by Jen L. Skrabak, PMP, PfMP
Successfully implementing strategic initiatives is a high priority for most organizations; however, few organizations are doing it well, if at all. In fact, only 10 percent are aligning portfolio management with strategy implementation.
Based on my experience, there are seven critical success factors to align portfolio management with strategy:
1. Agility: This is a broad umbrella for organizational culture and processes that are nimble and versatile. Being nimble suggests speed in reacting and being versatile suggests flexibility and adaptability. It’s crucial to build a nimble and flexible organization and portfolio management processes to take advantage of internal or external changes. Portfolio management must be seen as the enabler of strategic change and anticipate iterative, incremental and frequent adjustments to the portfolio.
2. The 3 C’s: Culture, Change Management and Communications: The “triple threat” of portfolio management is having all three components work in harmony to enable the strategy. Culture can be thought of as the personality and habits that an organization embodies, and although it may be difficult to describe, it can be seen and felt when walking around an organization. It’s been commonly cited that up to 97 percent of the employees in an organization don’t understand the strategy, and over 90 percent of mergers and acquisitions fail due to culture clashes.
Rather than letting culture just happen by accident, organizations should consciously build and shape the culture of the organization. And, of course, the culture must be socialized through communications and change management to not only convey the right messages and keep employees engaged, but also recognize and reward the right behaviors.
3. Governance: Good portfolio management processes ensure these core governance functions are implemented:
· Oversight: Leadership, guidance and direction. The key is being involved (through visible engagement and support in problem solving and removing barriers), not just informed (receiving status reports).
· Control: Monitoring and reporting of key performance indicators, including leading (not lagging) indicators. Too often, portfolio managers report on scope, time and budget status, however, those are all retroactive events. Although course corrections can be made, it is too late to be proactive and, as we all know, it’s easier to stop a project’s problems earlier rather than later. Leading indicators, including risk exposure, incremental value delivered and requirements volatility, are predictive.
· Integration: Alignment to strategy, as well as organizational ownership of the changes that the portfolio is implementing, should be driven by portfolio governance.
· Decision Making: While empowering teams to make day-to-day decisions, broad decisions also need executive and management support to ensure buy-in across the organization.
4. Value: The value to the organization depends on performance of the portfolio holistically, not individual components. It starts with ensuring the right programs and projects are selected. Sometimes, the focus is on an individual project’s ROI instead of the fact that although a project may have a positive return, it should be compared against competing projects’ risk, return, and alignment to strategy.
5. Risk Management: There should be a balance of the negative and positive. Mitigate threats and take advantage of opportunities. Value is ultimately the result of performance x risk/opportunity.
6. PPPM Maturity: Portfolio, program and project management (PPPM) maturity ensures the process and talent exist to deliver the programs and projects reliably. Maturity is not measured by a single dimension such as the success rate of the “triple constraint.” Instead that measure includes speed to market, customer satisfaction and strategy enablement.
7. Organizational Structure: When building an organization to enable a strategic initiative (a type of portfolio), an organization should be defined by verticals of end-to-end processes and horizontal enablers. Horizontal enablers are common support elements that span across the verticals organized by the work instead of the functional area—such as change management, reporting, training.
How do you align portfolio management with strategy? I look forward to your thoughts!
by Taralyn Frasqueri-Molina
In a small business, like a startup, organizational project management (OPM) may seem too big. At a large blue chip, layers of OPM may be standard operating procedure. But what if your org is somewhere in between? On one hand, you're past the days of moving furniture yourself, on the other hand, you're not yet cutting paychecks for 2000+ employees.
First, let's establish that OPM is a good thing. Linking strategy with implementation across an organization to deliver on portfolio promises and realize value is, trust me on this one, a good thing. But OPM at scale is even better. And that is because if you don't scale OPM to where your org is right now, it may seem that OPM is too complex to even attempt at all.
And if OPM is a good thing, then no OPM is probably not so good.
I've seen what happens to a business that doesn't have an OPM strategy in place. The business is moving along successfully but then the stumbling starts, and then maybe stops, but then it starts up again and continues unabated. Teams are frustrated that progress has halted and find they're taking the blame or blaming each other. Leadership pushes the same answers to newly arisen problems—work harder, faster, longer.
The Benefits of Scaling
OPM at scale ensures the strategy that your entire enterprise is about to adopt is the right fit.
Too light (but it may work for a startup), and your undertaking becomes inconsistent, priorities become ever-changing because there's no clear focus. The entire system is not reliable enough to deliver.
Too rigid (but it may work for a Fortune 500), and you may get in your own way with bottle-necking processes, decision-making by committee, waiting for an approval exit gate that never arrives, wasting time because the system is not flexible enough to deliver.
Where too much process is a hindrance (but may work for a large org) and too little is volatile (but may work for a fledgling company), start with some core principles that are key for your org and build from there.
An OPM at scale strategy could look something like this:
At your next quarterly review, examine how your custom OPM framework is doing. Are you all still aligned on, not just the goal of your portfolio, but the goal of your OPM strategy? Ready to go bigger and start maturing your framework? Or instead do you need to scale back?
What experience do you have with implementing OPM to scale?
