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Are Portfolio Managers the Next Chief Strategy Officers?
| A relatively new but increasingly important role is emerging: the chief strategy officer (CSO). From Starbucks to Siemens, many organizations now have a designated CSO. A CSO can be defined as an executive responsible for assisting the CEO with identifying, communicating, executing and sustaining strategic initiatives -- basically, what a portfolio manager does. And I would argue that the next CSOs will come through the portfolio management ranks. Strategy itself is about renewal, and renewal is achieved through transformation. Therefore, a key part of strategy is innovation. That's not just technical or product innovation. It's also managerial, organizational and process innovation implemented through portfolios (and of course, the corresponding projects and programs). As with a portfolio manager, the core responsibilities of a CSO include translating strategy into execution:
There are four main types of CSOs:
What do you think? Are portfolio managers the next chief strategy officers? |
Benefits Realization by Roller Coaster
Categories:
Benefits Realization
Categories: Benefits Realization
| In 2011, a new landmark emerged in southern Taiwan: the E-DA Theme Park. Even today, few know that it was the outcome of a massive town regeneration program. Or that its main backer was one of the most successful companies in the Asian business world: Taiwan-based Yieh United Steel Corp. (YUSCO). The E-DA Theme Park -- and the many development groups behind it -- was an initiative proposed by YUSCO's founder, I-Shou Lin. Mr. Lin committed YUSCO to this venture because of his desire to transform a decaying city: Kaohsiung. Fifteen years ago, Kaohsiung was an industrial center and a major harbor for southern Asia. But in the intervening time, stagnation had set in. The price of land and levels of pay kept falling. And as decline became a long-term trend, the city started losing its population. Mr. Lin thought tourism could regenerate the city. And, as the biggest company in the city, he felt YUSCO had a duty to help. Thirty years ago, Mr. Lin bought land on the nearby Guan Yi Mountain. He purchased it not for a short-term commercial plan, but as a long-term investment. And E-DA Theme Park was just the investment to build on the land. To help him realize this ambition, Mr. Lin found a program manager, Chi-Hwa Yang, who had been very successful in retail, restaurants and construction. After visiting and studying different kinds of tourist centers across the world, Mr. Yang formulated a strategy. To make the best use of the remote and enclosed mountain landscape without disturbing the existing economy of the city, Mr. Yang calculated that two tourist attractions, a theme park and a shopping mall, would fulfill Mr. Lin's vision. The shopping mall would bring in major brand outlets and customers, while links to the theme park and shopping mall would be through the nearby international airport and the existing transportation infrastructure. Tourists drawn to the theme park and the shopping mall would have to use Kaoshiung's hotels, restaurants and other local businesses, safeguarding existing jobs and creating new ones. Due to the limited land available, about 3.7 hectares (9 acres), Mr. Yang folded most of the 50 theme park attractions into several buildings, which allowed the creation of a controlled, comfortable environment for tourists despite the often-scorching sun of southern Taiwan. Mr. Yang also thought the theme part needed something distinctive and decided on a Ferris wheel -- but where it was situated was as important as the iconic attraction. The Ferris wheel was placed directly in front of the hotel, so tourists and hotel visitors could clearly see each other. This initially sparked controversy over lack of privacy for hotel visitors -- but Mr. Yang solved the problem by limiting the wheel operation to the daytime and installing "blackout" curtains for the hotel rooms facing the ride. It worked. When the theme park opened in 2009, the Ferris wheel's glorious, iconic image helped attract a large number of visitors and investors. The Ferris wheel was just one of many decisions that Mr. Yang made the right choice on. For the past three years, many business outlets at the theme park have experienced massive growth. The park is also very popular, getting packed to capacity during holidays. This has meant the hotel occupation rate across Kaohsiung has risen to new levels. And across the city, businesses were not adversely impacted by the new development. Following Mr. Lin's vision, Mr. Yang's out-of-the-way development meant the E-DA Theme Park didn't draw customers away from the city -- rather, it became a destination for tourism, with the city as its base. Furthermore, the rise in tourism boosted local businesses and led to an increase in local property prices and new development. The success of the development groups backed by Mr. Lin and guided by Mr. Yang is a mark of excellent program management. It is also an example of the long-term, wide-scale benefits that when, handled professionally, program management can deliver. Who says business and social responsibility are mutually exclusive? Have you worked on a project where program management benefited social needs and business objectives? |
Manage Risk Like a Formula One Driver
Categories:
Risk Management
Categories: Risk Management
