Benefits of Project Portfolio Management

I was recently asked to present on Portfolio Management and had the opportunity to review and discuss what I have done previously and revisit material from the past. What I found was some summaries on the benefits of Portfolio Management and the comparison with a financial portfolio of investments which I wanted to share. Driving this discipline into an organization takes time but can be accelerated by the understanding and communication of the benefits.

The Benefits of Project Portfolio Management

Many organizations will focus their efforts on the management of each individual projects, but fail to spend time looking and managing the project portfolio itself. The result is losing sight of the larger investment and the ‘return’ on it and narrowly looking at one investment at a time. Project portfolio management attempts to change that attention to ensure the whole investment landscape is seen and make sure that:

The right mix of projects are in the portfolio to maximize overall returns

The project portfolio is comprised of projects that offer widely differing value. Projects vary by their short and long-term benefit, their synergy with corporate goals, and their level of investment and anticipated payback. Taking these factors into account, project portfolio management seeks to optimize the returns of the entire portfolio. It selects the most value-producing projects for execution, ensuring that funds are directed toward deserving initiatives. It also eliminates overlaps and redundancies between projects, saving time and costs.

The risks posed by the projects in the portfolio are balanced

Just as an investor attempts to minimize risk and maximize returns by diversifying portfolio holdings, companies should assess and balance the risks of the projects in their portfolios. A conservative portfolio, like an investment portfolio skewed towards bonds, may minimize risk and preserve principal but it also limits the potential returns of the portfolio. Conversely, an aggressive project portfolio may have greater odds of hitting a “big win,” but at a substantially higher risk of failure or loss. Project portfolio management diversifies the company’s project portfolio, balancing risks with potential returns.

Resources are allocated optimally across those projects

With a limited number of people, all projects must compete for resources. Project portfolio management quantifies, compares and prioritizes projects to help companies identify and staff the most valuable ones instead of unwittingly wasting resources on other, less useful efforts. Through high-level executive oversight, it resolves resource conflicts between ongoing projects. It also incorporates formal sourcing strategies to determine the skill sets needed for each project and the best source of resources.

Performance problems are corrected before they become major issues

Project portfolio management is not the magic answer to eliminate project performance issues but it can give the hope that they will be seen earlier. This saves time and money by having them addressed sooner and keeping the projects on course. In turn that ensures that any dependent projects stay on track as well.

Projects remain aligned with business goals throughout their execution

Project portfolio management provides continuous management oversight, regular communication and coordination, and constant course correction to minimize project drift, re-direct projects when business objectives change and maintain alignment.

Projects receive the support and oversight needed to complete successfully

By elevating the prioritization and oversight responsibilities to the executive level, project portfolio management ensures that projects receive the backing they need to succeed. Executives have the authority and business knowledge to ensure alignment between projects and business strategies; to fine tune the timing and order of projects to exploit synergies, avoid re-works and eliminate redundancies; to optimally assign resources; to direct funds to the most valuable initiatives; and to help resolve critical performance issues.

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Focus please :)

I was reminded the other day from a colleague about how we need to really focus nowadays to achieve great things. Combine that focus with the ability to make bold decisions and work hard and you cant go wrong

Have you noticed how distractible we all our in our daily lives? Our phone buzzes or lights up and we immediately take notice regardless of what else we are doing. And it isn’t just your phone as there are so many other distractions that cause us to switch attention away from what we are doing. This impacts us all at an individual level and we see this manifest itself in the organizations where we work.

When it comes to managing a Portfolio of Projects this behavior means we are constantly having to rebalance where we focus on and has the very real danger that the Portfolio becomes too big to really achieve anything. What I mean by that is that we have our lists of projects that are approved and we are working on and monitoring progress. Then the newest idea comes in and we say yes to that and so add that to the growing project list without stopping or delaying other projects because they are believed to be equally important. Before we know it we have a large list of projects inching along due to resource constraints and we are not able to get the right focus because there is just too many things to review.

There is this constant theme that the business landscape is constantly in flux and we have to change rapidly to keep up with it and this is very true. But we also have to ensure that we don’t loose FOCUS on what is important and what will drive the organization forward. Having a view of the Portfolio of Projects will at least ensure that the scope of work and driving forces behind it are front and center and as leaders we can ensure we don’t get distracted as often as we do.

