Project Portfolio Management (PPM) Today

Barrier Breaker

For those folks who are spearheading a PPM initiative, I wonder to what extent they have grasped the true potential of what they are taking on.  So far, my experience is that some folks see it but many do not.  Simply put, a PPM initiative is about breaking down the typical barriers that people face when they try to collaborate across boundaries.

Sure, there's plenty more that PPM provides, such as reduced overhead, repeatability of process, predictability of execution, metrics that are reliable and accurate.  But perhaps the most important facet of a successful PPM initiative is the degree to which the leaders can create a culture of teamwork and out-of-the-box breakthroughs.

While it may not provide the kind of hard, quantifiable numbers that most decisions are based on, the ability to break down barriers leads to breakthrough performance, and PPM leaders are at the forefront of making that happen.  I tip my hat to you all.

Future States Section 2a.

Projects and project clusters function as cross-departmental organizing structures and they often operate across chain-of-command management boundaries.

The PMI defines projects as "a temporary endeavor to create a unique product or service."  While that's certainly not wrong, it falls a bit short of what I would call either insightful or motivating.  It's a bit like defining a human being is "a carbon based life unit that transforms biomass into feces to create energy."  What I want to discuss here is how project clusters create the links, the connectors, the conduits, between people across different departments, skills, disciplines.

To the point: project clusters represent the collective vision of where the organization is trying to go and how to get there.  Like it or not, the project portfolio is nothing short of the vehicle for achieving the company vision.

Moreover, organizations run concurrent projects as a means of moving from a current state to a desired future state.  That is the project portfolio, and it needs to be managed.  Some organizations run hundreds, thousands of projects at any given point in time.  The project portfolio represents the sum total of people, money and vision for moving an organization forward into the desired future.

Organizational change happens through project investments, and a project portfolio represents a path toward creating a future state that exists only in the imagination of project planners.  It is a collective path that operates across organizational boundaries: across departments, across divisions, across company boundaries. 

It doesn't take too much deep thinking to realize that project portfolio performance is critical to company health and success.  And so the question arises: who is responsible for project portfolio performance?  Who is accountable?  How do we know if we're performing well?  Who will define success?  Do we need a CPO?

For more reading on this topic, please take a look at our other papers.

Future States Section 2 (Job Description Syndrome)

2.  Chain-of-command management structures are insufficient mechanisms for creating future states and often create barriers to value creation

People in organizations tend to arrange themselves within hierarchical power structures.  These power structures are intended to enable basic functions, such as decision making, work distribution, information flow, skill specialization, accountability for performance, effective communication.  Moreover, organizations organize themselves into groups with names like departments and those departments are led by department heads.  Typical departments have names like Operations, Sales, Marketing, Professional Services, Customer Support.

So what's wrong with this picture?

To What End?

We gave an online presentation yesterday morning to about 35 folks.  It's an odd way to present because you're talking into a phone, and no one else can talk.  So, you can't hear the audience and you can't see them.  You just have to believe that they are listening and haven't nodded off.

Afterwords, we discussed the content of the presentation around the lunch table here, and we went straight into an internal discussion about the vision of PPM.  How exactly do we describe the "real benefits?"  How do we resonate with someone who just wants to take care of their own little bucket of responsibilities?  What is the difference between Customer Performance and Product Line Performance?

Clearly, I had not been as crystal clear as I had hoped. 

But we concluded on an interesting note: we have to assume that the people we are talking to know that they have a stake in their organization, and that they want to work toward improving the health and capabilities of the whole organization.  That's a pretty big assumption.

Katrina and PPM

Fact: a massive amount of the work that needs to be done as a result of the Katrina disaster will require intense Project Management.  Hundreds, thousands of projects.  Many different organizations and agencies collaborating in a coordinated fashion. Rebuilding, draining, recovering, relocating, funding, etc. 

And all of it will be managed with visibiltiy, clarity, accountability.  Or at least it should.

Why introduce PPM now?

• 3 C’s: Communication, Command & Control
• A significant percentage of the effort going forward is a project and resource management effort – this implies several components
  • Ownership – who is handling what?
  • Coordination – how do the different groups work together?
  • Execution – what needs to be done in what order by whom?
• Different agencies and groups will need to coordinate both internally and externally
  • FEMA, Red Cross, Army Corps of Engineers, Homeland Security, etc.

Here's the problem - we tend to think in a roll-up-the-sleeves, reactive way when we are faced with a disaster.  It's the hero syndrome in full bloom.  "Planning?  Well, we'll get to that.  We don't have time to plan." 

