In a portfolio you have a continuous interaction between the portfolio and its components. The approach is top down when it comes to offering guidelines and approaches and becomes bottom up when the components report status and progress to the portfolio. What is the relation between the portfolio and portfolio components when it comes to defining the performance measures and targets (metrics)?

Portfolio performance management is a top-down process aligned with organizational strategy. The portfolio-level metrics (e.g., ROI, market share) are defined first to measure the achievement of strategic objectives. These high-level metrics and targets are then cascaded down to the portfolio components (programs and projects) as guidelines. The components then establish their own specific, operational metrics that contribute to and align with the overarching portfolio metrics. This ensures that the work being done at the component level directly supports the strategic goals being measured at the portfolio level.

A. Portfolio and component metrics must be related and aligned to ensure the portfolio is achieving its strategic objectives.
C. Metrics are not the same; portfolio metrics are strategic, while component metrics are more tactical and operational in nature.
D. Defining metrics at the component level first (bottom-up) risks misalignment with the organization's strategic goals.

- Project Management Institute. (2017). The Standard for Portfolio Management (4th ed.). Section 5.4, Manage Portfolio Performance, p. 80. The text states, "Portfolio performance management includes defining portfolio performance metrics and monitoring and controlling the portfolio against the defined metrics." Figure 5-10 on p. 81 illustrates the flow from strategic goals to portfolio KPIs to component KPIs, showing a top-down cascade.