By Jen L. Skrabak, PMP, PfMP
Organizations struggle with selecting the right projects or programs for their portfolios. We see this in project success rates that haven’t increased much beyond 64 percent during the last four years, according to PMI’s Pulse of the Profession® 2015 report). We also see this in the companies that have faded from relevance or been obliterated by the pace of innovation and change—remember Blockbuster, Meryvn’s, RadioShack and BlackBerry?
The challenge is to select the right projects or programs for the right growth, placing the right bets that will pay off in the future. Here are four tips to help you do this.
1. Choose Projects and Programs You Can Sustain.
Know your organization’s current strengths and weaknesses; don’t be overly optimistic. It’s great to have stretch goals, but remember that the benefits of your project have to last.
Don’t forget about culture. Sometimes the primary reason a new project or program result doesn’t stick is that the organization’s culture wasn’t there to support it.
Organizational change management, including a defined communications and stakeholder engagement strategy, is crucial on large-scale projects and programs where hundreds if not thousands of processes may be changing in a short amount of time.
In addition, establishing a culture of project management with engaged sponsors, mature project and program management practices, and strategically aligned portfolios helps sustain projects and increase success rates.
2. Know Your Portfolio’s Upper Limit
Don’t only focus on a portfolio goal such as, “Achieve US$100 million in portfolio ROI in 2015.” Also focus on the portfolio’s upper capability.
The upper limit of your portfolio may be defined by budget, capabilities (skills or knowledge), capacity (which can be stretched through new hires or contractors) or culture (existing processes, organizational agility and appetite for change).
Define your portfolio’s upper limit and the highest resource consumption period and plan for it, rather than the initial ramp. Taking a typical adoption curve for a new project or program, your portfolio upper limit may look something like this:
3. Don’t Be Afraid to Admit Mistakes—and Fix Them Quickly
When we initiate projects and programs, and they’re not performing as expected, how quickly do we course correct, and if necessary, pull the plug? Having shorter weekly or monthly milestones and project durations is better than longer ones.
But are you equipped to act quickly when those weekly milestones are missed? How many weeks do you let a failing project go on, hoping it will get back on its feet, before ending it?
I have seen projects and programs that are not yielding the expected value being allowed to continue. Often, the sponsors still believe in the value of the project, even in the absence of metrics showing financial results. This is why setting clear financial performance metrics and monitoring them throughout development and delivery is so important: they can help project practitioners kill a project quickly if needed.
I once worked for a company that was experiencing 25 percent year-over-year growth for its products. It was a frenetic time of hiring new people, building new plants, and initiating billions of dollars in investment for new projects and programs.
However, when the U.S. Food and Drug Administration required a new warning on one of the company’s flagship products, its sales dropped 25 percent (US$2 billion annually) almost overnight. Projects and programs in flight were asked to take a 10 percent, and then 20 percent, reduction in their spending while still delivering the planned results. Planned projects and programs were suspended.
While it was difficult, the organization passed the test with flying colors. In part, this was because it didn’t spend time lamenting environmental factors but instead worked to address them—quickly.
4. Measure Your Averages
It’s not about the one big project or program success, but the successes and failures averaged over a period of time (say, three to five years). Don’t just focus on the big bets; sometimes slow and steady wins the day.
How do you pick the right projects and programs for your portfolio?
A team goes through five stages in a project: forming, storming, norming, performing and adjourning. The success of a project depends on how much time the team spends in the storming and performing stages. If a team leader is good at managing conflicts, the storming stage can be shortened, and the team can gain more time for performing. That significantly increases the chances of success.
Many authors and PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide) define five techniques to resolve conflicts: withdraw/avoid, smooth/accommodate, compromise/reconcile, force/direct and collaborate/problem solve.
Aside from collaborate/problem solve, in my opinion all the approaches conclude with either one party winning and the other losing, or with both losing. I think these techniques are intended to achieve results only in the short term, and give no thought to what will happen in the long term.