I attended my first Grand Prix in 2000 at the Indianapolis Motor Speedway, and quickly became a Formula One (F1) enthusiast. I have attended several Grand Prix races in Asia, North America and South America; visited iconic F1 destinations such as Autodromo Nazionale di Monza and the Ferrari factory in Italy; and even met a few World Drivers' Champions. Over the years, I have noticed that F1 and project management are very similar. Every race of the season is a milestone. Engineers, designers and mechanics work for the driver, who is always looking to minimize risk and maximize opportunities -- just like the project team and a project manager. Mr. Lauda, with 25 wins, one of the greatest F1 drivers, is well-known by racing fans for two things: his rivalry with James Hunt and his accident on 1 August 1976, during the German Grand Prix Nürburgring. During the 1970s, Nürburgring was the season's most dangerous circuit. It was known as "the Graveyard" and had claimed the lives of five drivers. In the 1976 race, the weather conditions were far from ideal. Mr. Lauda called a meeting with the rest of the drivers to vote to cancel the race. The drivers understood that the Nürburgring ring required perfect weather conditions to be even remotely acceptable in terms of risk. Due to Mr. Lauda's position in the F1 standings, canceling the race would've benefited him, but he was more concerned about the danger. The race went on despite the rain. During the race, Mr. Lauda's car went off the track and his fuel tank punctured, setting his car on fire. He was trapped for almost a minute in a searing inferno before other drivers could rescue him. Mr. Lauda suffered burns to his face and smoke inhalation. As with race car drivers, project managers face risk with different levels of severity. A project manager's risk tolerance level depends on different factors: organizational culture, national culture and experience. It's not only imperative that we provide early identification and assessment of risks -- the point is to know and stick to a risk threshold. We may face hardship for accepting the risk and not being successful, but we need to learn the lesson and move on. As Mr. Lauda said: "I accept every time I get in my car that there is a 20 percent chance I could die, and I can live with [that risk] -- but not 1 percent more." Another lesson in risk management from Mr. Lauda comes not long after his crash. Like a phoenix, 42 days after his near-fatal accident, he went back to the track and kept fighting Mr. Hunt for the championship. The Japan Grand Prix, the last race of the season, would crown the next World Drivers' Champion. Again, weather conditions were poor, delaying the race for several hours. While it was still raining, Mr. Lauda started the race but quit after a few laps. His team was surprised to see him coming back to the pit stop and asked him what was wrong with the car. Whie the car was in perfect condition, Mr. Lauda assessed the risk as too high. And when the team tried to present a technical justification for his quitting, Mr. Lauda told them to tell the truth: that he made the decision based on the weather. He had reached his risk threshold and decided to leave his championship hopes to other drivers -- including Mr. Hunt, who garnered enough points to beat Mr. Lauda and take the top prize. We project managers are paid to decide the future of projects, programs and portfolios. Sometimes, those decisions are difficult to accept -- by sponsors and stakeholders, not to mention ourselves -- but will provide long-term benefits to our organization. And canceling or postponing a project, program or portfolio will not prevent our professional career from progressing -- on the contrary, it can reinforce our knowledge and experience. After the Japan Grand Prix, Mr. Lauda continued his successful racing career and became champion in 1977 and 1984. I have my own experience of approaching risk management by determining the environment and sticking to thresholds. When working on a regional project in Central and South America in 2010, the project faced a geopolitical risk that slowed down progress. But in many countries in the region, 2010 was a presidential election year. This event usually contracted economic activities months before the election and sometimes even after. As elections impacted different countries at different levels, we had to define and implement contingency plans for some; for others, we accepted the risk, and yet for others, we didn't accepted the risk and suspended the project temporarily. How do you face risk? Are you a risk taker or a risk-averse project manager? And how do you define acceptable risk? |
World-Class Lessons from World Cup Coaches
Categories:
Leadership
Categories: Leadership
