Benefits of Social Collaboration


The Potential for Social Collaboration

Innovation is a hot topic in business right now with an ever growing need for companies to deliver better products and services.  A key ingredient for fostering innovation is enterprise collaboration. Until a few years ago, collaboration was often limited to smaller teams, but this could introduce a higher risk of duplicative efforts occurring simultaneously in larger companies. With the development of enterprise social networks (ESN’s) comes improved collaboration to include all employees across all organizations thus significantly increasing innovation and quality across the company.

The promise of enterprise social collaboration comes from the power of the network with the ability to tap into the collective brain trust of the organization. The potential payoff for corporations is enormous as indicated by a 2012 McKinsey report identifying a potential for over $1 trillion in new business value to be created annually through the use of enterprise social networks (e.g. improved product development, work efficiencies, etc.)

Social Collaboration for Portfolio Management (PPM)

The 4 C’s of Social Project and Portfolio Management

In the context of project and portfolio management, social tools impact employee connection, communication, collaboration, and community (also known as the 4 C’s).

  1. Connection

The power of the network begins with having the right connections in the organization. Social tools enable employees to connect with a broader group of colleagues than would otherwise occur in day to day work. User profiles provide additional detail around work history, education, and other personal information that foster stronger connections on a professional and personal level. Project managers with a larger number of connections have a greater pool of resources to choose from when building out their project team as well as quickly identify subject matter experts to assist in critical phases of work.

A good project portfolio social platform can also alert users of other people who have managed similar risks and issues, or have worked on similar product lines or IT systems. By making these types of connections, project managers can reach out to the right people at the right time for help and leverage proven solutions rather than losing time developing a duplicate solution that already existed.

  1. Communication

Email is still the predominant form of business communication (per Email Statistics Report, Radicati) with over 100 billion business emails sent each day. Tremendous amounts of business knowledge is trapped in the inboxes of employees and is not searchable by other knowledge workers who would benefit from accessing those key conversations. Alternatively, conversations, discussions, and answers to questions within social platforms become searchable content that is continually being enriched by the users of the social platform. Project teams can proactively search for new information to discover other teams that have encountered similar challenges, learn how they solved problems, and re-use successful solutions. This fosters further communication and improves project delivery and quality.

  1. Collaboration

One of the promises of enterprise social networks is the ability for a broader group of people to work collaboratively within and across project teams. At the portfolio level, the quality of new project proposals increases substantially when employees can collaborate (“crowdsource”) on new ideas; great ideas can generate a lot of traction and be improved even before reaching a governance committee. At the project level, team members have greater visibility of work in progress and can comment on deliverables and other project work. These comments are made visible to other team members who can further build upon those comments to improve the overall quality of the work.

  1. Community

In addition to improving communication and collaboration at the project level, social communities can spring up around areas of common interest where participants can ask questions, share ideas and learn from one another. This further strengthens connections, communication, and collaboration. One example is a project management community of practice that can promote project management best practices across an enterprise. This not only uplifts the quality of project management within the company but creates a way for senior project managers to share valuable experience with younger project managers, who in turn, have more opportunities to develop and grow in their profession.

Challenges to Social Collaboration

The top two challenges to successfully establishing social collaboration are developing a collaborative culture and sufficient leadership engagement with social tools. In actuality, senior leadership is responsible for both.

Large scale social collaboration cannot and will not occur without an organizational culture of collaboration. Unless senior leadership fosters a culture of collaboration, most employees will be too focused on their day to day work to devote any attention to collaboration. Without this culture, there won’t be any true incentive to collaborate and any encouragement to use social collaboration tools will feel like a tax on people’s time to switch back and forth between traditional email and new social tools.

Additionally, senior leadership cannot merely sponsor a social collaboration initiative; rather, they need to lead by example to use the tools, which will have a powerful effect on the organization. When senior leadership demonstrates greater transparency and communication through the use of social tools, the rest of the organization will follow suit.

