Portfolio Execution: Point of View on Contention and Complexity
Effective Project, Program, and Portfolio Management (PPM) enables successful organizational transformations. Demand for project support, however, often outstrips personnel and capital capacity. Other times, portfolios of initiatives are not optimized or aligned. These issues explain why enterprises require a sound approach for validating strategic fit, ensuring functional alignment, and executing with confidence.
The Case for PPM
A portfolio management approach is an essential response to three problems. The first is a steady increase in demand for project support in today's organization. Not every project request can be both urgent and important, making a sensible method for selecting and prioritizing projects necessary.
The Case for PPM
A portfolio management approach is an essential response to three problems. The first is a steady increase in demand for project support in today's organization. Not every project request can be both urgent and important, making a sensible method for selecting and prioritizing projects necessary.
The second problem has to do with lacking visibility into delivery constraints: capital, time, and people. Unchecked resource shifts are not the same as business agility, therefore requiring transparent decision-making to calibrate the portfolio.
The third, most impactful problem is the inability to anticipate cross-functional impacts that many projects have. Think, for example, of the pull on shared resources or projects that cancel each other out. These issues can be helped with integrated planning and effective cross-functional alignment. |
A Closer Look at Typical Challenges
Executing multiple, concurrent initiatives that are supposed to transform an organization brings a unique set of challenges with it. Withou t a practical approach for aligning on outcomes and priorities, your project portfolio's performance may disappoint when the organization doesn't select the right projects, or doesn't deliver projects the right way. These challenges usually arise due to one or more of the following scenarios being present.
Initial Diagnosis
The impact of the problems described before can be consequential. Projects with an unattractive value proposition may be approved and started, resulting in waste. Projects that are already in-flight may continue although there is evidence that their fit (or need) is no longer given. And some projects may be finished, but it is not known if they can deliver the promised benefits.
How can you tell when your organization's PPM approach lacks precision? A few questions to start:
Executing multiple, concurrent initiatives that are supposed to transform an organization brings a unique set of challenges with it. Withou t a practical approach for aligning on outcomes and priorities, your project portfolio's performance may disappoint when the organization doesn't select the right projects, or doesn't deliver projects the right way. These challenges usually arise due to one or more of the following scenarios being present.
- Not having a robust method for choosing projects and re-balancing the project mix on a periodic basis may result in single-voter-issues being given higher than suitable priority. This happens when choice criteria such as strategic fit and ideal priority are left aside. Consequences include, at minimum, contention over capital/people allocations and arbitrary priority shifts. At worst, doomed projects cannot be stopped, even when the benefits hypothesis is no longer valid. The solution: an effective governance approach that continuously answers three questions: Why this? Why us? Why now?
- Giving too much attention to only one kind of complexity can result in considerable project delivery issues. Teams that make coping with delivery complexity the focal point of their work over-index on the 'how' and 'when' (a.k.a. managing the triple constraint). Too little focus on management complexity (the 'why' and 'what') increases the probability of schedule delays, missed benefit, or worse. Especially initiatives with high complexity and uncertainty require a thoughtful implementation approach, phase-based-delivery, making good assumptions, and meticulous management of stakeholders and third-party dependencies. A Project Management Office (PMO) can help when it builds competencies, directs focus, drives alignment, and scales the PPM approach (scroll down for more on PMO's, in particular if you are suspect of their value).
- A typical symptom of organizational disconnects is the lack of cross-functional alignment on portfolio priorities and delivery sequence. Byproducts of this problem are unrealistic assumptions about capacity, capability, and efficiency; random (instead of data-driven) decision-making; and difficulties adapting the portfolio to changing circumstances. A top-down mandate directing functional leaders to play nicely together will certainly help. Ideally, a designated change leader facilitates collaboration across functions through relentless stakeholder engagement, so that all teams can fly in formation.
Initial Diagnosis
The impact of the problems described before can be consequential. Projects with an unattractive value proposition may be approved and started, resulting in waste. Projects that are already in-flight may continue although there is evidence that their fit (or need) is no longer given. And some projects may be finished, but it is not known if they can deliver the promised benefits.
How can you tell when your organization's PPM approach lacks precision? A few questions to start:
|
The initial assessment of an organization's portfolio approach can be conducted informally through interviews, based on a set of principles and questions. A more comprehensive analysis involves reviewing portfolio data, conducting deep-dive reviews of projects, and additional stakeholder interviews. If desired, evaluation criteria can be used to determine portfolio management maturity.
A Blueprint for PPM Excellence
Implementing PPM establishes an operational runway for growth. Tailoring the approach to your organization's needs avoids unnecessary bureaucracy. For example, using capabilities already in place (such as existing teams and meeting cadences) will limit extra investments. Accordingly, the organization will be able to:
A Blueprint for PPM Excellence
Implementing PPM establishes an operational runway for growth. Tailoring the approach to your organization's needs avoids unnecessary bureaucracy. For example, using capabilities already in place (such as existing teams and meeting cadences) will limit extra investments. Accordingly, the organization will be able to:
|
Fundamentally, PPM is organized in three continuous, overlapping phases:
Selection
|
Execution
|
Value Capture
|
There are two bookends to enabling effective PPM: selection/prioritization and value capture of projects. To connect those two, a robust business case management process is critical. Each project opportunity should be evaluated (for approval) and measured (post-implementation) using consistent criteria. These may include total investment value, time needed to prove the benefits hypothesis, benefits, inherent risk profile, execution risks, required expertise, adoption complexity, alignment with corporate strategy, cross-functional impact, run-cost implications, and technology needs.
On PMO's
Occasionally, PMO's earn a difficult reputation when they are administratively too prescriptive (e.g., reporting processes, form submissions, deadline tracking). While some administration is needed in support of effective PPM, a PMO should be a value-add to the organization. Value-add activities include:
On PMO's
Occasionally, PMO's earn a difficult reputation when they are administratively too prescriptive (e.g., reporting processes, form submissions, deadline tracking). While some administration is needed in support of effective PPM, a PMO should be a value-add to the organization. Value-add activities include:
|
Clarity about what a PMO will and will not do is vital to inform its scope (project, program, portfolio) and structure (centralized vs. decentralized). A good starting point to determine which type of PMO makes the most sense is to assess an organization's needs around enablement, controls, compliance, and delivery.
Reference: Levine, Project Portfolio Management