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Driving change can hurt…

Driving change an anything can be hard and sometimes emotionally bruising. Some time ago I was asked to build out a new Project Management Office which would mean gaining buy in to the discipline of Project Management as well as overcoming the perception that this new department would take over control of projects. The whole idea that another department would now be running projects and assigning resources caused suspicion and distrust within many.

Sometimes the only way to counter that is to make yourself very accessible and approachable, to actively listen to others so that they can see that front and foremost in your mind is your desire to help and assist. Overtime those that met with my team and worked with us became the greatest supporters of what we were trying to do as we help them individually and the company as a whole deliver real value while protecting people from being overburdened with too much work that was impossible to deliver.

In the short term, however, me and my team were easy targets for what could be seen as verbal and written ‘bashing’ with some of the ideas and changes we were suggesting and implementing and in a very public way. Some were quick to judge and slow to change and it was a bruising lesson on implementing change at a pace that many found uncomfortable but a pace that was needed to ensure we all could follow through on what was a helpful and desired change. Those who had done the ‘bashing’ eventually ‘hugged’ us but behind the scenes.

I remember my boss at one point commented on this and sat down and told me seeing the reaction to the change and the toll it would take on myself and my team he would never put anyone in that position again. I am reminded, though, as I embark on true change in an organization that as much as it can be hard to deliver what you have been charged to do that and remember that:

1) the result of your change is meant to help and advance the organization
2) your boss must be your biggest supporter and also your personal therapist
3) change is hard but aren’t the best things achieved through hard work and conviction

The bruises fade and the memories of them too but what you achieve, hopefully. lasts…

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What makes a good Project Manager…

If you look at the constant reports year after year on how projects fail you have to ask yourself what organizations are concluding in how to help prevent that. There was one report a few years ago that stated that organizations who admitted to project failures believed that they needed to bring more structure and process around their project methodology and also to find the right person to lead them. This led me to look at what makes a good Project Manager and I did some background reading with a number of articles to see if there as consistency in what everyone thought.

The conclusion is that the right person is the mixture of Art vs Science and the Leader vs Manager characteristics. These are –

– Art/Leader = vision, communication, interpersonal skills
– Science/Manager = knowledge of methodology, strong analysis, problem solving skills

The research went on to conclude that “project management is the craft of managing tasks and leading people” and that a consistent list of required traits were:

– Self confident, professional, passionate about what they do
– Effective communicator, good listener
– Team player, able to gain respect of project team
– Capable of reacting dynamically, making decisions quickly
– Knowledgeable about project management and methodologies, processes and tools

It looks like a good list to review any Project Management candidates as you go through the hiring process. I will leave you with my favorite quote from the research I did

“Some say the BEST project managers exhibit extraordinary energy levels, phenomenal political skills and an absolute obsession with results.”

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Building a new discipline is so much more…

As I look into forming a Project and Portfolio Management Office I research what others have found and learn what may work by observing. And as I read I find check lists about how to go about forming a PMO and look for consistency and the things I read make sense. They are focused on the discipline of Project Management, the need for executive buy in, organizational structure, key skills and the development and execution of a standard approach that results in better control and reporting on projects.

What is missing is the human factor. We have, in some respects, forgot to observe and look for patterns on responses and reasons why things are what they are. We have forgotten to look back in how a situation occurred and therefore how a practice of behavior has come about. So as I look at a discipline like Project Management, the practice and experience I have learned and others have documented, although useful, doesn’t address things such as lack of trust, little energy to change the status quo, built in organizational barriers and personal experiences around what has been tried in the past. Most of this has nothing to do with Project Management.

To be successful isn’t just about proven check lists and reviewing lessons learned but about breaking down barriers across organizations and building trust that ultimately what we build will help and that we all have a stake in making it so. What is required is truly leadership at all levels to commit to the change, adjust course as we go and recognize that organizational and cultural change is a key factor.

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In Bad Times Inspire…

Projects can either be a good breeding ground for staff to grow or they can ‘find’ people out when you need to see how they cope with stress. Every project will have a stressful moment on it and it may last hours, days, weeks or unfortunately months

I have seen people shrink and disappear into corners and not heard from again until the project is implemented and I have seen others step up, grow tall and power through until the end.

