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25 IMPORTANT
Portfolio
Management
Interview Questions &
Answers
1. How do you define a Portfolio?

Ans: This is a very basic question that interviewers will usually

start with. A portfolio is a collection of projects, programs,
subsidiary portfolios, and operations managed as a group to
achieve strategic objectives. The portfolio components, such as
programs and projects within the portfolio, are quantifiable (e.g.,
identified, categorized, evaluated, prioritized, authorized).

2. How do you define organizational strategy? And

What is its relationship with Portfolio
management?

Ans: An organizational strategy is composed of goals and policies

that provide the overall direction and focus of the organization,
and plans and actions to achieve those goals. An organizational
strategy is an action plan for how a company will achieve its long-
term goals. Developing an organizational strategy should result in
a business plan that aligns with the company’s mission and
business goals. Portfolio management is an integral part of the
organization’s overall strategic direction. It is the vehicle through
which change initiatives and strategic investments are undertaken
to realize strategic goals and objectives. Linking portfolio
management to strategy balances the use of resources to
maximize the value delivered in executing programs, projects, and
operational activities.

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3. What is the relationship of the organizational
project management (OPM) and portfolio
management?

Ans: Portfolio management, program management, and project

management are domains of the organizational project
management framework for managing the capability to deliver
value. Organizational project management (OPM) is a framework in
which portfolio, program, and project management are integrated
with organizational enablers in order to achieve strategic
objectives. OPM enables an organization to leverage its results and
implementation success, and supports a strong organization within
a competitive and rapidly changing environment.

4. In your opinion, what are the key areas of

expertise a portfolio manager should have?

Ans: For the portfolio manager to succeed in this role, he or she

should be able to form and lead expert teams, and have expertise
in all of the following areas: strategic management, portfolio
management tools and techniques, systems thinking, stakeholder
engagement, risk management, and organizational change
management.

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5. From a practical perspective, what is the relation
among Programs, Projects, and Portfolio?

Ans: This is a basic portfolio management interview question;

however, it tests your understanding of project and portfolio
management concepts.

The relationships among portfolios, programs, and projects are

such that a portfolio refers to a collection of projects, programs,
subsidiary portfolios, and related operations managed collectively
as a group to achieve strategic objectives.

The relationships among these components have the potential to

bring value to the organization through portfolio management.
Programs are grouped within a portfolio, and they include related
projects, subsidiary programs, and program activities managed in
a coordinated manner to obtain benefits not available from
managing them individually.

Individual projects that have strategic importance, whether within

or outside of a program, are considered part of a portfolio.

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6. As a portfolio manager, what should you expect
from the Portfolio Management Office (PMO) in
your organization?

Ans. Well, you should show the interviewer in this question that
you know the different types of portfolio management offices. A
portfolio management office (PMO) is a group or department that
defines, maintains and ensures portfolio management standards
across an organization. The portfolio management office has a
focused and specific responsibility for the centralized management
and coordination of the portfolios that lie within its domain. The
responsibilities of this office may range from providing portfolio
support functions to actually managing the portfolio.

7. When you start a Portfolio, for what purpose you

should conduct strategic alignment analysis?

Ans. While defining a portfolio, strategic alignment analysis is an

important technique to use. The strategic alignment analysis
focuses on the new or changing organizational strategy and
objectives. The analysis also indicates where there are gaps in
focus, investment, or alignment within the portfolio. Portfolios or
inventory of work must be validated against organizational
strategy updates to ensure consistency with the evolving
organizational mission, goals, and objectives.

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8. What are the key components of a Portfolio
Strategic Plan?

Ans. To create the portfolio strategic plan, the portfolio vision and
objectives are defined to align with organizational strategy. The
portfolio strategic plan key contents are: Portfolio vision and
objectives; Organizational structure; Measurable goals and
guidance; Allocation of funds to different types of initiatives;
Portfolio benefits; Risk tolerance; Prioritization model; and
required resources.

9. What is the purpose of using the capability and

capacity analysis in portfolio management?

Ans: This is one of the techniques heavily used by portfolio

managers. Capability and capacity analysis is performed to
understand how much work is able to be performed based on the
resources available (capacity), as well as the ability of the
organization to source and execute the selected portfolio and to
determine the constraints generated by certain skill set
limitations, financial constraints, and other asset capacity factors
(capability).

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10. What is the document you should develop to
authorize your portfolio?

Ans: A portfolio charter is the document that formally authorizes

the portfolio manager to apply portfolio resources to the portfolio
component. The charter provides the portfolio structure including
the hierarchy and organization of the portfolio, sub-portfolios,
programs, projects, and operations and forecasts how and when
the portfolio will deliver value to the organization.

11. How do you define the Portfolio governance?

And why it should be created?

Ans: Portfolio governance is a set of interrelated organizational

processes by which an organization selects and prioritizes
components, and allocates limited internal resources to best
accomplish organizational strategy and objectives.

The portfolio governance model defines the way the organizational

assets and resources are planned to be managed within the
portfolio according to the specific environment of the
organization. It establishes and tailors the decision-making rights
and authorities, responsibilities, rules, and protocols needed to
manage progress based on portfolio risk towards the achievement
of their organizational strategy and objectives.

