Our insights to the world of change that encapsulates Project Portfolio Management
In March 2021 our founding partner Derron Taplin was a subject matter guest speaker at a PMO Virtual Round Table. Hear what he has to say on PMO's, PMO Micro-activities, Portfolio Management, Changing the business and Hearts and Minds.
I was astonished at the response I received…. “I have taken 10% off your bill. WHAT MORE CAN I DO?!
There is real business value and bottom line $ savings to be gained from a well-established PMO. However....
Ever been in this situation? Your CIO, Senior Sponsor, General Manager, or other Executive is coming to your office.
Before I tell you the answer to that question, let me ask you another...
If you are little older then the mobile phone generation you will remember when phones where att ached to the kitchen wall by a long curly wire...
Ever been in this situation? Your CIO, Senior Sponsor, General Manager, or other Executive is coming to your office.
PMO’s come in all shapes and sizes and appear in all market sectors in all types of organisations.
Stakeholders – every project has them and everyone knows they are very important to your projects success.
“We have strong senior management buy-in…”
Project metrics, or Key Performance Indicators (KPI’s) are a wonderful invention!
Ask anyone what is the No.1 factor in a successful project and 98% of people will tell you that...
Acronym’s are great arn’t they? They save us time when typing and talking, and make us sound knowledge about our subject area.
I was astonished at the response I received…. “I have taken 10% off your bill. WHAT MORE CAN I DO?!
My daughter’s excitement was palpable, two of her great loves had arrived at the same time. Her grandmother whom had driven from Norfolk and from much further away, the two feet of snow now lying on the ground all the way from Siberia.
After the five hour drive through the awful weather it seemed like a meal was in order, so with welly boots, hats and scarves, we headed out into the snow and across the quiet and barely passable road to our local pub. We soon found ourselves perusing the menu in the comfort of the roaring open fire. Food ordered, we returned to our conversation, but after a half hour we were back on the topic of food, more specifically, where is it?!
There is real business value and bottom line $ savings to be gained from a well-established PMO. However, it requires a skilful leader of change with the gravitas and tenacity to make this value materialise. If you don’t believe me then look at statistics from the PMI below:
Therefore 59% of PMO's are not aligned to the organisations strategy which a truly successful PMO needs to be.
Success, of course, comes in different guises and “PMO” has become a generic term used to satisfy a wide array of business challenges. However, when Executives are talking about the value of a PMO I believe they are looking for a business advantage, doing more for less and speeding up time to market. So in this context I wanted to share with you my 9 key ingredients for a truly successful centralised PMO.
These points are based on my experiences and successes along with input from others who have solved some of the common enigmas that are faced. However, having this ‘blueprint’ is just the architecture for success. Getting the PMO ‘juggernaut’ rolling by putting this into practice in a busy, complex, often fragmented organisation, is a considerable challenge and shouldn’t be underestimated. Without an “A” team spearheading these changes you run the risk of adding yourself to the 59% statistic.
Hence, pick your partners carefully, as rarely do you get a second bite of the cherry…
Ever been in this situation? Your CIO, Senior Sponsor, General Manager, or other Executive is coming to your office. You have been proactive enough to secure a ‘slot’ with his PA and this is your time to show them what you can do. You can nearly touch that extra fat bonus or maybe promotion if this goes well. So, what are you going to do with your 5 minutes?
Most people will reach for Powerpoint and start composing a complete dossier of all the ‘top’ projects (in their opinion)and grow a 50 page slide deck with text so small on each slide that you would need a magnifying glass to read it. They then convince themselves that 6 seconds a slide is more than enough time with their knowledge of the portfolio and great presentation skills to get through all the slides in the 5 minute slot.
Alas, the meeting is a disaster. The Executive leaves with no meaningful information and has been bombarded with so many facts and figures that the 5 minutes couldn’t end quickly enough.
So what went wrong?
You know how you thought this could be ‘the meeting’ for you? Well the meeting is being hosted by you but is for the Executive. So instead of focusing on what you want to say, you need to focus on what they need to hear. Secondly, humans have a finite capacity for text based information. CIO’s are generally better than most, and they need to be to hold down their role, but everyone responds better to pictures. Half the human brain is dedicated to the task of attaching meaning to visual signals, so we need to tap in to this and exploit it.
