Navigating the Troubled Seas A portfolio management approach Does your organization seem to have too many projects and never enough resources to do many of them justice? Are you concerned that you might not be investing in the right initiatives? How is your project success rate? Are projects delivering the benefits projected at their initiation? Does anyone still remember what those benefits or their key assumptions were? If any of these are questions your organization is struggling to answer, you are not alone. A recent survey of companies implementing enterprise resource projects 51% viewed project implementation as unsuccessful, 46% noted that although the new system was in place the business did not understand how to use the system to improve their business. Of the 56% of respondents of survey respondents had a program management office in place 36% felt their implementation was unsuccessful. In another survey 40% of respondents said their projects failed to achieve their business cases within one year of implementation. What can you do? There is an approach to managing your portfolio of projects and improving your organization's project management muscle that has proven effective for organizations of various sizes and industries. • Assessing the Crew • Understand the mission and the mix • What is your mission and who do you have onboard? "It is not enough to take steps which may some day lead to a goal; each step must be itself a goal and a step likewise." -- Goethe Much has been made of the leadership style of Sir Earnest Shakleton . He embarked on an incredible journey and succeeded in an endeavour of survival that no one would have envisioned. His success can be attributed almost as much to what he did before his expedition in selecting his crew of 27 as how he led and utilized their skills and temperaments as they overcame incredibly unfortunate circumstances. He had a clear mission to cross the Artic Continent on foot. He had to radically change his objective when his ship became trapped in ice before even reaching the continent and then again when the ice crushed the ship leaving him and his crew adrift in extremely inhospitable conditions. He was always clear about his goals and the immediate steps that would become goals in themselves. We have encountered clients and potential clients who want a portfolio approach to choosing and managing their projects who, upon deeper questioning lack clearly articulated business direction. If your business objectives are clear and clearly understood by your team, you have laid the foundation for determining the portfolio of projects that are most likely to lead you closer to those objectives. “If you don't know where you are going, any road will get you there.” said the Cheshire cat to Alice. • Who are your crew and what support do they need? Decades before Peter Block wrote “Stewardship – Choosing Service over Self-Interest” Shakleton understood and practiced “servant leadership”. He understood that he needed to support his men while still being respected as “The Boss.” He also understood the value of those who served the front line explorers such as the ship's carpenter. Service duties were expected of his officers and scientific staff in an age of significant class structure. As circumstances changed, so did the required duties of all onboard. Shakleton did not always base assignments on the individual who was technically best for the job, but on the best mix for team effectiveness. You need to do a similar assessment of your existing project teams and those who should be providing support and guidance (project managers, project assistants, program office staff, accountants, human resource specialists, purchasing agents). Do you have the skills you need to accomplish your business goals and meet the likely challenges? How much latitude do you have to change the core teams and their support colleagues? Shakleton made some crew changes along the journey and even accommodated a stowaway, but was restricted by initial funds and isolation from additional resources from the beginning to the end of his adventure. • Taking the Bow Shot Get their attention and prepare to take action. The bow shot is as much a signal to the boarding party as it is to those getting ready to resist the change. • Centralize all project plans into one project registry Inventory all the projects. And I mean ALL projects. Make it clear that unidentified projects will not be funded. Scrutinize departmental budgets to weed out undeclared projects. The initial inventory should at least tell you at what point in the project cycle each project is at. This information is essential should you decide to “grandfather” from conversion to the new system of projects reporting some projects that are near completion. Get committed action from the executive to re-allocate funds and resources (i.e. skilled people). Any reluctance to change the distribution of money is an indication of lack of will or lack of understanding of those you will need later as tasks become even more unpopular. • Implement simple metrics for project value and health Find early opportunities to demonstrate value based decisions and supportive interventions. Initially, a critical few measures will work better than having a complete picture. The initial funding decisions will determine whether the rest of the organization believes a true change is taking place in how projects will be managed. • Deal with resistance honestly and early Some project team will have their own “honoured” metrics and communications methods; others will use little more than anecdotal status reports. There will be resistance to one system of metrics. This may be viewed as one more administrative task that will steal time from project managers and team doing “real work”. You need to acknowledge these concerns as having a legitimate basis. It is the nature of projects, particularly in matrix organizations to get multiple requests from a variety of stakeholders. Project teams often feel they spend more time justifying their work than actually doing it. Shakleton