Viewing Posts by Mario Trentim
Troubled Portfolio, Troubled Projects
| Good portfolio results depend on a collection of integrated projects that align with and support strategic objectives. Obviously, poor project performance will hurt a portfolio's goals. What is not so obvious is that troubled portfolios can cause projects to fail. A troubled portfolio environment often results from an organization's misguided knowledge about portfolios. A bunch of projects thrown together doesn't make a portfolio. Through portfolio management, a portfolio should ideally consist of carefully selected, prioritized, monitored and controlled projects, and well-managed resources. If organizations don't have structured portfolios with guidelines and governance, they may, in fact, be creating projects doomed to fail. So the next time you face a troubled project, first assess if the portfolio is the problem. A good sign that you have a troubled portfolio is when you are facing troubled projects repeatedly. If more than 30 percent of your projects are troubled or challenged, you probably have a troubled portfolio. Other signs of a troubled portfolio include:
However, it's not enough to identify a troubled portfolio. You have to know how to fix it. Do you have a troubled portfolio because the projects are troubled, resulting in poor portfolio performance? Or do you have troubled projects because the portfolio is not well-structured, giving birth to projects troubled from the start? It would take many posts, maybe even a book, to discuss and analyze the answers to the questions above. However, here are some straightforward first steps for fixing a troubled portfolio. An executive should:
A portfolio manager should:
To what extent do you think bad portfolio management can doom projects to fail? What first steps do you take when conducting portfolio recovery? |
Build Sponsorship, Boost the Portfolio
Categories:
Portfolio Management
Categories: Portfolio Management
| We've all been there. Portfolio managers have done their job of setting long-term objectives and a clear strategy. Projects have been selected and prioritized. And yet the organization is still having trouble gleaning real benefits — i.e., results that create business value and contribute to its strategic objectives — from projects and, subsequently, its portfolio. This disconnect is often rooted in weak sponsorship, and that's often a result of project sponsors not knowing their roles. When that happens, they aren't able to support projects in a way that aligns a portfolio to the organization's grand strategic plan. Project sponsors are instrumental in a project's selection and categorization, allocating resources, and monitoring and communicating its progress to the highest rungs of an organization. As a high-level decision-maker, an effective project sponsor gives the portfolio more agility and flexibility to adapt and absorb changes. While fostering the right kind of project sponsor won't happen overnight, it can start right away. To do so, executive-level management — many of which could be sponsors — should:
Project managers can also help sponsors support projects better by communicating in the same language. Project managers should translate technical issues (such as scope and deliverables) into tangible business results (i.e., return on investment, profit, revenue and costs) for sponsors. In this manner, sponsors and project managers together can handle the internal environment (project team and processes) and the external environment (organizational structure, strategy and market demands). Do you have strong project sponsorship in your organization? In your experience, can effective sponsorship boost the entire portfolio's performance? |
How Fit Is Your Portfolio?
Categories:
Portfolio Management
Categories: Portfolio Management
| We all know a healthy project portfolio is aligned with an organization's overall strategy. But how do we get there? First, define "project portfolio." A bunch of independent projects does not make up a portfolio — it is simply a group of projects. A portfolio is composed of multiple projects aligned to help the organization execute its strategy. Second, define "portfolio management." Portfolio management enables organizations to identify, select and prioritize the investments that will maximize business value. The major components of portfolio management include supporting strategic objectives, ensuring value creation, prioritizing projects based on their relative importance, managing the flow of benefits and integrating stakeholders around business objectives. Here are a few questions to help determine how well your organization is managing its portfolio:
If some of your answers were "no," don't worry — you are not alone. But implementing good portfolio management can be a great challenge. Enterprise project management professionals usually joke that it is a "simple" three-step process:
Step three, in particular, is very difficult — yet it is the core of portfolio management. Portfolio management is the art of getting more than the sum of its projects' results. To do so, corporate strategies must be laid out clearly. This helps portfolio managers to measure value that would not be generated by any individual project. While software tools make it easier to simulate portfolios to help in decision-making, portfolio management ultimately depends more on governance and appropriate processes than on calculations. The portfolio also needs to be flexible enough to cope with changes in strategy and environment, which is why portfolio managers must perform regular check-ups — a portfolio that fits your organization needs to link to its strategy at all times. How healthy is your organization's portfolio? How do you monitor it? Share your thoughts below, and Voices on Project Management will publish the best response as a blog post. |
Project and Portfolio Managers: What's the Big Difference?
Categories:
Portfolio Management
Categories: Portfolio Management
| Frequently, I hear stakeholders confuse "project managers" and "portfolio managers." The misunderstanding may stem from the fact that although portfolio managers may seem to be higher in the organizational hierarchy, it doesn't necessarily mean that they supervise project managers. Also adding to the confusion is that today's project managers have more business acumen than their predecessors to compete in a global economy. To determine the difference, remember one thing: Portfolio managers help translate an organization's business strategy into a portfolio of projects' benefits and results, which are delivered by project managers and their teams. Therefore, the portfolio manager works in a synergic way with project managers to realize business objectives through projects. A portfolio manager has to answer three questions about every project: 1. Is it interesting? All projects have to create business value. Consequently, alignment between project deliverables and business strategy is essential. By answering if projects are interesting from the point of view of the organization, we are assuring that we have a portfolio aligned with the strategic plan. 2. Is it viable? It is common to have many interesting project possibilities. However, we may not be capable of carrying them out. Therefore, a portfolio manager must determine a project's viability. Do we have the resources? Do we have the technical skills? 3. Should we do it? We may end up with a list of projects that are interesting and viable, but we cannot execute all of them at once. Portfolio managers use scoreboards and other methods such as the analytic hierarchy process to select and prioritize the best projects. To answer these questions, portfolio managers analyze business cases, project proposals and viability studies. Once there is an approved project charter, a project manager takes over to drive the completion of the project on time and in budget and to ensure that the project stays aligned with the business strategy. By the end of the project, the project manager's performance depends on how well he or she planned and managed the project (time, cost, and scope and quality). That is, a successful project would have satisfied stakeholders by delivering what was promised according to the project plan. Considering the performance of a portfolio depends on achieving business objectives through projects, portfolio managers use other metrics to measure success. These include:
Learn more about portfolio management in PMI's Pulse of the ProfessionTM In-Depth Report: Portfolio Management. |