We have all seen the growing mass of infographs, well we need to take the concept of these highly visual aids and build a picture of your portfolio. Make this relevant to your audience and present this. Suddenly you have turned the tables from shooting in the dark with your 50 page slide deck of information to a simple to digest picture that fits on one or two pages.
The result is that the Executive sits, ponders and then asks YOU about what he sees as important. As you know your portfolio inside and out you can quickly and easily answer these questions, or take action points. The meeting flows effortlessly, the Executive gets the information he needs and an easy to read ‘takeaway’ of the Portfolio Data. The result is that this meeting is now deemed a success! The Executive feels he has added value, he sees you as a proficient and knowledgeable expert, who is clearly in control and is a ‘safe pair hands’. You hear him joking with his PA that you will be after his job not so long from now……..
Mission accomplished; and it was easier to prepare for, less frantic, less stressful and everyone walked away feeling good about the meeting.
The icing on the cake happens at the end of the day when the Executive finds you at your desk and says “Join me for a drink, I’d like to hear some more of your ideas.”
That is how you tell your CIO about 200 projects in 5 minutes.
What do hotel lifts and airport baggage halls have in common?
Before I tell you the answer to that question, let me ask you another. Take a journey that you walk frequently and estimate how far it is. Got an answer? Good, but you are probably wrong.
Studies have shown that the more familiar we are with a route, the more we overestimate the length of that route. A study of walking students in America concluded that Year 1 students overestimated the length of their walk by 24%, more familiar Year 2 walkers by 33% and seasoned Year 3 walkers by 45%.
Why then, when the distance is the same, do we all exhibit these over estimation traits?
It would appear that our perceptions are based on our memories of that route. A route we have travelled often and are more familiar with has more memory attachments. Hence, as our perception of reality are based on these memories, the route appears longer.
To examine this we need to look no further than a hotel lift. The story goes that a hotel manager, was inundated with complaints about the fact that his lifts were too slow. The people were only waiting a few minutes but their perception of the waiting time was much greater. Unfortunately speeding the lifts up was deemed unsafe so they came up with another solution. They lined the lift lobby with mirrors. As soon as people were given something to do, namely look at themselves in the mirror, they no longer perceived the wait to be too long. Time occupied, goes faster than time waiting around.
This same time distortion perception is used in airports. If you land and get to the baggage claim area before your bag, suddenly you have the perception of waiting ‘forever’ for your bag to arrive. However, if you arrive in the baggage hall and your bag is already there you are amazed at the efficiency of the airport staff. How do they manage to achieve this? Simple, they make sure your walk to the baggage hall is longer than the time needed to unload your bags. So, the next time you are faced with a long walk when you get off the plane, be happy. It makes things go faster and your bag will be waiting!
Unfortunately, this warped time perception makes us very unreliable when trying to estimate work durations for task and activities. Hence, when these estimations are aggregated into a project we end up with a significant shortfall in time allocated to complete that project.
So when planning tasks, activities or projects remember to factor in the time distortion that people have when estimating how long something takes to do. You may also like to read one of my other posts Project Planning – do it but remember humans are fickle which looks at the practical side of how to address this distortion factor.
1 step process to dramatically improve your efficiency.
If you are little older then the mobile phone generation you will remember when phones where attached to the kitchen wall by a long curly wire and were used just to talk to people.
When you went to a meeting you took a writing pen and a notepad and news was provided statically via newspapers and the BBC on television at 10pm. Then along came digital and smart phones and tablets, and provided a shift in availability and accessibility to news, social media, emails, conference calls on the go, and more apps and data than anyone can digest, flooding individuals with vast quantities of assessable information.
This has led to a behaviour shift in how we work, how we focus on work and other activities. We are now expected to multi-task between actual and virtual reality, which unfortunately, we do exceeding badly. Some may think that those growing up with this technology will develop special skills to make them more effective and efficient, but in fact not only does it impact our efficiency but it actually reduces our IQ by up to 10 points, according to research from the University of London.
