Playing Favorites With The Projects In The Portfolio

 

Back when I was in fifth grade, I was troubled by the suspicion that my homeroom teacher wasn’t assigning grades based exclusively on academic merit. In a foreshadowing of a phenomena I would encounter from then on well into college, I came to believe that she would essentially take a reading of which clique the cool kids belonged to, and grade them more leniently, with the harshest evals going to the un-cool kids, the set that I definitely belonged to. I arrived at my belief after having taken a standardized test and scoring rather highly in three of the four categories, and at-grade level for the fourth, all while struggling in this person’s class. Even in my undergraduate program there was a professor notorious for never giving a man a grade better than C, nor any woman a grade less than B. I finally learned to avoid these frauds when I could, somewhat out of a concern for grades, of course, but more because these people’s whacked-out sense of perspective and proportion pretty much precluded them from having anything useful to teach me. Then there’s also the effect of under-correction where it’s needed makes the target weaker, while over-correction will often make it stronger.

Meanwhile, Back In The Project Management World…

While I do make an attempt to not be as naïve as a fifth grader in my expectations of institutions being managed based on performance or merit, I still find it highly disconcerting when I encounter examples of this not being the case. Unfortunately, virtually everything that I’ve seen written on the topic of project portfolio management addresses things like optimal resource allocation, or how to measure the individual project’s performance, or recommended ways of capturing scope, etc. I’ve never come across any discussions that key challenges of the PM working a project within a larger program or portfolio may have less to do with cost or schedule performance – the meritorious aspects of PM, if you will – and can be more influenced by some of the more gnarly aspects of organizational behavior and performance.

So, in a meritocracy, how should projects be placed hierarchically within an organization’s portfolio? Based on Corner Cube theory[i], the optimal criteria would include:

• Asset Management: how profitable is this project? Note that the Contract Budget Base and Fee amounts are different figures.
• Project Management: how successfully is this project being executed? This matters for a couple of reasons, one, to avoid overruns or delays eating into the expected profits, and two, as an indicator of which kinds of work the organization does best.
• Strategic Management: does this project enhance the organization’s market share in a targeted industry?

At the other end of the scale, some of the sub-optimal criteria for the hierarchical placement of a given project within the portfolio include:

• Does it have a large budget? While large projects are generally good for the organization, one that is performing poorly can easily wreck its home company.
• If the project does have a large budget, is it somewhat routine work? This may be significant if there is a number of highly-placed, highly-paid managers who are not the most talented (think Maccoby archetypes Company Man and Jungle Fighter), but are nevertheless in need of a charge code. If the project is both big enough AND not requiring novel technical approaches to its problems, then it is probably safe to assign this category of manager to it.
• Is it interesting, high-profile work? The gee-whiz factor should never be underestimated when it comes to which projects are perceived to be preferable within the portfolio.

Why does it matter where a given project is placed within the portfolio’s hierarchy? By no means absolute, but generally speaking the higher-status projects have better access to limited resources and greater latitude of managerial action (these projects have an easier time of bending procedures to attain a desired end), both of which are benefits of enjoying higher visibility among the organization’s executives.

As I’ve noted in previous blogs, complaining about such deviations from a merit-based rendering of the project portfolio is most likely futile. The silver lining here is that, if the projects enjoying premium placement within the portfolio are truly there due to the sub-optimal evaluation criterion in the second set of bullets, then they are more likely to attract the (Maccoby archetypes) Jungle Fighters and Company Men within the organization, leaving the coveted Craftsmen and Gamesmen for use on the other work.

Besides, the over-appreciated but under-scrutinized projects are more likely to go off the rails.

[i] Hatfield, M. A. (1995). Managing to the corner cube: three-dimensional management in a three-dimensional world. Project Management Journal, 26(1), 13–20.