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An Organization's Intangible Process Assets
Categories:
Program Management
Categories: Program Management
| On the shores of the Sun Moon Lake in Taiwan stands The Wen-Wan Resort, a luxury hotel. It looks like like an ocean liner and is built extensively of glass. The resort is licensed as a 'build-operate-transfer' (BOT) project. That means that after a lease of 30 years, the site reverts back to state ownership, regardless if the operators break even or make a profit. The construction of the Wen-Wan Resort took four years to complete, and was finalized in September 2003. Total construction cost of the 92-room resort amounted to US$67 million. Rooms cost between US$1,000 and US$10,000 per night. Internal ROI will likely be met after about 18 to 20 years, which means that in 2023, the resort's operators could start to make a profit. Program and project managers tend to focus on these quantifiable and measurable objectives. But it can be hard for them to grasp intangible or abstract ideas. Yet it is the intangible that usually informs the core values of any successful company. The intangible part is what we tend to ignore: the organizational cultures and styles. In A Guide to the Project Management Body of Knowledge (PMBOK® Guide) -- Fourth Edition, an organization's shared vision, values, norms, beliefs and expectation is called "organizational cultures and styles." The PMBOK® Guide also says an organization's direction or objectives are usually defined by its enterprise environmental factors. Take The Wen-Wan Resort, for example. The resort's sponsor and president, Wen-Wan Tang, has a unique background that led him to found and operate the resort in a way that gives pleasure to guests and gives back to society. Mr. Tang owns more than 20 organizations. He used the profits from these businesses to fund the construction and development of The Wen-Wan Resort. He believes that if you're successful, you should help improve the society that allows you to enjoy to such success. Mr. Tang sees the resort as a way to help develop the local economy. It not only creates jobs in constructing the resort but also in staffing the resort. Plus, the resort's visitors support local companies and businesses. In this way, Mr. Tang has shown "organizational cultures and styles" by helping to develop the local economy. What are your organizational cultures and styles? Editor's note: Photo courtesy of The Wen-Wen Resort. |
Project Goal Management: A Film Maker's Experience
Categories:
Portfolio Management
Categories: Portfolio Management
| This year, "Warriors of the Rainbow: Seediq Bale," a Taiwanese film, was submitted for a nomination for a 2012 Academy Award, a top movie prize in the United States, for best foreign-language film. Although the film industry is a particularly challenging and unpredictable way to attain success, the process of making the film provides a lesson project professionals in any industry can learn from. Creating this film was like any project -- it faced unique challenges. To start, the Taiwanese box office is small, and the director, Wei Te-Sheng, needed financing for the film. But how could he find sponsors when he was a "no-name" director with a low budget? The answer was obvious: Make a simple, yet successful film to create a good reputation and attract investment. To fulfil this goal, Mr. Te-Sheng directed "Cape No. 7" in 2008. It generated box office returns of more than NT$500 million (US$16,900,249) and won multiple awards. He was now in a position to begin producing his historical epic film. Financing opportunities came easily, and the end product was an film worthy of a submission for nomination to the Academy Awards. Mr. Te-Sheng's progress should be recognizable to any business strategist as adhering to the principles of program management. The goal of Mr. Te-Sheng's program was to make "Seediq Bale," but he had to complete smaller projects to achieve it:
This example reveals a lesson in terms of organizational strategy: Always remember to ensure the benefits of programs and projects align with the company's ultimate objective. Don't be distracted. Have you ever completed smaller projects to prove to sponsors you could make a bigger project work? Read more posts from Roger. Read more on portfolio management. |
Applying Portfolio Management as a Business Map
Categories:
Portfolio Management
Categories: Portfolio Management
| It's the end of the year and many companies are reviewing how they performed over the last 12 months. Portfolio management can help senior managers check how their products or services are performing -- and maximize benefits and opportunities to plan for next year. PMI's Standard for Portfolio Management -- Second Edition defines a portfolio as "a collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives." And "portfolio management is the coordinated management of portfolio components to achieve specific organizational objectives." When we use a portfolio approach, senior managers coordinate how projects and programs are managed and gain deeper understanding of what they mean to the organization. Where I have worked, a portfolio is organized as a collection of business operations that share the same purpose. Portfolio management serves as our business map, where different business packages are laid out according to risk, profit and time. In companies, portfolio managers address products or services according to risk and profit factors. Products or services are divided into four types: · High-risk high-profit · Low-risk high-profit · High-risk low-profit · Low-risk low-profit Taking their payback period into consideration, benefits can be maximized by reasonably allocating resources and financial investment for each of the four types of products/business. For example, products that are "high-risk high-profit" require time to generate high revenue. As for businesses or products that are already generating long-term and