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12. What is a Portfolio Roadmap?

Ans: The portfolio roadmap should provide the high-level strategic

direction and information in a chronological view for portfolio
management execution and enable dependencies within the
portfolio to be established and evaluated.

13. In your opinion, what is the best description of

the portfolio components performance measures
and targets?

Ans: There are broad range of answers that you can provide the
interview with. The best is that the measures and targets should be
SMART. Performance measures and targets (metrics) are set at the
portfolio component level and then rolled up to the portfolio level to
determine overall portfolio impact.

In order to develop meaningful measures, a guideline (often referred

to as SMART) is used to ensure performance measures are: Specific,
measurable, attainable, realistic, and time-bound.

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14. What is the Portfolio Efficient Frontier?

Ans: As a portfolio manager, you should be aware of this

performance management tool. As per the standard for portfolio
management, the efficient is based on Harry Markowitz’s Modern
Portfolio Theory and gives the decision makers the analytical tool
to optimize portfolios given the resource constraints. The portfolio,
is referred to as “efficient” if it has the best possible expected
level of return for its level of risk (usually proxied by the standard
deviation of the portfolio’s return). Diversification may allow for
the same portfolio expected return with reduced risk. It should be
noted that efficient frontiers are not static, and organizations
should monitor cost-benefit ratios on a continual basis.

15. What elicitation techniques did you use to

identify your portfolio stakeholders and
determine their communication needs?

Ans: As portfolio stakeholders and stakeholder communication

requirements change over time, it is important for the portfolio
manager to engage with stakeholders to ensure their needs are
being met and are aligned with the communication management
plan. This may be achieved through interviews,
questionnaires/surveys, stakeholder meetings, and lessons learned
sessions on the effectiveness of communication.

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16. What is a Dashboard? Give examples of
Portfolio dashboards you created?

Ans: Dashboards are an effective way to communicate multiple

messages on portfolio status and trending simultaneously.
Dashboards can show portfolio risks, schedule status, financials,
and portfolio issues.

17. How do you tackle uncertainties in your

portfolio?

Ans: Uncertainty is a lack of complete certainty. Best approach to

manage uncertainty is through proactive risk management, and
identifying potential threats that might occur as a result of
uncertainty. Uncertainty is inherent in the nature of projects,
programs, and portfolios.

18. In portfolio risk management, what is the purpose

of using the weighted ranking and scoring
techniques?

Ans: Weighted ranking and scoring techniques may be used by the

portfolio manager and governance boards to assess the risks in
multiple portfolios and the overall structure of the portfolios. Such
rankings and scoring are applied to any technical and management
risk details during this process. The ranking or scoring is provided by
any group or individual with specialized knowledge or training and is
available from many sources.
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19. What are the key components of the portfolio
risk management plan?

Ans: The portfolio risk management plan describes how risk

management is structured and performed in the portfolio. It is a
subsidiary plan of the portfolio management plan and includes the
following: Risk methodology, roles and responsibilities, risk
measures, frequency, and portfolio risk categories.

20. How well are you prepared to manage a

remote team?

Ans: Some organizations often choose their teams from a global

workforce, and the portfolio manage is expected to manage teams
remotely. You should be equipped with the knowledge and skills to
work with team members virtually.

It calls for a different management technique. Your answer to this

portfolio manager interview question should clearly describe the
portfolio management methodology you may choose to manage
people and resources in a remote environment.

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21. What is the purpose of using sensitivity
analysis?

Ans: Sensitivity analysis helps to determine which risks have the

most potential impact on the portfolio. It examines the extent to
which the uncertainty of each element affects the respective
objective when all other uncertain elements are held at their
baseline values. One typical output of sensitivity analysis is the
tornado diagram; this is useful for displaying which parameters
lead to a high degree of variability and which have less effect

22. What’s your leadership style?

Ans: There are several leadership styles that the portfolio manager
can utilize, each with its benefits and drawbacks. When it comes to
portfolio management, it's impossible to avoid bringing up a
leadership style. A portfolio manager may have to choose how they
lead depending on the portfolio, from top-down to servant leadership.

23. What is your approach regarding managing the

performance of your team?

Ans: This portfolio management interview question will test your

leadership skills. Be thorough about your daily tasks when it comes to
managing your portfolio management team’s performance—for
example, perhaps you hold weekly strategy meetings. You’ll also want
to provide specific examples of how your management style has
resulted in positive team performance.
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24. How should you deal with an underperforming
team member?

Ans: This question should be answered based on your own

experience; you should deal with an underperforming team
member as follows: Informal conversation, understand underlying
cause, offer help, possibility of role change, replace the
underperforming resource.

25. How do you motivate team members?

Ans: Motivation is a key leadership skill. It’s crucial as a leader to

not only ensure your team stays on the right track but also gets
motivated about the portfolio they’re working on. Maybe you give
praise for a job well done as a form of motivation. As long as you
can demonstrate past examples of how you’ve motivated team
members, there’s not a right or wrong answer here.

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