Want to see a fully baked standardized model, take a peek at PMI's Organizational Project Management Maturity Model (OPM3®).
In my last post, I discussed the importance of getting risk identification right. Now, it’s time to tackle the challenge of qualitative risk analysis—which project practitioners often tend to confuse with subjective analysis.
Objective vs. Subjective Analysis
Subjective analysis is based on personal opinions, interpretation, points of view, emotions and judgment. It is often ill-suited for decision making and, in particular, for risk analysis.
Objective analysis is fact-based, measurable and observable. For qualitative risk analysis that means using scales to evaluate risk, whether textual (low, medium, high), color-coded (green, yellow, red) or numeric (from 1 to 5), or some combination of these.
Getting Qualitative Risk Analysis Right
Consider this all-to-common scenario: In a project team meeting to assess risks, the only available information is the risk name and the words high, medium and low. Because there is no definition on what high, medium and low mean, and because there is not enough information about individual risks, the risk analysis is based on guesses.
So how can project practitioners stop the guessing game and ensure objectivity? Here are seven tips:
1. Consult tools and standards: Qualitative analysis tools are mentioned not only in PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide) but also in PMI’s Practice Standard for Risk Management. For more risk management reference material, check ISO 31000:2009 and ISO 17666:2003.
2. Define qualitative scales in the risk management plan: The Committee of Sponsoring Organizations of the Treadway Commission’s Risk Assessment in Practice has created some good examples of what impact and probability scales could look like. (See pages 4 and 5). You may also want to check the Project Risk Management Handbook: A Scalable Approach (page 20).
3. Gather and document information about identified risks: Interview and involve relevant stakeholders, review lessons learned, document assumptions and information for each risk.
4. Adopt expert opinion, whenever possible: Get a second opinion from more experienced project managers, project management office leaders and other internal experts. If you are not familiar enough with risk identification and analysis for a particular project, hire external experts or consultants.
5. Consider using a risk breakdown structure: Grouping risks in categories helps in identifying root causes and in developing effective responses.
6. Assess probability, impact and urgency for individual risks: Investigate the likelihood of occurrence for each specific risk and its potential effect on project objectives (scope, schedule, cost), documenting the results according to the predefined qualitative scale levels.
7. Prioritize risks using the probability and impact matrix: Rate risks and develop your final probability and impact matrix to determine the need for further quantitative analysis and to plan for risk responses.
Adopting a well-defined qualitative scale and carefully assessing risk data and information will help your team perform better risk analyses. Do you agree with that? Please share your comments and experience.
By Jen L. Skrabak, PMP, PfMP
Most portfolio managers are aware of the importance of aligning their portfolio to the strategy of the organization.
But what exactly is strategy?
Strategy is commonly misunderstood. Sometimes it is used to denote importance or criticality, for example, a “strategic program.” Other times, it may be used to convey an action plan—an organization may say that their strategy is to launch a new key product.
In reality, however, strategy does not denote importance or complexity; rather, it represents the collective decisions that enable the organization to amplify its uniqueness in order to win.
It’s important to think of strategy as having three components:
Definition: The intent of the organization over the long term.
Plan: Clear, concise and compelling actions expressed through a strategic plan and roadmap. Visualization helps to articulate the strategy, and align it with objectives and measurements. Frameworks and tools such as a strategy map, balanced scorecard and activity map help plan the strategy.
Execution: How the organization will achieve its defined plan through its portfolios (and corresponding programs and projects). The portfolio represents the decisions that the organization has made in order to execute on the strategy.
What Strategy IS and IS NOT
The strategy should define for the organization and individuals:
-Where are we going?
-Why are we going there?
-What’s my role?
In my next post, we’ll discuss how to align portfolio management to strategy.
By Christian Bisson, PMP
Standardizing project management across an organization is often met with resistance, as teams are typically eager to customize their efforts based on how they feel is the best way of working. But while there are often adjustments that must be made on a client-by-client basis, there are many benefits to creating a consistent project management experience no matter the endeavour.
A project manager’s life can go from slow and steady to chaotic in a matter of minutes. If you have a common way of working it is easier for colleagues to grab your project for a day and coordinate while you focus on other—often more urgent—concerns.
For example, if your schedule is built using the same tool or template as your coworkers’ projects, opening it up to figure out what’s next is easy. It also keeps your colleague from messing up your well-organized plan, thus making it harder for you to jump back into the project when you’re able.
Shorter Learning Curves
When you hire a new project manager, he or she must learn how the company works—from clients and colleagues to tools and processes—before they can be efficient or add value.
If project management is standardized, it drastically reduces the learning curve for the new hire.
Cooperative Continuous Improvement
For anyone that reads my blogs, it’s quite obvious I’m an advocate of continuous improvement. The best way to do this is by working with other project managers, sharing ideas on how to improve our way of working, our tools, our templates, etc. Having multiple sources of feedback allows for better ideas to emerge and faster fine-tuning.
This is generally overlooked, however, if everyone works in a silo, doing his or her own thing.
Better Client Experience
If a client works with more than one project manager at the same agency, it creates a better experience when documents look the same across projects or communications are handled the same way by different project managers.
What do you think are the key benefits of standardizing project management across organizations? What have your challenges been? I look forward to discussing.