Organizations create their future states through projects & project clusters – the emerging term for this discipline is Project Portfolio Management
Organizations cannot remain content with their current capabilities, products and services. If they do not continue to innovate, improve, and invest in their core of products and services, the market will demand new leadership. "Innovate or die" goes the now popular saying. There are those who will say that innovation can lead to dead ends, but that is the very nature of innovation and does not offer a compelling reason to remain satisfied with the status quo. New ideas do not always work, but they often lead to other new ideas that do work.
Innovation is not the only reason to understand the need for engineering a desired future state. In many cases, just keeping on top of the natural decay or degradation that can come with usage or growth will require organizations to prepare for the needs of the future. Whether it's investments in improved infrastructure or basic maintenance of existing capabilities, organizations that fail to engineer their desired future states will either fail or face restructuring and new leadership. Whether it is a new transportation system or an upgrade to a financial application, organizations must invest in creating their desired future state.
The need for managing change is not an option. It is a basic, fundamental necessity. The world is changing and will continue to change. What worked yesterday may not work tomorrow. In the scope of this paper the term future states means a clear definition of a condition that exists primarily in the plans and visions of those people who take responsibility for planning for the future. A future state usually originates in the imagination of one or more people, and a desired future state should reflect what will be best for an organization as a whole. An undesirable future state represents a potential condition that leaders are trying to avoid.
Once the leaders of an organization agree on the desired future states, the next step is to design and execute a plan to achieve that desired state. An example of a situation that requires the creation of a desired future state: "Today, we are losing money in one of our five product lines due to overseas competition and we can foresee no competition in our four profitable product lines, so we will sell off our non-profitable product line and reinvest the available resources in R&D to develop new product lines that will give us a competitive edge in the future." Another example: "Our market test for the new product line was successful and now we want to ramp up our production 100-fold in the next 12 months to meet demand and capture the market opportunity."
How are these desired future states achieved? Through projects and project clusters. Projects and Programs (project clusters) represent the management control mechanism for driving change. The problem is that organizations lack reliable tools and techniques for managing projects and programs. The research on this problem is extensive and well-quantified. In some organizations, there may be literally thousands of projects running at any given time, and the management controls for this project portfolio are inadequate and often unmanaged. In other words, organizations are not adept at engineering their desired future states and are thus often at risk of ending up in an undesirable future state. Project Portfolio Management (PPM) tools and techniques are emerging now to enable organizations to manage their project portfolios so that they can better achieve their desire future states.
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