My Perspective

Changing an organization’s culture and the behavior of senior leadership are both very difficult. Only a concerted effort of organizational change management can redirect a company toward collaboration. Such change must be of high enough priority that it affects the daily behavior of senior leadership to embrace enterprise social networks. Based on Dr. John Kotter’s change model, senior leaders need to establish a sense of urgency around social collaboration. There must be a powerful guiding coalition to create a shared vision and communicate it across the organization. Then, both leaders and employees must act on the vision and rally around demonstrative, short-term wins.

The Bottom Line

Enterprise social networks have tremendous potential to improve project and portfolio management effectiveness—but only when the company possesses a culture of collaboration. Senior leadership is uniquely responsible for ensuring that such a culture exists before implementing social collaboration tools and must lead by example to improve adoption. With strong leadership and a collaborative culture, your organization can reap the many benefits of social collaboration in the context of project and portfolio management. This will result in a smarter and healthier company.

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Strengthen Talent Management With PPM


Talent Management3Is It Just About Talent Acquisition?

When people refer to the “war for talent” many discussions center on talent acquisition and try to answer the question “how do we hire the best people?” Although talent acquisition is important, talent development and retention are also very important (you want to keep those great people you hired, correct?). Hiring good people is not the most challenging part; because the war for talent is real, retaining talented people is difficult. This is where project portfolio management (or “PPM” for short) strengthens the traditional HR approach to talent management.

In a recent LinkedIn discussion, Emily Smith asked a broad question on how PPM software can impact unemployment rates. My response was that portfolio management as a discipline and PPM software with the right data can significantly improve talent retention and development.  Before we continue down this path, let me quickly summarize project portfolio management. PPM is firstly about doing the right work to accomplish strategic goals, and it is also about focusing resource attention on high priority projects while balancing overall resource capacity. In larger organizations you can imagine how difficult it is just to monitor all of the project work going on and ensure that each project is on track to completion. However, with a little extra focus (and the right software), organizations should also monitor the skills and abilities of the people doing the work and assign people to projects that align with their interests and help them grow professionally. These last points are often after thoughts in project management because of the sheer focus on simply getting work done.

The Value of PPM to Talent Management

Consider for a moment the value to performance management of having an employee report show all of the projects they have been involved with over the last several years with the strategic importance to the organization, the complements given by their project teammates, the skills they have improved and developed, the degree of alignment to professional areas of growth, and even the people mentored during those projects. That would be powerful, and if used correctly, would send a strong message to employees that this company enables them to grow professionally and make a difference through their work. Wow.

Sadly, I don’t know if this system exists. Current HR management systems are not designed as portfolio management systems that would track this level of project detail.  Even having a system that a project manager could use to do a search across the company for people who have particular skills and experience for a new challenging project would be a great enhancement over what we have today—assigning spare bodies just to keep up with the flood of work going on.

Project portfolio management complements and enhances talent management. Do you agree? Tell me how well your talent management processes are going, especially if there is any linkage to project and portfolio management.

 

 

Talent management graphic courtesy of Lean Home Care

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Resource Management and Capacity Planning Handbook


Book Review

The Resource Management and Capacity Planning Handbook by Jerry Manas is the authoritative source for any organization wanting to improve its resource management practices in the context of portfolio management.  The opening chapter does a great job of providing basic context of resource management and capacity planning and strongly leverages a benchmark study by Appleseed RMCP and expert practitioners in the field.

Organizations continue to struggle with the matter of resource management and “when you consider the constant change, lack of visibility into resource capacity, and no sense of which work is most important, the result is a perfect storm of resource management chaos.” In order to address this problem, Manas systematically covers key topics chapter by chapter that provide relevant help to companies seeking to improve. This book is not about mere theory, but gives literally hundreds of practical points based on corporate reality.

