

This is not just limited to isolated cases. At Another Consulting Firm, we have encountered several organizations where transformation leads, project owners, and strategy teams all report versions of the same issue: they cannot see the whole picture, and they do not know who holds the responsibility.

When strategy and portfolio align, execution follows

When portfolio management is closely tied to strategy, several things become possible:

  • Projects are selected based on current strategic priorities rather than legacy assumptions or internal lobbying.
  • The organization has a shared language for value, risk, and urgency across different departments.
  • Leaders can have informed conversations about trade-offs and capacity, supported by real-time portfolio data.
  • Transformation efforts reinforce one another and contribute to clear, measurable outcomes.

With this alignment in place, portfolio management no longer operates as a passive reporting mechanism. It becomes a way to make sure time, effort, and investments are focused on the goals that matter most. The function thereby shifts from reacting to past development to taking a proactive role in guiding future direction.

What happens when they are not in sync

The cost of separation is high. Without integration between strategy and portfolio:

  • Projects proliferate without strategic coherence.
  • Teams are overextended, delivering fragmented results.
  • Business cases are created to justify specific initiatives, not to assess future potential.
  • Decisions are made reactively rather than systematically.
  • The organization spends more time chasing alignment than creating value.

Transformation becomes performative. Strategy becomes wishful. And portfolio management becomes a bureaucratic function instead of a dynamic engine for progress.

Strategy, portfolio, or transformation?

In practice, not all organizations have a dedicated portfolio management function – and that is entirely valid. In such cases, the responsibility for connecting strategy and execution typically lies on strategy or transformation leads.  

Whether it is called a strategy office, transformation team, or portfolio function, the need is the same: someone must connect high-level direction to on-the-ground delivery. This requires governance, not just goodwill.

At its core, portfolio management is the operationalization of strategy. It is not a secondary function. It is how strategy happens.

A governance model worth considering

Organizations that succeed in aligning strategy and portfolio management often rely on a clear and well-functioning governance model. While structures may vary depending on size, maturity, and industry, research and practice suggest a setup with five interconnected components is particularly effective:

  1. Corporate strategy sets the long-term direction and articulates the overarching goals. This level should define what success looks like and why it matters.
  2. A strategic Steering Committee or Executive Board enables strategy execution. This group translates strategic goals into criteria for prioritization, approves major initiatives, and ensures the portfolio reflects what matters most to the organization.
  3. A Transformation Office or Portfolio Management function plays a coordinating role. It structures the portfolio, manages capacity, tracks interdependencies, and ensures sequencing and timing are realistic. This function also provides a clear line of sight from individual initiatives and the strategic outcomes they are intended to support.
  4. Program and Project Management drives implementation. Here, initiatives are scoped, planned, and executed in alignment with strategic ambitions and portfolio decisions.
  5. Feedback loops across all levels ensure that learning travels upward as effectively as direction travels downward. Data from project execution, outcomes, and emerging risks should inform strategic decisions and portfolio adjustments. These loops enable agility, accountability, and continuous alignment.

This model can help organizations make better choices, handle change more effectively, and ensure that plans and actions stay connected. The exact setup should reflect your organization’s size, complexity, and maturity. That said, we recommend that these core components remain connected to ensure that direction and delivery inform each other. Without such a structure, even the best strategy risks staying on paper, and portfolios become overloaded, reactive, or disconnected from what truly drives value.

Closing thought

Strategy does not fail in the boardroom. It fails in execution. And execution fails when no one owns the translation between aspiration and activity.

That translation is portfolio management. It plays a role alongside strategy and transformation – not below them or behind them.

Organizations that connect these functions early and clearly are better positioned to prioritize, deliver, and adapt. Those that do not will continue to struggle with unclear trade-offs, misaligned efforts, and unrealized ambitions.

Curious to dig deeper?

Here are three excellent sources if you would like to explore the topic further:

  • Project Portfolio Management: Best Practices for Strategic Alignment, Suvvari, IJRPB, 2023
  • The Portfolio Planning, Implementing, and Governing Process, Journal of Information Systems and Technology Management, 2022
  • Strategically Aligning Project Portfolios, Project Management Institute (PMI)