By Jen L. Skrabak, PMP, PfMP
As you reflect on 2014 and prepare for the New Year, consider these eight resolutions for your project portfolio in 2015.
1. Be a portfolio leader. Don’t just manage the portfolio — lead it by thinking in terms of profits and losses. In that sense, how does it compare to other portfolios or business units? What was your 2014 return on investment, and what is your 2015 estimated return? Is this within your organization’s expectations? What projects/programs were a drag and should be stopped? What projects/programs have the potential to generate the most returns and can be a calculated risk? (A calculated risk has a reasonable probability of generating a return; of course, what is “reasonable” depends on your organization’s risk appetite and threshold.) If you were an investor, would you invest in your portfolio? Asking these questions may help you decide what to do differently in 2015.
2. Accelerate the business. Ensure strategic alignment by thinking about your portfolio as dynamic and agile — an accelerator to business goals and objectives. How can you free up resources to innovate rather than just keep the lights on?
3. Sell your portfolio’s value by understanding your audience. Speak the organization’s language while remembering the 5 C’s: clear, concise, credible, creative and compelling:
Clear— Frame the discussion in terms the other party can easily relate to and understand.
Concise— Long decks and presentations will lose your audience. Think elevator speeches: If you can’t sum it up in a sentence or two, it’s probably too complicated to understand. And if it’s too complicated, then you will not have the opportunity to influence, let alone reach agreement.
Credible— Know what you’re talking about and be prepared. This means doing your homework before coming to the table.
Creative— Look beyond the obvious to find the solution.
Compelling— Always know what’s important to the other party and what will drive them to action. Tease out the underlying need instead of only the stated desire. Understand what your bottom line is, and theirs.
4. Establish a culture of innovation. Do this, and you can deliver long-term as well as quick wins.
5. Make data-driven decisions.Look at the facts to drive decisions, not emotions. Don’t get attached to pet projects.
6. Engage with the world.Go beyond stakeholder engagement at work. Don’t forget about yourself, your home and your community.
7. Trust your instincts. If something doesn’t feel right, it probably isn’t. That little voice is an early indicator — listen to it. Sometimes when we forge ahead against our instincts, we find out later that it would have been better to take another course.
8. Find meaning in your portfolio. Your portfolio delivers the impossible — innovative projects and programs that have not been done before. What achievements in the past year were key to the organization, in terms of values, culture and feeding creative juices? How can you do more of that in 2015?
The most powerful — and most commonly misunderstood — measurement of project progress is earned value metrics, the way of measuring actual versus planned progress.
"Earned value" is so attractive because the term conjures positive visions, emotions and expectations on what earned value metrics will do. But in reality, if a project manager does not measure and then present the metrics properly to project sponsors, the numbers can produce unpleasant mood swings, premature celebrations and raging arguments.
I have found that project managers who successfully track project progress with earned value metric share a common practice: They allocate the same effort to the meaningful presentation of earned value and its implementation. Consider these basic tips for making earned value actually mean something:
1. Qualify activities that earn value. One of the quickest roads to failure is to include all project activities in determining earned value. This can set up the false indication of true progress by incorporating administrative tasks like the kick-off meetings, project status meetings and other activities that are not central to actual progress. To avoid misleadingly optimistic earned value, include only core items when determining earned value — for example, high- effort and -risk activities, and external dependency milestones.
2. Set standard earned value ranges. Another common trap in calculating earned value is allowing optimistic or downright untrue declarations of progress. You've all probably heard, "We are 99 percent complete, and all we have left to do is..." time and time again.
To avoid this trap, set up conservative ranges of progress completion. For example, you may set a conservative percentage-complete tier of 75 percent if a deliverable is completed, and designate the remaining 25 percent to the approval process by the project sponsor.
3. Clearly communicate earned value to project sponsors. Speaking of project sponsors, one of my all-time favorite earned value moments occurred recently during the first progress status meeting. After several weeks of high expectations around earned value, the project manager stood up and said, "Our SPI is .92." Needless to say, this abbreviated report of the schedule performance index caused a long silence, puzzled looks and furrowed brows among project sponsors. Avoid such tense moments by communicating to project sponsors, in terms they understand, what earned value can and cannot do. Add relevance and context by combining earned value with other project readout content, and tailor your communications to sponsors through visualization techniques. For example, present a graph showing the schedule of planned value against the actual earned value of these deliverables for the project.
Earned value can be one of the most powerful and revealing indications of true project progress — as long as it is properly determined and presented.
How do you measure earned value? What are your tips in presenting earned value to project sponsors?
If you're new to project management, you might be surprised to learn that some projects -- maybe some of yours -- do not generate any actual profits.
That can make it difficult to demonstrate how talented you are as project manager and how great your project delivery team is. So, how can you show you've created value if you cannot show revenue or profits as a direct result of your project?
Look at ROI in a different light. Instead of using profits as a benchmark, consider intangible benefits, such as cost-savings that will result from the project, or a positive swing in public relations or team dynamics
My team and I were working on a project that involved automating a conference room. A user could walk into the room, push a single button and the automation would do the rest. The project didn't generate any profit, but the feedback from stakeholders was 100 percent positive: My team had created an environment that worked as advertised and made users' work lives easier and less frustrating. And that translated to a huge upswing in stakeholder influence.
When we needed buy-in on the next project, the stakeholders were more than happy to offer support. They even understood if the project would affect them negatively (i.e. space being unavailable for use during project, or a feature being disabled for a short time). It may be hard to say that stakeholders' good graces (for example) increased by exactly 42 percent, but it's very obvious when your ability to influence them has increased. Things seem to just run more smoothly.
Have your projects generated intangible ROI? How have your project teams benefited from it?