| Photo: AC Moraes People around the globe are tuning in to the FIFA World Cup. Even overloaded project managers will manage to find time to watch some of the global football championship coverage and root for their team. I can't help but find parallels between what happens on the pitch and some of the challenges we face as project managers. Both successful World Cup coaches and project managers spend a lot of time giving direction to a team to mitigate unexpected events. Here are four lessons to take away from these coaches that could help ensure your project produces winning results in the face of the unforeseen: 1. Set starters and specialists. World Cup coaches know what skills key team members must have to win games. They also have intimate knowledge of their players' skills, capacities, endurance and adaptability to changing conditions. That knowledge allows coaches to pick the players they want to start the game as well as those specialists to enter the field when the key players need support. Project managers should also know who the key team members are to have at the start of a project and the specialized resources -- such as subject matter experts on the business or work planners -- needed toward project completion to ensure success. 2. Be a coach, not a player. One of the more risky tendencies for a coach is to try to teach his own playing expertise to the team members. Yet the best World Cup coaches focus on making the team perform well as a whole, not on providing detailed instruction on ball technique. Specialized coaches (for physical training or goaltending, for example) and fellow team members should provide this detailed level of instruction, leaving the World Cup coach free to direct the overall flow of the game. Project managers can do the same by identifying and employing specialized resources that can assist team members with fundamentals, such as writing good requirements and creating work plans. This frees up the project manager to focus on solving risks and issues across the project. 3. Make sure everyone knows the plays. World Cup coaches go to great lengths to employ existing plays that are a good match for their players. In addition, they spend time creating new plays that can be used in unexpected conditions that can come up during a game. The World Cup coach spends a lot of preparation and practice time with the team making sure the plays are executed in a smooth and efficient manner. Project managers can do the same by identifying the right approaches -- that is, methods, processes and tools -- and spending time with the team to practice the execution of these approaches. 4. Provide feedback on results. At the end of every game, World Cup coaches spend time with the team as well as the media, sharing their thoughts on the outcome of the game. In addition, they will frequently share key decisions and outcomes that resulted in a win or loss for the team. World Cup coaches do this in a manner that reflects the overall effort of the team as opposed to the efforts of a few key players. Project managers should provide this type of feedback at regular intervals throughout the project, especially during project status meetings. Projects also have the equivalent of media attention in the form of sponsors, so project managers should openly provide the same type of feedback on a regular basis. What behaviors and practices have you seen that might help project managers create winning projects? |
Customer Service Lessons -- From a Hospital?
 Recently, my doctor advised me to go in for a minor surgery, so I had the opportunity to visit a clinical lab and stay at the hospital for three days -- an unlikely place to learn some customer service lessons. Before the surgery, I had to undergo blood tests. There was only one attendant at the blood collection center and a long queue. A woman at the back began complaining about the queue until a nurse came out, took that woman to a room and drew her blood sample. This upset others in line and led to more complaining. The manager came out from his office and asked people to calm down. But after time passed with the queue remaining as long and the manager offering another assurance, people became agitated again. This time, the manager told some people they were unnecessarily raising their voices while he was trying his best. This continued until another staff member (possibly late to his shift) came in. This experience made me think: Do mere assurances work all the time? Don't we need to apologize for unfair treatment and take action to correct the wrongdoing? Perhaps our egos do not allow us to do all this. So what does it take to control our ego? After finally getting my test, I scheduled the surgery. The hospital suggested I come in beforehand to complete the formalities of cost estimation and approval from my insurance (a procedure in India for cashless treatment at a hospital). When I arrived at the hospital's insurance counter, the attendant in charge took me to a room, asked me to fill out a form and told me that a few people are involved in the process, so it might take up to two hours. I filled out the form in a couple of minutes and waited for 30 minutes for a doctor to appear. He asked me a couple of questions, filled out the remaining form and gave it to the attendant. She asked me to wait for another half hour while she conducted some office formalities. Half an hour passed and I became restless. I approached the woman, and she promptly explained, "I said it would take around two hours. Hold on for some more time." After half an hour, she appeared, took my signature on a form and asked me to leave. My experience at the insurance desk taught me a simple lesson. If I don't set expectations (as the attendant did), a customer is free to expect anything based on his or her own experience. For better customer service and satisfaction, it is important to set expectations at the beginning and then exceed those expectations. In my next post, I'll discuss the lessons I learned from my hospital stay, and how those could be applied to project management. What customer service lessons have you learned when you least expected it, and how have you applied them in your projects? |