Now, I’m not suggesting that this digital era is all bad, it is not, and technology can help us achieve some wonderful things, however, we need to be aware of the pitfalls and its affect on us, not just with efficiencies and IQ but also the social impact as well. Have you ever been in a meeting or out socially with someone and they pop their phone on the table? Isn’t this just saying, “Well, I will sit with you but my virtual world is far more important and as soon as it ‘pings’ I’m going to attend to it and ignore you.” This is not only rude but eats into how we can positively interact with others. Everyone wants a great network and is clamouring to have as many ‘friends’ as possible on facebook, or ‘connections’ on LinkedIn, but when presented with the opportunity to really build a relationship we blow it by not doing the one thing everyone wants – to have your undivided attention, even if it is only for a short while.
So, if you want to be more efficient it is easy – switch off your phone, or leave it in your bag when you are with others. Focus on them and their needs and then focus on your report, business case, plan, sale pitch in the same way, without outside influences from social media, email, instant messengers and the like, and suddenly you will achieve better outputs. The virtual world will be waiting to suck up all your time when you next submerge yourself back into it, and you will be surprised how little you have actually missed, it anything at all.
3 Easy steps to justify the time & cost of Project Portfolio Management.
Project Portfolio Management(PPM) is the buzz word for 2018. Everyone wants it but many struggle to get the funding and resources to realise the true value this can bring.
Like many things in this world, if done poorly PPM can become a 'Money Pit' and deliver just a hole in your balance sheet. As such, Executives are cautious of silver bullet solutions, so how do you justify and ensure success of PPM?
Step 1 – Establish the need for PPM: Multi-nationals and large organisations need process to maintain controls and visibility across a complex landscape. Medium to small organisations could also benefit, but the value diminishes as the complexity and volume of projects decreases. Hence, any organisation split across multiple continents, countries or regions is going to have a good business case for PPM. This is driven by the need to manage demand whilst prioritizing, categorizing and delivering programmes / projects in a controlled manner, and ensuring that solutions are not duplicated and synergies are leveraged across the organisation.
Step 2 – Recognise your organisations core business and strengths. Most organisations do not have the resources, skills and experience in-house to establish PPM, if you did you would have probably already set one up, refined it and have an highly optimised “Change the Business” environment in place. As you are reading this it is a fair assumption that you haven’t! Therefore, logic would depict that the fastest and most cost effective way is to buy this service in from an external company who does have this experience, skill and knowledge to drive the initial PPM change requirements and provide training and a steady state environment for internal teams to manage.
Step 3 – Funding the change process and sustaining steady state. Establishing the initial PPM framework and business change should be funded as a project in its own right. As with all projects a robust benefits case must be made to ensure that the cost of the change is recovered and exceeded by the benefits that the project delivers. Delivering the benefits of this project will provide tanigble returns against the execution cost.
All companies are concerned with the operating expense that centralised services like IT, HR, Payroll and PMOs generate once in steady state mode. As such, they come under heavy scrutiny on cost and business value and the associated recharge mechanism to cover this cost. There is no single answer to this enigma, however by spreading the cost by adding a nominal amount to the PC count recharge, or by marginally increasing the recharge cost of the PM’s, provides two ways that the monies can be raised with very little impact to any one part of the business. This obviously needs to be offset by a value proposition showing the tangible benefits that will be delivered by the PMO organisation, with the right external partner this can easily be achieved.
Our consultants have managed this process successfully within organisations on the client side and as consultants. They know “both sides of the coin” of internal funding challenges as well as the high value that can be unlocked by having seasoned experienced people help accelerate success. Because we have this experience and understanding about how PPM can be made reality, and we understand how business leaders view and value their businesses, we can quickly and effectively deliver quick win tangible benefits whilst building a solid foundation for the future.
PMO’s come in all shapes and sizes and appear in all market sectors in all types of organisations. The concept of PMO equalling successful projects is grounded, but only if your have the right PMO, doing the right things, in the right way, with the right people. Here are my 5 top tips for supercharging your PMO to success.
Educate, don’t police : What is better – helping people to get it right so they understand and do it correctly with a sense of achievement and self worth; or chastise and criticise in a public forum in front of their peers and management. I know which approach I would prefer and I know how I would react if I was on the receiving end of a “policing” mentality PMO.