was brutally honest to those signing up for his enterprise. Here is the brief ad he placed to find the appropriate crew members: “ Men wanted for hazardous journey. Small wages. Bitter cold. Long months of complete darkness. Constant danger. Safe return doubtful. Honour and recognition in case of success.” A well designed set of metrics and project registry can actually reduce the work of project teams in keeping stakeholders informed. To succeed in getting buy-in from your project teams you need to be brutally honest about the pain of transition, make explicit commitments to supporting project teams and visibly keep those promises. A senior leader of one organization promised each project manager that if they provided required information to the projects database and anyone asked for information that was in the database they had the right to refer the requestor to the senior manager. The senior manager also promised that if he discovered that the project manager had not updated the database with the standard information, the project manager could count on a personal visit from the senior manager. • Target deliverables and business benefits for all projects Insist on articulation of measurable deliverables and business benefits for all projects. Get operational sign-off of benefits from functional departments. Establish clear accountability for setting and hitting the target benefits. Project teams are responsible for deliverables; operational sponsors are responsible for benefits. Some projects may submerge at this point. Watch that they don't resurface as “on-going operations”, “maintenance” or “strategic initiatives” that don't require justification. Don't aim beyond your range. Claiming benefits that you are not willing and capable of measuring will contribute to game playing in ranking projects, lost learning and unnecessary finger pointing at project closure. • Adjust your aim by making metrics real and visible Shakleton and his leadership team paid close attention to the mental and physical health of his crew. They needed to abandon some valued instruments or greatly alter their use when circumstances radically changed. They might have done well to have better predictors of changes in their environment but they dealt with the situation at hand rather than dwelling on how they got to where they were. They were unfortunate to encounter an atypical season in a relatively unknown environment. You need a few simple, direct predictors and measures of risk adjusted project value, progress to plan and team health. The instant the program control board shows an inclination to rationalize not using the agreed decision criteria for a particular project, the portfolio management champion needs to challenge them to expose their business and personal assumptions even if this halts the process. You may discover that you are missing links between your key business drivers and your decision making model. If this is the case, be visible about the change and reasons for it. Engage your project teams in surfacing and destroying measures that are not worth the effort to produce them. • Demonstrate your intentions with appropriate behaviour – metrics are for improvement and learning not reward and punishment This is a basic principle of most process improvement leaders from Deming on, however it seems to run counter to organizational behaviour. If you fail here, you have assured failure of the program if not individual projects. Celebrate teams and who cancel projects that would have been allowed to linger, grow out of control or slowly starve to death under the previous mode of operation. Calculate the money such decisions make and provide appropriate recognition. Ensure each team member has the ability to provide feedback and improvement suggestions on all aspects of the program. Provide the resources required to follow-up on this input. Use portfolio measures to determine areas for intervention. Are the predicted number of projects being declined at proposal and feasibility stages? If not, what are the likely causes? Are ideas for new projects being stifled by expecting too much certainty early on? How much could you save by reducing project closure cycle time by 10%? How much non-value-added time is the approval process inserting in the average project life cycle? • Boarding "Make it so." – Jean Luc Picard • Engage project teams Collect percent complete and estimate to complete for all projects if you don't already have time tracking. Commit to protecting teams from the myriad of information requests if they sign up for the programme. Invest in team based training on project management principles and the new methodology. Use these training sessions to obtain early feedback and undocumented team knowledge. • Integrate progress, issue, quality and change request tracking. Use a common set of templates and information flow so teams don't have to provide information more than once and so the PMO does not waste time or lose intelligence through the massaging different formats. • Clearly define who is in command of the portfolio and who needs to decide / approve or be consulted or informed Establish, publish and bless the portfolio management council's mandate. Call this body whatever will give it the appropriate status in the organization's lexicon, but be clear on its authority and impact. Institute the understanding and use of responsibility charts for each and every project. Lead by completing the portfolio council, project sponsor and some of the project manager portions of the template. • Setting the Course • Get an understanding of resource utilization “Goals without means are weaknesses.” - General De Gaulle Where are resources engaged at present? Collect any historical resource allocation records. If none exist, you may require a resource inventory. This is no time to be anal about hours worked equalling payroll hours. Knowledge workers and project managers in particular are likely put in more hours than the standard work day. Look for cases of people being “fractaled”. How productive is someone if they are assigned