If you use withdraw or force, one person wins and other loses. The winner might be satisfied, but what about the person who has lost? Will he/she not try to recover losses at the next opportunity? In my experience, if you use smooth or compromise, both parties lose by having to give up something that is important to them.
Let’s take a common example: negotiating price with a vendor. A conflict can arise because you both want a favorable price. Suppose you have the upper hand and force the vendor to settle on a considerably lower price than he or she wanted. Have you resolved the conflict? Probably not.
Since the vendor lost in the negotiation, he or she may try to gain back the lost money by working on the lower threshold of the acceptable range, trying to cut corners in the process or production, or using cheaper material. This will degrade the quality of the deliverable. What you think is a win-lose for you could easily become a lose-lose.
The same thing can happen when you negotiate a salary with a candidate, negotiate a promotion/raise with your report, or settle a conflict between two team members by either forcing one, or asking both, to compromise.
Compromise or smooth are even worse, in my opinion. They are lose-lose in the short term and even worse in the long term. That’s because in compromise or smooth, we often sacrifice important things. Later, both parties keep trying to recover the things they compromised away. They repeatedly negotiate with little takeaway. Lots of time is wasted in negotiations and productivity remains low.
I think problem solving/collaborating is the only technique that truly resolves conflicts. The collaboration focuses on the problem and helps solve it to the satisfaction of both parties—and therefore resolves the conflict for good. It’s easier said than done, of course.
I’ll focus on the collaborate/problem solve technique in my next blog. Until then, please share your views. How have you resolved conflict within your team? What were the results in the short-term and long-term?
By Wanda Curlee
In a recent Forbes article, PMI CEO Mark Langley talked about why employees don’t do what their CEOs tell them to on major projects. Mr. Langley said three major factors cause company leadership and other employees to fail to follow the CEO’s strategic lead:
• CEOs are busy and once the direction is given, they are off to the next situation.
• Implementing strategy is difficult.
• Governance is not in place to fulfill the CEO’s direction.
This got me thinking about ways a CEO can use portfolio management as a means to drive direction.
A robust portfolio management office should be the gateway for the CEO’s strategic direction. Ideally, the CEO would set the strategic direction, and the portfolio manager would take this direction and drive forward. Simple, right?
In reality, the CFO, the business unit presidents and other corporate officers on whose support the portfolio manager depends have good intentions, but day-to-day activities can often take over.
To prevent this, the portfolio manager needs the CEO’s backing and needs to regularly meet with him or her. The portfolio manager also needs to understand the strategy, know how to define the strategy into programs and projects, and stay within the budget.
Doing all this at once is akin to a conductor’s role with a symphony. All parts of the orchestra must follow the conductor’s lead. If the brass section plays faster than the string section, the music doesn’t sound good, and some listeners would blame the conductor. The portfolio manager plays a similar role.
Just like a good conductor, communication is key to the portfolio manager’s job. The portfolio manager must know how to speak to the various stakeholders to keep them informed and focused in the correct direction to carry out the CEO’s strategy.
A CFO will want financial information and may become distracted if the portfolio manager discusses scheduling in detail. Corporate officers need strategic information, the program manager needs a mixture of strategic and tactical info, and the project manager needs tactical info and an understanding of a project’s business value. The portfolio manager has to communicate at these various levels many times during the day.
Governance is another key. Governance reviews projects and programs to ensure they meet the strategic goals of the CEO. Those that do not are rejected and are not done. Governance also assists the governance board in determining if the slate of projects and portfolios selected and within the budget allocated are the ones that should be approved. The portfolio manager normally does this for the CEO and presents the slate to the governing board.
Once the projects and programs are approved, the portfolio manager is constantly evaluating the portfolio to ensure it meets the CEO’s strategic goals and reviewing the company’s landscape for newer projects and programs that may need to be a part of portfolio, based on the same strategic goals. In all these ways, the portfolio manager can serve as the conduit for the CEO’s strategy.
