Organizations today face a brutal choice: adapt continuously or become irrelevant. Markets shift. Customer expectations evolve. Technology cycles accelerate. Traditional project-based structures, designed for predictability, have become liabilities in a world that rewards adaptability.
The product operating model replaces this rigidity with a system built around end-to-end value delivery, customer outcomes, and long-lived, cross-functional teams. It aligns business and technology toward a shared purpose: delivering measurable value continuously, not sporadically.
Companies that have embraced this model see measurable improvements in customer-centricity and innovation, speed-to-market, and customer and employee satisfaction.
This piece explores how portfolio management must evolve to unlock the full benefits of a product operating model. For a broader perspective on product-led transformation, see our first blog paper, “Project-to-Product: The Shift Most Organizations Underestimate.”
Shifting to a product operating model changes everything about how portfolios are managed. The focus moves from managing discrete projects to managing persistent product teams accountable for tangible business outcomes.
If you're leading portfolio decisions today, you're wrestling with questions that traditional frameworks can't answer:
How do we prioritize product teams to deliver the greatest enterprise value?
How can I empower product management while maintaining governance and visibility into how our work connects to our strategy?
How do we fund teams that live beyond individual initiatives?
How do we make coherent strategic decisions when roadmaps cross organizational boundaries?
How do we measure success in terms of outcomes, not activity?
These aren’t isolated questions. These are interconnected challenges that require a unified approach to strategy, governance, and culture. In a product-led environment, portfolio management becomes the discipline that ties it all together: ensuring that investments align with strategic intent, resources are deployed dynamically, and results are measured in terms of value realized.
At the heart of portfolio management lies one essential concept: The Golden Thread.
This is the continuous connection between strategy (the “Why”), portfolios (the “What”), and initiatives (the “How”). It’s an unbroken line that ensures every decision, investment, and outcome directly reinforces strategic intent. When this thread is intact, leaders gain clarity: which products are delivering value, which are drifting, and where course corrections are needed. When it frays, misalignment grows.
The Golden Thread isn’t established through a single framework or technology—it’s built through a system of capabilities that keep strategy, funding, and execution in lockstep. Achieving this requires organizations to deliberately develop and mature seven key capabilities – each playing a distinct role in translating intent to impact.
Too many organizations treat funding like a yearly ritual: allocate, spend, stop, restart. It’s a cycle that kills momentum and agility.
Product funding breaks that cycle. Instead of financing projects with fixed end dates, it invests continuously in long-lived teams aligned to value streams. Resources flow where the customer value is, not where the budget calendar says they should.
The best way to unlock agility:
When done right, funding becomes more than a governance mechanism — it becomes the heartbeat of business agility.
Traditional Approach: Generic learning programs delivered the same way to all employees regardless of their role, experience level, or learning preferences, with limited engagement and experiential elements.
An Enhanced Perspective: Learning experiences must be engaging, accessible, immersive, and designed with the learner's context and needs at the center. And with AI, it’s never been easier to achieve this: According to Harvard, “53% of L&D leaders expect AI to improve the adaptability of talent programs.” Here’s what this could look like in action:
Key Insight: AI can create gamified immersive training experiences through AR and VR simulations. These gamified immersive experiences significantly boost learner engagement and motivation even increase memory retention rates by up to 90%, making trainings more effective. AI-driven AR and VR platforms create immersive environments to help with practicing soft skills within leadership scenarios, customer service or even more technical tasks, making complex topics more relatable by creating hands-on experience.
Traditional Approach: Leaders are expected to be experts who direct digital transformation efforts from the top down, with capability and learning seen as discrete events rather than an ongoing process.
An Enhanced Perspective: AI evolves too quickly for any single leader to stay expert in every application, making "leading from behind" essential. But there's more to it than speed. Traditional expertise comes from years of building deep technical skills—the kind of knowledge leaders could demonstrate through experience. AI expertise is different. It's less about technical mastery and more about adoption behaviors: curiosity, experimentation, comfort with uncertainty, data-driven thinking, and a growth mindset.
Many L&D programs fail because organizations take a tech-first approach when they need a behavior-first one. Leaders can't rely on traditional expertise here. They need to lead by showing vulnerability, learning alongside their teams, creating safe spaces to experiment and fail forward. This happens when:
Key Insight: AI fosters ongoing skill development by recommending just-in-time learning resources, micro-learning modules, and personalized coaching. This promotes a culture of continuous capability building and learning where employees are empowered to develop and refine their skills regularly. AI-powered learning platforms support on-time, anytime learning which makes it possible for employees to access relevant content exactly when they need it, whether through social learning features or personalized recommendations that fit into their workflow. This shift from scheduled training events to continuous, embedded learning makes things like workforce adaptability and relevance much more feasible.
Strategy breaks down when talent can’t move. Many organizations have bold plans, but people remain locked into roles, projects, and structures that don’t flex as priorities change. A more agile approach to talent management helps organizations pivot faster, reduce churn, and keep people focused on the work that delivers the most value.
Flexible talent management creates flow. Skills move to the highest-value work. Teams are formed around impact, not hierarchy. Capability matters more than convenience.
Team shape flexes with context. Think: product stage, strategic importance, and whether you're building a customer-facing product, platform, or enabling capability. The goal is to stay small, focused, and high-performing.
Portfolio visibility should keep talent where it counts. It shows where to double down, where to bring in partners (e.g., for non-differentiating products), and where capability is trapped doing low-value work.
The difference between reacting to market changes and leading them lies in preparation. Strategic scenario analysis gives organizations the power to see around corners and ask, “What if...?” rather than “What now?” It turns volatility into advantage by helping leaders test choices, weigh trade-offs, and stress-test strategies against shifting realities.
We’ve found that the best organizations don’t predict the future—they practice it. They run scenarios not to eliminate uncertainty, but to build the muscle to respond faster when it arrives. When done well, scenario analysis transforms uncertainty from a risk into a readiness strategy.
Data without direction is just noise. Meaningful reporting doesn’t just show what’s happening. It shows what could happen, prompting leaders to act before problems become performance gaps.
Real-time dashboards, self-service views, and integrated metrics connect strategy to execution, allowing leaders to see what’s working, what’s stalling, and where to pivot next.
Tools like NH360 Portfolio Insights can create this synthesis, giving leaders the power to stress-test decisions before committing to them.
The goal isn’t more reports; it’s more responsive decisions.
Every strategy depends on people to make it real. Yet many organizations plan investments down to the penny but fail to consider whether their teams have the capability and capacity to deliver it.
In our experience, the organizations that consistently outperform are those that treat people capability as a strategic asset — not an afterthought. They build balanced, sustainable teams with the right mix of skills, autonomy, and accountability, and then continue to invest in their growth. These teams do their best work in environments that encourage experimentation, continuous learning, and smart, calculated risk-taking.
Equally important is the portfolio function that guides them; equipped with the authority, expertise, and bandwidth to anticipate issues and orchestrate across value streams. When capability and capacity are in sync, execution feels effortless. The organization moves with confidence because its people aren’t just staffed, they’re ready.
Organizations that master these capabilities in conjunction with broader product adoption create a platform for competitive advantage:
Ready to transform how your portfolio delivers value? North Highland helps organizations build the capabilities and systems that connect strategy to execution. Let’s talk about what’s possible for your portfolio.
Want to know more about managing portfolios in a product world? See our earlier blog on Agile Portfolio Governance.