stable profits -- those in the "low-risk low-profit" category or basic business -- careful resource allocation should lead to eventual increased revenue. "High-risk low-profit" products should also be given appropriate resources, as long as they bring in certain benefits, such as expanding or maintaining market share, and keeping up with potential competitors. Take computer manufacturer Acer, for example. In the past, Acer has made large profits on PC products of the "low-risk high-profit" variety. By 2008, Acer was about to surpass its main (and only) competitor, Hewlett Packard, as the world's biggest PC manufacturer. But an unexpected competitor arose: Apple. Acer's long-term reliance on this "low-risk high-profit" strategy meant that innovative "high-risk high-profit" or "high-risk low-profit" technology products, such as those that Apple makes, were ignored. Apple topped Acer because Acer failed to plan a complete business map. It didn't manage the risks arising from a "low-risk high-profit" strategy. Acer was only focused on pursuing market share by making and selling cheap PC products. Even when your current business is generating high revenues, you should never ignore business plans and products that are still under development. You should always allocate reasonable resources to these business elements, and never solely depend on your successful products or services. When planning your company's products or services for the upcoming year, be sure to check if your strategic plan is well balanced. Make sure no element of your business is over-exploited and no element is ignored -- no matter how little profit it currently generates. |
Achieving Success through Program Management
| A report detailing the impact of the 2010 Taipei International Flora Exposition estimates that Taiwan brought in more than US$1 billion during the six-month event. These benefits were created by synergy, which was cultivated through centralized program management. What do I mean by synergy? Cross-related projects benefit from efficiency and control when activities are combined rather than performed separately. The exposition is a good example of the kind of synergy that program management should bring -- an example worth considering if you want to manage projects effectively within a program. The event had an organizing committee, which was set up like a program management office (PMO). Endorsement from the International Association of Horticultural Producers (IAHP) gave the organizing committee the freedom and authority to be effective. IAHP provided the committee with clear objectives, which allowed committee leaders to establish concrete goals for meeting stakeholder expectations. The exposition involved 377 projects and more than 23,000 participants. With so many stakeholders involved -- all of whom were eager to stage events, exhibitions, shows and displays -- the event's success required all of their coordination and cooperation. All of these stakeholders' concerns needed to be understood and met. This was only possible through the organizing committee, which worked closely with local tourism and cultural bureaus, as well as the government. The committee had to negotiate, mediate and monitor the projects, and assist the stakeholders to achieve their own benefits, so as to maximize the synergy effect. But it is not just strong, centralized management that ensures a program's success. The program manger must also correctly identify clear objectives around which individual projects are organized. As exemplified with IAHP and the committee, objectives of a program can only be defined from top to bottom, which requires a higher level of governance. Once the objectives of a program are set up, every project under the program shall be carried out in accordance with the objectives to ensure alignment between the execution and objectives. What do you think? Does centralized management ensure a program's success? |
Program Managers as Top Chefs
Categories:
Program Management
Categories: Program Management
| Given the lack of understanding about the work of program managers, I thought it would be helpful to explain their role by using a restaurant as a metaphor. Think of the kitchen as the project management office (PMO), menus as the programs and each dish as a project. The chef is the program manager. The restaurant owner and manager rely on the chef to create the menu, which has to reflect the restaurant's cuisine, but with a range of affordable (yet profitable) dishes. The chef must then supervise and motivate others to cook the dishes. Cooks are like project managers. They're responsible for executing the dishes designed by the chef and ordered by the customers. Other kitchen staff members are like the project team, helping create each dish successfully. Restaurant managers are like general managers in a project setting. They coordinate the different arms of the restaurant, supervise the staff, order supplies, take care of the accounts, pay wages and handle customer complaints. However, they rely on the chef to ensure the restaurant is successful. The restaurant owner, manager and chef meet regularly to discuss business. These discussions are the restaurant equivalent of strategic planning. The chef learns what's required of the menu (or program) and how much money is available to spend on preparing dishes (or projects). In a lot of companies, the owner, manager and chef are all the same person. Yet many people can't successfully perform all three roles. The restaurant owner and manager may want to be involved in the cooking, but it's far more effective if they have the support of a properly trained chef. The same is true in the business world. We need to spend time educating CEOs and general managers about the benefits of working alongside a properly trained program manager. Then we won't just have great restaurants, but great companies. What do you think? How does having a defined role of a program manager help organizations? |