As Mark Langley said, it’s hard work. The portfolio manager is ensuring the right work is done while the project and program managers are ensuring the work is done right. Each has to do their part, and each part is hard. But with all in harmony, the organization will better realize the business benefits for more projects and programs.
By Jen L. Skrabak, PMP, PfMP
Portfolio management is in large part about enabling innovation. And innovation starts with creativity. What’s the difference between innovation and creativity? As economist and Harvard Business School professor Theodore Levitt once said, “Creativity is thinking up new things. Innovation is doing new things.”
Because projects and programs are the vehicles for implementing new ideas, creating new products or services and transforming current state, portfolio management enables innovation.
Creativity is not enough (this is the title of an article Professor Levitt wrote in 1963). Put another way, “Ideas are useless unless used” (another Levitt quote). Good ideas must be realized to mean something.
Since project and program management are all about executing a vision, value creation and benefits realization, they provide the natural vehicle for translating ideas into reality.
Portfolio management translates the right ideas into reality within the confines of organizations. It’s about order, process, structure and ROI.
Change Your Vantage Point
Of course, there’s always a danger of too much order and process stifling creativity. So how do we unleash creativity? Sometimes we’re our own obstacle to becoming more creative.
I believe the key to unlocking creativity is to increase our vantage points. A vantage point is just a way of observing our surroundings, facts and other information in order to create our reality.
When faced with a challenge, sometimes our tendency is to trick ourselves to view it as something we’ve seen before. Our brain does this in order to save us time. But this tendency to go on autopilot inhibits new ways of thinking and solving problems.
To see what I mean, get a piece of paper and draw a coffee cup. Did you draw the cup like this?
Most people do, since it’s how coffee cups are usually depicted. Now imagine the same coffee cup viewed from the top down.
Your vantage point matters—it frames the problem, which in turn impacts the solutions you can brainstorm.
Here’s another way of thinking about vantage points. In 2014, there were more than 108 billion business emails sent and received each day. (This doesn’t include instant messages, personal emails, social media messages and other electronic communications.)
We’re all inundated with data, information and images—your brain receives 11 million pieces of information every second from your environment. Yet it can only process 40 pieces of data per second. Which means it has to choose which tiny percentage to focus on, and which huge chunk to ignore.
How you see your reality is a choice.
What you choose to focus on shapes how you perceive and interpret your world. Your ability to train your brain to see other vantage points is critical to innovation and creativity, and ultimately your portfolio success.
Seeing your problems, your business, your team and yourself from different vantage points increases your creativity and innovation and accelerates results. Just like any other skill, creativity is something you can develop over time. Why not start now?
As a project manager, do you realize how many people are observing you? It’s true—in addition to all of our varied responsibilities, we also have team members constantly watching and depending on us for their next moves.
To take advantage of all this attention to benefit the project and organization, a project manager should always remember the three “i” words: help team members improve, be an inspiring professional model, and illustrate project management excellence.
Improve. First, be aware of the wealth of talent your resources hold, as well as what their professional development needs are. You may want to cross-train team members so project activities can continue even if someone leaves the project.
In addition, in some organizations, project managers are asked to contribute to team members’ performance reviews, which gives you another opportunity to suggest areas of improvement. It’s also helpful to pass along training events that you know could interest and enhance the skill sets of your team members.
Inspire. Whether or not members of your team want to become project managers, you should always be a good example of one. How you act on the job says a lot about your profession and your organization, and will be a cue for others to follow.
In addition, you can use your status as project manager to show team members that they can be leaders in whatever position they hold.
Illustrate. Demonstrate project management hard and soft skills. For example, you could show a disorganized team member better techniques for issue and defect logs, or help a struggling team member learn ways to communicate with stakeholders more confidently.
Consistently turning these three words into action takes conscious effort. The good news is that project managers have a fantastic opportunity to be a partner in their team members’ growth.
Do you practice these leadership skills to foster growth in your team members? What other leadership skills would you add to the list?