to more than two projects or multiple concurrent tasks? Machines have set up and tear-down time; so do knowledge workers. Multiple assignments are an indication of high risk resources, possible resource deficits or poorly planned resource assignment. Understand who assigns work before making any assumptions about who should control resources in a projects portfolio environment. • Implement prioritization across the board Prioritization needs to be simply, visibly tied to business imperatives. Understanding the Mission and corporate environment are important prerequisites to any prioritization scheme. It is not unusual for our clients to discover a need to clearly articulate (and remarkably sometimes, formulate) their business climate and strategy at this stage. Opportunities must be risk adjusted based on the organization's risk tolerance. The Project Management Institute's “A Guide to the Project Management Body of Knowledge” (PMBOK® Guide) emphasizes that risk is uncertainty about both opportunity and threat. Many organizations focus mainly on reducing the possibility of threats to project success. Portfolio and project risk strategies that maximize the impact and possibility of opportunities should also be deployed. • Kill projects; not teams Implement gate reviews. Understand both the typical project lifecycle as well as the development approach most appropriate to your industry or organization. Create go / no go decision gates. Invest by phase. Set reasonable guidelines for project and phase estimates based on the typical planning fog for projects in general or the types of projects or project methodology you intend to employ. Your project management consultant can help you with this if you don't have the expertise in-house. Demonstrate saving and celebrate teams for recommending project shutdown. Create a portfolio contingency budget that recognizes that not all good project ideas happen at the start of the budget cycle and that not all initiated projects will survive to implementation. Create a safe exit from teams. Celebrate learning (on and off teams). • Stabilizing the Ship Building operational readiness and capacity for growth in project and portfolio management. Much has been written outside the project management world about knowledge management and knowledge workers It basically boils down to growing the collective knowledge of individuals, capturing it so it does not walk out the door each night and using the knowledge wisely to improve your business. Easy access to the historical records, standard practices and experience of other teams and team members combined with feedback loops for improving the project and portfolio processes are two design principles common to all successful portfolio management systems. • Make the methodology accessible Invest in a common information sharing infrastructure. Ensure all stakeholders have access. There are a number of off the shelf collaboration tools available but you may discover that your organization's intranet, databases and email systems may be sufficient to your needs. Ease of use in project methodology will lead to a greater level of compliance, smoother process improvements and clearer comparison of portfolio projects. • Build feedback loops and intrinsic rewards for improvement A feedback button at the same spot in each screen on your project system screens is a first step. Staffing the feedback sufficiently to provide quick acknowledgement and follow through of improvement suggestions will pay productivity and team development dividends early in implementation. Peer recognition and support for sharing best practices, worst practices and improvement ideas tend to be cheaper and longer lasting than monetary incentives. • Imbed reusable templates Reusable templates and checklists increase the value of the new methodology for project teams and improve project comparison for project investors. Access to actual gate presentations, status reports, change requests and project reviews is more powerful than just providing blank forms with instructions. • Invest in human and structural intellectual capital Human capital = your people. Knowledge workers often perceive appropriate training as a reward. The more control they have over their choice of learning, the more likely they will see learning as a benefit rather than a requirement. Structural capital is simply the knowledge left in your organization when all you people have gone home. It is not enough to bury projects history in corporate databases; the information must be easily accessible and comparable. The more project data is used for decision making, the more likely the organization's project management knowledge muscle is to grow rather than atrophy. The Robbins-Gioia Survey (2001) The Conference Board Survey (2001) Shakleton was often referred to as “The Boss” “ The Endurance ”, Caroline Alexander page 23 and others ibid. Two recommended readings are “Intellectual Capital” by Thomas A. Stewart (Doubleday / Currency, New York)ISBN 0-385-48228-0 and “Slack” by Tom Demarco, (Broadway Books, New York ISBN 0-7679-0769-8) End Notes: For background on Shakleton's amazing adventure in overcoming adversity and ensuring the safety of his entire crew, read “The Endurance” by Caroline Alexander with astonishing photographs of Fran Hurley (Alfred A. Knoff , Publisher, New York ISBN:0-375-40403-1) or watch the IMAX production “Shakleton's Antarctic Adventure” There are numerous other books and movies about this adventure. These are the ones the author has read / viewed. You can easily draw your own leadership conclusions from a straight account of the voyage and rescue of Shakleton's crew or you can read one of the popular management books like “Shakleton's Way” by Margot Morrell or “Leading at the Edge: Leadership Lessons from the Extraordinary Saga of Shackleton's Antarctic Expedition ” by Perkins, Holtman and McCarthy. I recommend reading “Stewardship - Choosing Service over Self-Interest” by Peter Block (Berrett-Koehler Publishers ; ISBN: 1881052869)
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