What is the status of that project?

I have now heard the same story over and over again, and I just have to relay this conversation.  It's like being stuck in a time-loop, or in a scene from groundhog day.  It goes something like this:

Mary: So how do you track project status?

Marty: We track time in a system that's integrated into finance.

Mary: But how do you make sure the project plan is current?

Marty: We get together once a month to update the plan.

Mary: How do you update the plan?

Marty: We pull the data from our finance system and update the plan manually.

Mary: So do you replicate your WBS in finance so your actual values are related to deliverables?

Marty: No, we track time to activity codes for cost accounting.

Mary: So how do you reconcile the actual numbers to the plan?

Marty: We don't - we just update the schedule on our understanding of the project status.

Mary: How many projects do you do this for?

Marty: Just the ones we have time to get to.

This is the state of the very basics of Project Management - it's a sorry state.

An Analogy for PPM

At lunch, Tom George and I talked about analogies for PPM.  If project portfolio performance is as important as we think it is, then how do we communicate that to other people?  If everyone runs projects but not everyone goes "duh" when they hear about Project Portfolio Management, how do we make it more obvious?

So, we came up with an analogy - a lunch-time analogy.  In fact, lunch is the analogy.  Just about everyone knows how to make a meal.  Last friday, I made myself a lunch of a turkey and ham sandwich, pretzels and a glass of ice water.  Today, however, we went out to lunch at our favorite Oakland lunch spot (Phoh 84) and therein lies the analogy.  It's one thing to make a meal, it's another thing entirely to run a restaurant.

Nearly anyone can make a meal.  Very few people can run a successful restaurant that serves a good lunch, where all meals must come out right every time: timely, cost-effective, healthy and tasty.

The difference between running projects and project portfolio management is the difference between making a meal and running a restaurant.  Most businesses run their projects like meal-making and not like a restaurant.  Most projects are made one-at-a-time and not as part of a well-conceived menu.  When you allow your project portfolio to be prepared and served like a loose collection of meals, many of them will just simply taste bad.

Great New Blog

ITtoolbox has published my weblog on PPM for IT.  Check it out!

This blog will focus on IT as a launch pad for PPM.  I may post some of that stuff here too.

Future States section 1d.

Projects form temporary investments in skilled disciplines, financial resources and imagined future states.

The key points that are typically emphasized here are temporary, investments and skills.  Sure, most projects are bound by a pre-defined beginning and ending; they require an investment of people's time, money or both; they are temporary by nature and so they require a unique management approach.  These are not new notions.

What is new is the expectation that these investments will deliver an anticipated return that aligns with known goals.  What is new is that managers need to view these investments as fitting into a larger pipeline of projects.  What is new is the expectation that projects fit clearly into the big picture. What is new is that project success can no longer be defined in departmental silos. 

Most importantly, what is new is that management leadership is becoming aware that the performance of the project portfolio has a major impact on company performance, and that "delegating" (abdicating) the management of projects as stand-alone efforts must end.

The People Part, part 2

Now that the combinations and permutations of project teams has been sketched out a bit in the previous post, I want to focus on the people who will create the Project Portfolio Management (PPM) solution.  For the record: these people will determine the success of the PPM solution: they will budget, plan and implement the PPM program; they will establish the systems and processes that govern the portfolio; they will create the team that follows them to keep the system running.  This team will have a substantial and lasting impact on the project teams in the rest of the organization.  This team will answer the questions at the end of the People Part.

It is worth spending time to understand how this team gets created and what it can and must do.  For the moment, I will call this the "core team".  The core team typically starts with one or two intrepid individuals.  These people see the opportunity and set the wheels in motion.  Quite often, they carry it all the way from inception to completion.  At times, they may feel like they are swimming upstream.  Among other things, the core team must do the following:

• define the problem
• define the solution
• articulate the benefits
• develop the implementation strategy
• create and/or maintain the motivation for change
• anticipate and remove the barriers to success
• lead the implementation effort
• establish the ongoing management program

We can spend days, weeks, months, years working on models and flowcharts and requirements (and we will).  These things are critical.  But if the core team doesn't have the skills and the organizational momentum behind them, the PPM initiative will not reach its potential.  This team should have a few characteristics and skill sets:

• leadership
• real world PPM experience
• methodology implementation
• change management
• access to power
• clear vision of the desired future state

Finally, if the core team (the people part) has the vision and motivation, the model doesn't have to be perfect.  It will evolve over time no matter how developed it is when the PPM program starts.  What's needed is a core team that can pull it off.  That team will change the organization for good.