What if PPM Was Lost?

 

Just sit right back, and you’ll hear a tale

A tale of a fateful trip

That started from this tropic port

Aboard this tiny ship…

(Opening lines from the theme from United Artists Television’s Gillagan’s Island)

At the risk of alienating many readers, I believe anyone over the age of 30 knows what came about as the result of that “fateful trip.” Seven sitcom actors are “stranded” on Coconut Island, located in Kane'ohe Bay, Oahu, and repeat one of several plots to comic (?) effect for 98 episodes.

Now, back to the real world: what if the current state of project portfolio management theory was utterly lost, unable to overlay any of its prevalent hypotheses onto the tons of facts pouring in from the real world cause-and-effects of the modern macro economy in such a way as to explain them? Would the current array of quants and market analysts inform those who pay them? Would the award-winning economists of this world actually step up and admit that they didn’t know which trends would impact the direction of millions of wealth-creators and in what way in the next few years, months, or even days?

To ask the question is answer it. Of course they wouldn’t. The truth is that modern portfolio management theory can no more “manage” portfolios than they can predict the next incident of Bob Denver's character accidentally thwarting the attempt to get off of the island, and for the same reasons. While significant macroeconomic activity that will impact an organization’s complete listing of projects and assets will inevitably occur, as will incidents of naïve, but well intentioned bumbling from one particular castaway, it’s really quite impossible to accurately describe when, and under what precise circumstances. So, how do you know if your “portfolio management” organization and/or software is truly lost? Here are some hints:

·         The portfolio management function (or software) has no idea of the delineation of the project management and asset management realms.

·         The strategic management function appears to be little more than high-level asset management, or has as its ultimate goal the “maximizing of shareholder wealth.”

·         Your organization has a robust risk management system, and their analysts charge directly to all major projects (this particular one is a dead giveaway).

·         There is no regular, reliable information feed of the status of the organization’s proposal backlog, nor win rates (in dollars) based on customer and type of work.

·         Sadly, another sure indicator that your organization’s portfolio managers should probably take up residence in bamboo and grass huts occurs when they rely on software that is simply expanded versions of platforms that had previously served as general ledger, critical path, or earned value management systems.

I’ve already blogged at length of this inability to quantify the future as many claim to be able to do as part and parcel of their so-called portfolio management systems. So, what’s my alternative? I can capture it in three words:

Robustness in response.

When the unexpected occurs, as it always does, the organization with the best response will always beat out the one without. Is there, then, a systemic way of enacting the Boy Scouts’ motto, “Be Prepared”? Yes, and it lies with the ability to model your organization’s strengths and weaknesses across the three axes of asset, project, and strategic management.

Okay, how does that happen? Well, to get the full 411, you are going to have to purchase my recently-released, must-have book, Game Theory in Management (Gower :Publishing, 2012). Or keep reading this blog – at this rate, I should relay all of the research that went into the book along about 2020.