Specialise : PMO’s cover an array of topics and there are some in depth parts that individuals in the team should take the lead on. This enables them to specialise, adding value and credibility to the team, whilst empowering the individual with the accountability of being the subject matter expert. Topics such as PPM Tool management and evolution, methodology and template continuous improvement, reporting and process optimization, all require regular attention and this approach ensures that everyone doesn’t assume everyone else is doing it.
Bend the rules : Being flexible is not something PMO’s do too well. There is a process and methodology framework which is usually spawned from the most significant project at the time of introducing the PMO. The PMO sees its mission as ensuring that all projects executed by the organisation fit into the signed off agreed methodology and go to some lengths to “shoehorn” them all in. This is not helpful, or in the organisations best interest. So be flexible, look at each project, listen to the reasons for deviating from the method and make an informed decision and waiver part of the methodology if warranted. As long as suitable governance is being maintained and the project is not a risk, then it is probably the right decision.
Innovate don’t stagnate : Great businesses don’t stand still, they are constantly innovating, adopting and adapting. If the PMO is going to a valuable business partner it must have this mentality. 20 years ago PMO’s didn’t exist as they do today, so what will they look like in 20 years from now? Innovation will define the PMO of tomorrow and will set you apart from the “pack” today.
Introduce these 5 things into your PMO and you will supercharge it to success, for both you as a leader and your team. And who doesn’t want to be successful?
Stakeholders – every project has them and everyone knows they are very important to your projects success.
But a stakeholder is more than a role on your project organisation, they are first and foremost a person. As such these people have wants, desires, wishes, needs and demands.
They also have personality traits that drive these behaviours and the way they act and react to challenges in their business life. So, you need to spend a little bit of time understanding how each of your stakeholders deals with conflict and negotiation. You also need to understand how you deal with conflict to achieve a harmonious environment and a successful project.
In the 1970s Kenneth Thomas and Ralph Kilmann identified five main styles of dealing with conflict that vary in their degrees of cooperativeness and assertiveness. They argued that people typically have a preferred conflict resolution style. However they also noted that different styles were most useful in different situations. They developed the Thomas-Kilmann Conflict Mode Instrument (TKI) which helps you to identify which style you tend towards when conflict arises.
Thomas and Kilmann’s styles are:
“We have strong senior management buy-in…”
It is not unusual to be greeted with those words at the start of a new client engagement. However as with “ghost” sponsors in projects and programmes, I sometimes find that the so called “buy-in” is not much more than empty words.
Various factors may be suggested to explain this lack of commitment but that in itself is a topic for another day. In this blog, I share a few thoughts on what I believe the role of the Executive layer should be in delivering portfolio management.
Set the strategy, make it clear, make it known: The organisation’s strategic aims should inform its choices on project selection and expenditure. I am often surprised by how common it is for managers to pay scant attention to the organisation’s strategic objectives when selecting or prioritising projects. Without a conscious and deliberate mechanism to test projects against strategic objectives it is no wonder that many organisations have no idea of how or whether their investments in projects and programmes will reap the results not only at the local level, but at the whole organisational level. Of course the issue is compounded by the fact that spending decisions are often delegated to middle managers who are often confronted with the daily realities of tactical issues that need to be resolved. It may be true that “a project, is a project, is a project” but in a world of scarce resources it’s helpful to know where priorities lie.
Project metrics, or Key Performance Indicators (KPI’s) are a wonderful invention!
They allow stakeholders and sponsors to quickly assess the projects under their care and allocate their time to the ones that need their precious time to deliver successfully. Awesome!! Well, it would be if it was that easy.
So, we end up with a dichotomy between fact and being chastised for publishing the truth, and meeting Executives and Managers expectation on what they want to publish due to targets, objectives, political status or career progression.
Good News Reporting therefore becomes the norm, with company Service Level Agreement (SLA’s) metrics tracking statistics of 100% of projects achieving scope, and 90%+ projects achieving time and budget and everyone feeling very happy about the fact. But is value being delivered? Are we really doing our projects so well? Or is the proverb of, lies, damn lies and statistics, really coming home to roost?
The answer to this enigma is actually very easy and straight forward, although as with most change management in large organisations, and particularly with PMO’s, it is extremely difficult to do across a multinational, but it is possible.
