Viewing Posts by Jen Skrabak
By Jen L. Skrabak, PfMP, PMP
The #PMLoveStories theme on ProjectManagement.com in February got me thinking about why I love portfolio management.
1. Portfolio management closes the strategy to execution gap
Simply doing projects better by focusing on scope, time and cost is not improving our success rates. It’s time to improve portfolio management by identifying and selecting the programs and projects with the highest value.
2. The portfolio represents your organization’s actual priorities.
Look for the gap that may exist between what the organization’ says its strategy is and what its portfolio does.
By examining your portfolio, you can start assessing how many programs and projects are truly aligned to the organization’s defined vision, mission, objectives and strategic plan. You can see where the resources are focused and what the actual vs. anticipated performance of the programs and projects are.
In the end, you, the portfolio manager, are the conduit to strategic alignment and execution — a powerful role in an organization if done right. The key is to not only know the portfolio’s status, but also to monitor, react to and embrace change so the highest value work is done.
3. Portfolio managers have to think like CEOs.
For portfolio managers, it’s about more than managing or controlling scope, schedule and cost. You are ultimately accountable for the results. You’re empowered to allocate resources (human and financial), and you have the ability to negotiate with and influence executives to determine the path forward. The portfolio manager is the only person who can oversee and communicate the state of the portfolio by aggregating data into actionable information, ensure the decisions are made in a timely manner, and proactively address key issues, risks, and opportunities.
4. Portfolio managers see the big picture.
How would you describe your portfolio personality when you look at it holistically—aggressive, innovative, keep the lights on, or confused? What’s the overall value your portfolio delivers and how did managing it comprehensively boost that value?
When value is not measured by time, scope, and cost, but aggregate and measurable results, it puts different priorities into focus. That drives the identification, selection, and execution of the right programs and projects.
Share your #PMLoveStories!
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 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 Jen L. Skrabak, PMP, PfMP
Seven in 10 organizations have a PMO, according to PMI’s 2016 Pulse of the Profession. That’s roughly the same as what other PMI surveys have shown in recent years. Why has the prevalence of PMOs plateaued? It could be that many people still perceive PMOs as providing low value but high administrative costs while doing little to improve project delivery.
Worse, the general state of project management isn’t improving in spite of this increase in PMOs. Organizations waste US$122 million for every US$1 billion invested in projects, according to the 2016 Pulse report. That’s a 12 percent increase over the previous year.
Why the disparity between project success rates and the prevalence of PMOs? There’s a gap between the vision and reality of PMOs. Here are four reasons why people may hate PMOs—and what PMO leaders can do about it.
1. Redundancy Over Efficiency
I’ve worked in multiple Fortune 100 organizations where there were not just one, but multiple PMOs, that a critical portfolio may have to report into.
There may be functional PMOs (i.e. IT PMOs and/or business division PMOs), capital-planning PMOs, product PMOs, or enterprise PMOs, just to name a few. These multiple layers can cost the portfolio manager tremendous time and energy in trying to manage multiple PMO demands and requests.
There is value in centralizing and standardizing portfolio information and providing visibility to executives to enable decision-making. However, the next time we just start up a new PMO or implement portfolio management processes, we should ask ourselves if there are existing areas that already provide the same type of oversight and control.
2. Bureaucracy Over Execution
In many organizations, it takes a village just to get a new program or project approved. The focus is on the administrative side of things—filling out the right forms and attending the right meetings—and rarely on improving project delivery or execution. If a PMO’s primary focus is on gathering status reports for a dashboard, it loses touch with day-to-day execution.
There is a lot of complexity in organizations that portfolio managers must navigate, and the key is not to add more.
Ask yourself: Is your PMO’s focus on adherence to process and methodology, gates and deliverables? Are you generating voluminous portfolio data without succinct actionable plans that will increase project success?
3. Templates Over Talent
PMOs often focus on generating templates rather than having trained and skilled project managers that can assist in all aspects of delivery, especially enabling organizational change management. Portfolio management processes need to be sustainable and repeatable, demonstrate measurable impact and contribute to project success.
Too often, PMOs focus on the templates to try to enforce the process instead of having the right talent in place to help programs and projects be successful.
4. Tactics Over Strategy
For some organizations, there’s not as much value in tracking schedule and budget adherence as there is in developing the next innovation that will greatly advance strategy.
By definition, strategy changes in response to environment conditions, competitors, or the need to innovate. Is there agility (speed and flexibility) in your PMO processes that allow you to react rapidly? How can you inspire innovation in your portfolio rather than stifle it? Is your PMO positioned to identify the next innovation, and rapidly move it forward? Why not?
Why do people that you have worked with dislike PMOs? How can they be improved? Please share your thoughts below!
By Jen Skrabak, PMP, PfMP
In the first part of this series, I introduced PMI’s new governance practice guide and reviewed basic differences between organizational (corporate) governance, portfolio management governance and portfolio governance.
With that foundation, I’ll now discuss the four basic governance functions, which together can ensure alignment to strategy. Since portfolios include programs and projects by definition, those are not called out separately.
In addition, there are four basic governance domains:
For some portfolio managers, there may be confusion over governance activities versus portfolio management activities. Portfolio managers may play a governance role on certain programs and projects and provide oversight and decision-making. However, day-to-day portfolio management is distinct from governance, as shown in the diagram below:
Look for part three of this series—which will be focused on key success factors—in the coming weeks! And comment below to share your reactions.