Chapter 2 addresses the road to maturity for improving resource management. I am a big believer in assessing organizational maturity, and Manas does a great job of acknowledging that organizations are on a road to maturity, and through the help of expert practitioners, gives examples of how organizations have matured their resource management processes.  The chapter also addresses the matter of time tracking and does an excellent job of providing a balanced view of why to do it and how to make it work.

In chapter 3, Manas presents a systems approach for diagnosing the root causes of poor resource management. He brings out a number of points that should strike a chord in any organizations. In the latter half of the chapter, he uses systems thinking to deep dive on estimating resources and tasks. The Resource Management and Capacity Planning Handbook demystifies the complexities of resource capacity and demand management and offers clear ways for maximizing your limited resources to drive business growth and sustainability.

Chapter 4 addresses the much needed topic of leadership and organizational change management. I was very pleased to see an entire chapter devoted to these two subjects, because most of the time in portfolio management literature, the emphasis is either on process or tools, with little regard for the people dimension (which is very critical). Much of the chapter is spent on the “50 ways to lead your users”, which is a systematic and structured approach to leading change in the organization.

Chapter 5 addresses key roles for making resource management and capacity planning successful. One of the key takeaways is that successful organizations very often have dedicated resources to support capacity planning exercises. He also takes time explaining the expanding role of the PMO.

Chapter 6 is an enjoyable chapter on strategic alignment and how not to manage resource capacity management like failed military leaders in the past.

Chapter 7 is a great chapter focusing on the human side of resource management. As chapter 4 addressed the people side of leadership and change management, this chapter does an equally good job of explaining why it is important for organizations to pay attention to the human side of project execution and resource productivity when trying to improve resource management.

Chapter 8 expands upon a white paper Manas wrote called “the Capacity Quadrant”. This chapter speaks more frankly about the topic of portfolio management and the need for visibility, prioritization, optimization, and integration of the portfolio. I loved his white paper on the topic and felt that this chapter could have been moved up earlier in the book to provide a clearer view of resource management and capacity planning within the context of project portfolio management.

The final chapter, chapter 9, concludes with industry specific challenges of resource management and capacity planning. This chapter turned out to be the cherry on top as it provided insight into unique challenges faced by different industries. Learning about challenges faced by other industries actually gives greater context to the capacity planning problem and puts readers on the alert for identifying and solving these problems in their own company.

My Conclusion to Resource Management and Capacity Planning

The Resource Management and Capacity Planning Handbook is a must-have book for PMO directors and senior leaders struggling with making the best use of limited resources. Jerry Manas has a great writing style that makes the book easy to read and easy to understand. He also does a fantastic job of blending theory with reality by explaining key topics and then providing numerous tips on how to be more successful with resource management.

Rating: 5 out of 5 stars

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The Purpose and Goal of Prioritization


Prioritization is about focus—where to assign resources and when to start the work. It is not about scoring methods and ranking mechanisms.  Without defining project priorities, it is difficult to effectively distribute personnel to carry out the highest valued projects. Project priorities enable management to assign their employees to the most important projects. Gaylord Wahl of Point B says that priorities create a ‘true north’ which establishes a common understanding of what is important. Prioritizing projects enables organizations to make the best use of company resources. Without a clear and shared picture of what matters most, lower-value projects can move forward at the expense of high-value projects. Again, prioritization is about focus—WHERE to assign resources and WHEN to start the work. Prioritization and resource allocation go hand in hand.

Resource Priority and Schedule Priority

In the diagram above we see that prioritization relates to resource priority and schedule priority. Resource priority drives the question, “where are we going to invest our resources now?” The fundamental resources are money and people. Since there is often more work to be done than there are resources available, senior leadership needs to provide guidance of where to investment money and where to allocate human resources.  This requires an understanding of how to get the most important work done within existing capacity constraints. However, not all projects can be initiated immediately. Prioritization can also help direct the timing and sequencing of projects. In some cases, high priority projects may have other dependencies or resource constraints that require a start date in the future. In other cases, lower priority projects get pushed out into the future. In both cases, schedule priority helps answer the question “when can we start project work?”   Having the right human resources available to do project work is a critical success factor. High priority projects have a higher likelihood of success due to adequate staffing. Lower priority projects may face more resource contention and have a higher risk of project delays due to inadequate resource time. Lower priority projects that get pushed out into the future have an even lower likelihood of success since these projects face challenges around project initiation and higher resource contention.