Make a policy on what GREEN, AMBER and RED mean to the organisation. Explain clearly why we have each colour and how it relates to each KPI, be it scope, schedule, budget, benefit, quality or others. Care needs to be taken in drafting such a standard to ensure it is a broad enough statement to capture all types of projects, whilst narrow enough so it doesn’t overlap with another definitions.
Re-iterate that RED doesn’t mean bad project management. Personally, I see RED as good project management. It implies the Project Manager understands the reason for having red and is taking a positive, proactive steps to say “Hey, this is not going to plan and I can not plan my way out of this" so an executive decision is required.
Once you have obtained consistency at the project level with a policy, the PMO or other reporting body needs to make a holistic policy about what gets reported to Portfolio Owners and Executives. This could be that only projects of a certain cost, risk, or affecting board members are published, with other projects being “bundled” into a single line item. This will maintain the KPI integrity whilst reducing the data presented.
Alternatively, look at providing Executives with trends of what is happening with their projects, rather than specifics:
- are things are getting better (upward trend);
- are they getting worse (downward trend) or;
- are they staying the same (flat trend).
Good News Reporting, isn’t going to go away overnight but with a proactive approach encompassing a policy or guidance on when the various KPI status's apply, will certainly help turn the tide and provide more meaningful reporting.
Ask people what is the No.1 factor in a successful project, and 99% of people will tell you 'planning'.
So, if this is the worst kept 'secret' in successful project management, why is there still $109m (per $1bn spent) being wasted on project management?
The answer seems pretty clear. We all know the “secret” but we are either not applying it, or when we are, it is simply not executing to the plan. This generally gets labelled as “bad planning” but my experience has lead me to believe that it is not quite that simple.
Lets take a quick look at a typical planning scenario :
- Project Manager gets a brief (hopefully!);
- Project Manager assembles subject matter experts to blueprint a solution;
- Subject Matter Experts estimate their time to execute their deliverables;
- Project Manager aggregates the Subject Matter Experts deliverables into a plan, adds in some project controls and management tasks and….voila! A validated plan emerges and there is great joy in the camp.
(Now, lets not get too hung up on the exact steps, as this isn’t planning 101…)
Here is the problem with the process and why there is an ongoing debate about the Project Manager have topic specific knowledge……..the Subject Matter Experts (like all people) are fickle.
I’m not suggesting they are bad people but what I am proposing is that the exhibit typical traits that inadvertently derail the project. These include:
1. Underestimating the effort – This is exacerbated in technical domains, as specialist are expected to do things quickly because they are specialised, right? Wrong!
2. Bragging rights – Doing it faster and better than others because they want kudos;
3. Corporate pressure – Time boxing deliverables.
4. Assuming it will go right – Bad assumption. Plan pessimistically. Plug and play rarely exist in project land.
5. Multi-tasking across projects – Computers can multitask very well, humans don’t do it so well. Flicking between different projects will considerably reduce productivity.
6. Burnout– Rest key project resources periodically. No one operates at peak efficiency all the time.
7. Administration – Emails, timesheets, project reports, other reports, ad hoc requests, annual leave, sickness, training all take time away from project activities.
8. Team Management – Objectives, team development, education, energizing and motivating the team, work allocation, team meetings also take time.
Add all these things up and you have a lot of variables that are going to impact your perfect project plan. So what do you do? The answer comes in two parts. The first I will call “Containment” as it is a patch to this problem, and the second is “Countermeasure”, a longer term fix.
Containment
Containment is done by the Project Manager. He looks at the Subject Matters Experts deliverable plan and injects a degree of slack into the plan to cater for the inevitable factors above. If you use a factor of TWO (yes, plan for twice what they told you!) then your plan will reflect something close to reality. This will help you manage your stakeholders expectations and also give you some slack for other unseen events. I have used this countermeasure on many projects and it works for corporate projects and resources. Of course, if you are in the luxury of having 100% dedicated resources to your project, with a full complement of Project Support Officers and Administrative staff, then this will probably be unnecessary. However, if you do have that I would very much like to come and work for you please!