The message I try and give to all on projects is that they will have those days when everything seems to fall apart and the mountains you face unconquerable. You look up and question why you have come so far and have no path to your goal. Those are the times when great project leads make decisions – decisions not about business or technology but about the project team direction and its ability to resolve and move forward. Sometimes it maybe to tell everyone to go home for the day, it may be to convene a small team and brain storm, it may mean escalating to higher powers. But without fail things become clearer the next day, the clouds lift, a path appears and the team takes a deep long breath and can see its goal again.

Always my advice to project teams is accept that some days will seem bad but rest assured the next day will be better and clearer.

It takes a calm demeanor, an ability to share that calmness on the team and to bring the best out of them as a collective group – an ability to inspire.

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People Portfolio

I was talking the other day with a colleague about Project Portfolio management and how many organizations still don’t understand the need to implement a balanced approach to the investment of their resources (money and people) into the project work being undertaken. Coupled with this discussion we chatted about people management and that there is always this push to improve people and turn them all into ‘A’ players.

It got be thinking about the potential of People Portfolio Management and like a typical Project Portfolio how we need to look at our people as a balance of :

1) Those that keep the business running

2) Those who want to grow the business

3) Those who want to transform the business

There is nothing wrong with having people on your team who do a good job day in day out and who ensure the phone gets answered, bills paid, widgets made, sales closed, statements balanced etc and in fact if it wasn’t for them we wouldn’t be able to focus on other forward thinking projects.

There are those who want to push things harder and see things grow and have the drive to do it and lastly the group who truly want to transform an organization and who understand the risk involve but thrive on that challenge.

As you can read the word ‘skill’ hasn’t been mentioned once. In fact the portfolio is about having people perform work they desire to do because as much as certain skills matter it is attitude and drive of people that will deliver results.

Next time you look at your business ask yourself do you have your people portfolio balanced and have them focused on maintaining, growing and transforming.

To be continued…

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Project Terrorist

Have you ever come across that person on a project who seems to have the sole aim to ‘bad mouth’ and poison the projects progress and aims all while trying to be stealth about it and never being quite out in the open?

I have seen this recently and you can spot them a number of ways.

  • They miss deadlines but they always have an excuse around requiring more information that others have to contribute or someone else has to approve their work before they can release it to you.
  • They sit in meetings and pout or just look unhappy and once in a while can’t resist the slight but discernable head shake while you are talking.
  • They make requests for work from others than don’t make sense and try to gather others to justify their demands.

More often than not you have tried to bring them into the team and address this behavior but chances are they just don’t get it, feel uncomfortable in working for the greater good of the project (and ultimately the organization) and also just want to be destructive. Projects are hard enough in the first place to get everyone working as a team but they know it is easier for them to be destructive and then turn around and say I told you so.

Project Managers (as mentioned on many occasions) need to have leadership as a key and overriding skill in their armory. Bringing a diverse and highly skilled group of people together is hard and takes true people leadership to achieve but once done can lead to remarkable things. Having to deal with those who are resistant to working for the team and only consider themselves can be the toughest part of the job but ultimately the most rewarding when you see them come on board and deliver with everyone else. But as with anything on the Project that requires leadership at some point you have to admit defeat and take action to remedy the situation for the greater good. When some act as a Project Terrorist you have to tackle them out and by that (like a poison) they need to be cut from the project. They make still do damage from the outside but less than from the inside.

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Reduce the noise

I was reminded again this week of a couple of things when it comes to focusing on the ultimate goal of your project.

1) Never let the noise around a project distract you from what is the objective of the project and subsequently the tasks that need to be achieved on that path. Internal office politics can make noise around a project but as the Project Manager you have the tools to focus on what is expected. Look at the plan and tasks that must be achieved, keep the issues log updated and escalate any that need to be and above all communicate clearly to everyone involved. Ultimately the Project Manager must keep their head while others around you are losing their’s 🙂

2) As the Project Manager you have to take responsibility for your team when there are issues. You may have no control over what went wrong and you may feel aggrieved that you are blamed but as a leader you have to stand up, accept what is happening, apologize for mistakes (on behalf of the team or your own) and get everything back on track again.

Always remember that you are in that position because of your experience and your ability to lead a team, stay focused and ultimately deliver – never forget.

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The Art of Scolding and Smiling

Great piece as I have seen some who always have anger in their word and it does mean people close up

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