The purpose of prioritization is to allocate resources to the most important work. Prioritization provides focus—WHERE to assign resources and WHEN to start the work. The goal of prioritization is to accomplish the most important work to deliver maximum business value. Although prioritization is a critical need in many organizations, in the next post we will highlight cases where prioritization is a waste of time.

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Book Review – IT Governance


Book review of IT Governance by Peter Weill and Jeanne Ross (Harvard Business School Publishing, 2004)

IT Governance

Synopsis

“IT governance is the most important factor in generating business value from IT.”

“Good governance design allows enterprises to deliver superior results on their IT investments.”

“Effective IT governance is the single most important predictor of the value an organization generates from IT”

The quotes above should draw attention to the importance of well defined and well communicated IT governance. Although not exciting, IT governance helps generate greater value from IT. The authors define governance as “specifying the decision rights and accountability framework to encourage desirable behavior in using IT.” “Governance determines who makes the decisions. Management is the process of making and implementing the decisions.”

Much of the book is spent developing two questions. The first question focuses on the types of decisions that must be made to ensure effective management and use of IT. The authors answer this question by describing five key areas of IT governance that require decision making:

IT Principles—a related set of high level statements about how IT is used in the business.

IT Architecture—the organizing logic for data, applications, and infrastructure, captured in a set of policies, relationships, and technical choices to achieve desired business and technical standardization and integration.

IT infrastructure—determining shared and enabling services.

Business Application needs—specifying the business need for purchased or intentionally developed IT applications.

IT Investment and Prioritization—choosing which initiatives to fund and how much to spend.

The second question addressed in the book focuses on who makes these decisions. The authors address this question by describing six archetypes (decision-making styles) used by enterprises in IT decision making:

Business Monarchy—top managers

IT Monarchy—IT specialists

Feudal—each business unit making independent decisions

Federal—combination of the corporate center and the business units with or without IT people involved

IT Duopoly—IT group and one other group (for example, top management or business unit leaders)

Anarchy—isolated individual or small group decision making

Much research and analysis was made by the authors in connecting the decisions being made with the right decision makers. They conducted an extensive survey of over 250 companies across 23 counties. Based on the results, they concluded that the best performers conducted IT governance differently from the low performers and drew conclusions of what distinguished the two groups.

Commentary

IT Governance was very useful to me personally as it is the most thorough work on the topic that I have read and provided a lot of good insight into how to make governance work. Project portfolio management (PPM) is tightly linked with IT governance, “Portfolio management without governance is an empty concept” (Datz). In order to make portfolio management processes successful a proper governance structure must be in place. Project governance is very much about the types of decisions being made and the people who participate in the decision making. The Project Management Institute’s Standard for Portfolio Management 2nd Edition briefly discussed governance but did not go into the same level of detail as this book. Another well respected PPM expert, James Pennypacker, developed a portfolio management maturity model which identifies governance as a key criteria. This book strongly supplements that maturity model.

This book enlarged my view of IT governance particularly with the five key areas of: IT Principles, IT Architecture, IT infrastructure, Business Application Needs, IT Investment and Prioritization. PPM is very focused on the last area of investment and prioritization, but the four preceding areas lead up to the point of making the investment decisions. It was very clear that a governance structure needs to be set up to account for all five areas.