Countermeasure
Countermeasure is a cultural change to planning. It is going to allow the project teams to determine the schedule factoring in the disruptions that corporate life brings. It requires the Business as Usual (BAU) time allocation to be estimated by Team Managers / Resource Managers so a level of discretionary time can be calculated for each project member. This will provide a realistic availability model for resources to work on project deliverables. If you are in a multi-national organisation then this level of granularity maybe be difficult, or impossible to achieve, in which case bring it up a level and do your planning based on role availability (Programmer, DBA, Business Analyst etc) rather the individual resources.
Acronyms are great arn’t they? They save us time when typing and talking, and make us sound knowledge about our subject area.
TLA (three letter acronyms!) are everywhere nowadays, especially in IT. Oh, there is another TLA…but hang on, that is a two letter acronym (TLA) but has the same letters as a TLA!!
Project Management Office, right?
Or is it a Programme Management Office?
Or what about a Portfolio Management Office?
Good grief! Will the real PMO please stand up!
First things, first. Before we dig into what these different ‘P’s do, I’d like to suggest we buck the trend in “project land” and use longhand. That’s right, no more acronyms or acronym words (PRINCE2 has a lot to answer for!). This will not only remove ambiguity but will educate and reinforce the correct message with your audience.
From experience I would suggest that most people when thinking about a “PMO” are thinking of a Project Management Office. This concept came from utilising specific skilled or administrative staff to optimise project work for project managers so they could manage more projects. This is a classic optimisation model that moves the work to the lowest common denominator. It is effective, lean and works well where there is a constant demand for project work. The staff in these Project Management Offices are typically titled as Project Support Officers, Project Analysts, Project Planners, Reporting Officers and the like. These Project Management Offices are typically siloed into delivery domains that they support. As such they should be working on, and have details of, all the projects in that domain, which gives the impression that they may be dealing with a portfolio, but they are not. This PMO is purely operational in nature and deals with execution. It has no portfolio or strategy function, although it may provide a consolidated list of projects for Senior Managers in that domain.
Programme Management Offices are the least understood of all the ‘P’s. From my experience and observations this is because programmes themselves are poorly understood. A programme should be a group of related projects that when executed in the planned order provide a beneficial outcome, usually in $ reduction, avoidance or profit. The immediate and obvious value of this Programme Management Office is that some roles in a programme are more effective when operating across all projects. This provides the programme manager with a holistic view and pertinent information effecting the programme. Good examples would be a Change Manager, Risk Manager, Quality Manager and similar roles. Programmes are also operational, the same as projects, as they are executing a change to the organisation to deliver a benefit. Because they are larger they tend to last longer than a project but they still have a start, middle and an end. Therefore the programme organisation is a only a temporary one for the duration of that programme.
And finally to the Portfolio Management Office. In relative terms this is the ‘new kid on the block’. Portfolio Management Offices are what most CIO’s would like the ‘P’ to stand for because it is of direct value to them. However not many organisations actually have this in place today. The Portfolio Management Office is strategic in nature. It doesn’t deal with the execution of projects, although has a vested interest in them, but looks at the value proposition of each of these projects. However, in conjunction with this it also looks at the demand pipeline for projects, and as such has a portfolio. As the financial cost / benefit is a primary factor with portfolios and it has this mixture of projects, they tend to get referenced as investments. These investments need grouping and prioritising and this is one of the key functions of the Portfolio Management Office. Where Project and Programme Management Offices advise and support Project and Programme Managers, Portfolio Management Officers do the same for Portfolio Managers and Portfolio Owners (typically CIOs). As such there is a much higher calibre of resource required in these roles. They need to understand the various levels of strategic planning in the organisation to provide strategic alignment of investments, together with investment risk profile, cost, benefits, global governance (to ensure comparisons between investments are consistent) and provide trend reporting and recommendations to the Portfolio Managers and Portfolio Owners on what should get the limited funds and resources available. Naturally, this also includes cancelling in-flight investments that are failing or where the benefit yield is not going to obtained. Cancelling investments is something that rarely happens until this more complete picture of the investment landscape can be provided. Equally a Portfolio Management Office with it’s more comprehensive view of all the investments will be able to identify duplicate investments, common is large organisations, as well as synergies that can be leveraged.
So the next time someone talks about their PMO, ask them what the ‘P’ stands for and what that means to them, you will then know which 'P' you are talking about.
Share this Blog