4 Tips for Selecting the Right Projects and Programs for your Portfolio

 

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?