Decision-making in project portfolio management: using the Cynefin framework to understand the impact of complexity

Synopsis The majority of project portfolio management tools are not flexible and responsive to complex and dynamic environments. This can result in business losses when management does not effectively adjust project portfolios to meet organizational and contextual needs. This paper concentrates on the impact of individual decision-making, perceptions of decision processes and the influence of uncertainty on effective decision-making in project portfolio management. Relevance for practice and education This research explores the impact of real-time events on managers during decision-making processes for project portfolio management, using a purpose-built simulation. The simulation development was informed by the Cynefin framework. The Cynefin framework emphasizes the importance of applying different leadership styles and decision-making approaches depending upon the complexity of the situation. Research design A multi-method, abductive research process was used to collect and analyse the data. Data collection involved four complete iterations of a purpose-built simulation, resulting in 66 datasets of individuals’ perspectives of the project portfolio management decision-making process, under varying levels of complexity. The research data were focused on participants’ perceptions of their efforts to manage key decision turning points through two “real-time” events, simulating project cancellations and organizational change. Main findings Participants were found to use different approaches to decision-making, depending on the complexity of the situation. The findings show that participants’ roles in the simulation, participants’ experience, decision makers’ feeling, the maturity of team cognition, and diversity of participants are key considerations that influence the success of decision-making under uncertainty in PPM contexts. Research implications The findings in this study build on previous research in a number of ways. They demonstrate the effectiveness of simulation as a data collection technique in project management, an approach which has hereto been rarely used. This research also develops our understanding of portfolio decision-making by directing attention from rationalist approaches to the consideration of emotion, real-time events and individuals’ decision-making styles, reflecting something closer to the lived experience of project portfolio managemen