How Portfolio Managers Do What the CEO Says
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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.
Posted
by
Wanda Curlee
on: April 01, 2015 07:35 AM |
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Comments (13)
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Well said Wanda.
From what I have seen in a large number of organizations, the following are significant roadblocks preventing Portfolio Managers from implementing the CEO''''s directives.
1. LACK OF SOUND UNDERSTANDING OF PROJECT PORTFOLIO MANAGEMENT (PPM) PRACTICES.
A large number of organizations consider PPM to simply be an aggregation of project and program-level information. Due to this, organizations believe they are implementing PPM, when they are actually not.
2. LACK OF FOCUS ON BENEFITS REALIZATION
A large number of organizations continue to focus on scope, schedule, cost, resources etc and rarely focus on benefits realization. When this happens on projects and programs, it''''s obvious that benefits will not be realized at the portfolio level.
Most Project and Program Managers I have interacted with, have no clue about the benefits that their projects/programs would deliver and how they contribute to the portfolio vision.
3. LACK OF INFLUENCING SKILLS IN THE PEOPLE TASKED WITH INSTITUTIONALIZING PPM
I have noticed that people responsible for PPM lack the influencing skills needed to get stakeholders across the organization to adopt the PPM way of working. Since the PPM way of working requires significant behavior change management, strong influencing and change management skills are a must.
People made responsible for PPM ultimately give in to their bosses, because their priority is obviously to retain their job. This makes organizations do what is convenient to them, rather than what is right for them. What is required is a strong advocate of PPM in the Executive Management, which I have rarely seen.
4. THE BELIEF THAT PROJECTS CANNOT OR MUST NOT BE CANCELLED ONCE STARTED.
I have noticed that organizational representatives find it very hard to either terminate, de-prioritize or de-scope projects, once they have been started. This belief severely impairs PPM and the ability of an organization to meet its strategic objectives within the organizational constraints. Additionally, I have not seen many organizational leadership executives reviewing whether any low priority projects are actually being terminated.
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Prasad - Thank you for your comment. I have found that everything you have said is true in some companies. Or aspects may be true in a company. What drives adoption and good practices is project management maturity throughout the company, including leadership. Leadership is not only those involved directly with project management, and all its aspects, but those that are in the CXO suite, the business unit heads and their direct reports, and functional manager. Without buyin from all areas it is difficult to achieve the results being driven by the CEO.
Alberto Sirvent
Partner Director - Owner.| S&T Consulting - Strategy and Transformation -
https://sytconsulting.com.ar/
Ciudad Autónoma De Buenos Aires, Argentina
Well, this is one of the most important discussions I'ver heard on this site. Wanda your article is given on the target or most of all at the heart of the discussion of the next generation PMOs, because if we really want that a PMO survives in an organization needs to be associated to the strategy execution. Prasad your answer is like a real world discuss this issue right now and sounds like music to my ears. And Wanda, the last sentence you finish your answer to Prasad is the right key for execution: LEADERSHIP . I'll add some other thing: No Fear!!!. Best Regards. You add up an stonishing value to Program and Project Management!!
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Hello Tolitha - Thank you for the comment. I don't know of any documented case studies, but let me do some digging. I will say that when I was at NCR I created a portfolio management office that was tightly coupled with the business unit head. There were many bumps along the road but it worked. Let's say I had to prove the concept.
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Alberto - Thank you for your comments. I try to focus on those areas that are strategic to the project management discipline. Until we are viewed as strategic we will struggle to find ourselves being appreciated.
Thilo Wack
Head of Existing Product and Test Lab| optimed
Tholey-Hasborn, Germany
Implementing strategy is the most important ability of an organization. Realistic goals and the skills needed to get things done must be present at all levels of the organization. CEOs flounder when there is no culture of execution that delivers on promised results. So if a portfolio manager starts to think about what the programs and projects need to deliver and what is in their way and then gets the support to have these impediments removed she/he is actually linking strategy to operations (in its broadest sense including also project work) and will do what the CEO wants to be done.
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Thilo - Thank you for the comment. A strong portfolio manager is needed when establishing portfolios. This is especially true when portfolio management is new to the CEO, the organizations, and or both. When done properly there is a result of an increase to the bottom line.
Thanks again for an interesting comment.
Great, simple and yet insightful.
I always believe that portfolio managers need to handle bigger picture such as strategic objectives of the organization, programs and individual projects and he or she is responsible to ensure that result of each program or project is connected to strategic objective.
On other end, project or program manager are just responsible to deliver result right as per requirements. As Mark said.
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Syed - Thank you for the comment. Program managers are the first step to strategy. A program manager must understand the strategic component to his/her program in order to define and deliver benefits. The portfolio manager is the "strategy" guru within the PM community.
In my opinion the missing link is enterprise architecture. I am beginning to see success using architectural domains to categorize the portfolio. This then provides a catalyst for discussions on domain the domain level governance, strategies, and roadmaps required to define and sequence projects and programs. Basically it is an extension of pick the right project....now it is pick the right project at the right time and in the right sequence.
Sujith Kattathara
Founder, CEO| FreelanceTeams Private Limited
Ernakulam, Kerala, India
Wanda
Thank you for a great discussion.
I believe a logical next step in this discussion may be: What are the most important skills that a successful Portfolio Manager needs?
Wanda Curlee
Dr. Wanda Curlee| PMI
Ferguson, NC, United States
Hello Sujith - Thank you for the comment. I will think about this and include for forthcoming blogs.
Kevin Coleman
Subject Matter Expert, Author, Speaker and Strategic Advisor| - Insights
Pa, United States
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