Portfolio Balancing and Project Selection


in case of Alternative Ways to Achieve

Strategic Goals



By Alexey Lobzov


Moscow, Russia


What if there are projects in the portfolio which represent different ways of achieving the same strategic goal? Run them both or choose one? Which one to choose? And how will this decision result in portfolio balancing and project selection? The article helps understand this problem and find answers to those questions.


The largest and most successful companies plan their activities for several years ahead by creating a strategy. Strategy is a long-term plan for organization development with planning horizon of 1, 3 or 5 years, which implementation allows the company to move to a qualitatively new state. To control the achievement of the target state qualitative goals are usually converted into quantitative indicators using the SMART technique [2] or the balanced scorecard proposed by Norton and Kaplan [3].

Project is the main form of organizing activities aimed at achieving strategic goals. Majority of the projects form the company’s strategic portfolio. It is important to note that each individual goal can be achieved in a different way. Consequently, the strategic portfolio may include projects that represent alternative ways for achieving strategic goals. Which way should be chosen? And how will the chosen way affect the results of portfolio balancing and project selection? In the sections below you will find answers to these and other important questions from the portfolio management point of view.


The decision-making process on the choice of alternative projects may include the following steps [1, p.10]:

  1. Identifying objectives.
  2. Identifying options for achieving the objectives.
  3. Identifying the criteria to be used to compare the options.
  4. Analysis of the options.
  5. Making choices.
  6. Feedback.

The first two steps consist of setting strategic goals and defining a list of alternative projects aimed at achieving them. We are interested in the actions to be taken to make the choice among alternative projects.

1.1. Criteria identification

The problem of identifying criteria for comparing alternative projects in each case is solved individually. This situation is determined by the variety of activity areas where companies operate. Some criteria are applicable for projects of one company, different ones are suitable for another. However, a number of criteria can be formulated based on the characteristics of the project. Moreover, it is desirable that they are numerically measurable for subsequent analysis.

A project is limited in time and resources. This means that the selection criteria can be the duration of the project and its cost (in terms of separate resources in particular and budget in general). When assessing alternative projects according to these criteria, two types of estimates can be used – numerical and rating scale. The advantage of the first type is its accuracy. The disadvantage is the complexity of the calculation at the stage of project design and portfolio gathering. Rating scale estimates, on the contrary, are easier to define but because of this their accuracy suffers.

A project is being implemented under uncertain conditions. Consequently a variety of risk factors influence the choice – new technology utilized in the project, new product created in the project, organizational scope and geography of the project, etc. These factors, for the most cases, can also be expressed by numerical and rating scale estimates.

Examples of criteria and their estimates for comparing alternative projects aimed at achieving the same strategic goal are given in Table 1.


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How to cite this paper: Lobzov, A. (2021). Portfolio Balancing and Project Selection in case of Alternative Ways to Achieve Strategic Goals; PM World Journal, Vol. X, Issue IV, April.  Available online at https://pmworldlibrary.net/wp-content/uploads/2021/04/pmwj104-Apr2021-Lobzov-portfolio-balancing-and-project-selection.pdf


About the Author

Alexey Lobzov

Moscow, Russia


Alexey Lobzov, MBA, currently is lead systems analyst at Alfa-Bank with more than four-year experience in online banking development. He previously worked as senior consultant for Project PRACTICE group of companies providing advisory services in project management for more than six years.

He studied Applied Computer Science at the National Research Nuclear University MEPhI and holds a Master of Business Administration in Strategic Management from the Moscow International Higher Business School MIRBIS.

Alexey has authored a number of publications on project management and marketing.

He can be contacted at aleks.lobzov@gmail.com or via Telegram @alobzov

[1] This is a translation of the author’s original article published in Russian in Project PRACTICE corporate blog, with the author’s permission. URL (part 1): https://blog.pmpractice.ru/2017/03/02/balansirovka_portfelei/; URL (part 2): https://blog.pmpractice.ru/2017/03/02/balansirovka_portfelei-2/