This book also strengthened my view concerning the people involved with governance. I liked the quote stating, “IT governance is a senior management responsibility. If IT is not generating value, senior management should first examine its IT governance practices—who makes decisions and how the decision makers are accountable.” Governance cannot be delegated to someone else. The authors made it very clear that one of the critical success factors of IT governance is the involvement with senior/executive leadership. Without the adequate leadership, solid governance is likely to fail. In addition, “If business leaders do not assume responsibility for converting [IT capabilities] into value, the risk of failure is high. With high risk comes the likelihood of frustrated business leaders who often respond by replacing the IT leadership or abdicating further by outsourcing the whole ‘IT problem’”. Here the point was made that outsourcing IT may come out of a frustration by the business leaders with IT. Yet, the source of the frustration may very well lie in the poor governance structures established.

Another striking point that affects my current work is the need for improved communication with senior management. Governance communication cannot happen too much. The authors found that “the best predictor of IT governance performance is the percentage of managers in leadership positions who can accurately describe IT governance.” They found that most senior managers could not explain their own governance processes, which would explain why their IT governance doesn’t work properly. These points reinforce my need to continually educate senior management and communicate both the process and the results of our governance procedures so that we have greater project success.

The book was reasonably well written. Although the content was great, I felt that the case studies and diagrams were really lacking. I normally like case studies, but I do not feel that the cases used in this book added any value to me. Many of the diagrams could have also been explained better. As far as improvements, the topic of project portfolio management was barely discussed and is quite important in terms of executing strategic change within an organization. I overlooked it because of the book’s value to the topic of governance, but I definitely feel the authors should have spent more time on this topic. Otherwise, this is a great book for a topic that is overlooked but very necessary. I would definitely recommend it to anyone that is involved with portfolio management or any part of IT governance.

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Project Pipeline-Funnel or Tunnel


Project pipeline management is an important component of project portfolio management (PPM) and involves steps to ensure that an adequate number of projects are being evaluated and screened out at various stages of the intake process to meet strategic objectives.  Other factors such as organizational budget and resource capacity also come into play so that the organization is not overloaded with work, which can be a risk factor for completing organizational and strategic goals.

The question you should ask yourself today is whether or not your organization’s project pipeline resembles a funnel or a tunnel. In theory, as projects pass through the work intake process, those that do not meet key criteria or are deemed of lower value should be screened out. This would cause the project pipeline to look more like a funnel (shown below).

Project Funnel

Unfortunately, in reality, this is not often the case. I know of one large Fortune 500 company that killed three times (3x) more projects after they were authorized than when they were initially being evaluated.  In this case, there is hardly a funnel, but more of a tunnel (shown below)  in which most projects get approved. This can cause organizational chaos since more work is authorized than people have time to work (a capacity management issue).

In a future post we may explore success factors for managing the project pipeline, but for now it is sufficient to highlight two success factors: strong strategic leadership and clear screening criteria. When senior leaders can say “no” to projects for the right reasons, this will foster a leaner project pipeline and healthier project portfolio. Clear screening criteria make it easier for senior leadership to say no to misaligned projects, which requires a solid understanding of organizational goals and objectives.

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Portfolio Management V-Model Part 2


In part 1 of the portfolio management V-model we looked at the left side of V (process and data) that drives better decision making. In part 2 we will look at the right side of the V (leadership and governance) and then tie everything together. Let’s start with governance.

PPM V-Model

Establishing portfolio management governance is a critical component for successful execution of PPM. Peter Weill and Jeanne Ross, authors of IT Governance, define governance as “specifying the decision rights and accountability framework to encourage desirable behavior in using IT. Governance determines who makes the decisions. Management is the process of making and implementing the decisions.” They make the point that IT governance is the most important factor in generating business value from IT and that good governance design allows enterprises to deliver superior results on their IT investments.

Governance is the foundation for all of the other portfolio mechanics, and without it, PPM doesn’t work. All benefits of project portfolio management hinge on the execution of portfolio governance. According to Howard A. Rubin, former executive vice president at Meta Group, “a good governance structure is central to making [PPM] work.” Furthermore, “Portfolio management without governance is an empty concept”. These quotes highlight the need for a well-defined and properly structured governance in order to manage the project portfolio.

Leadership is a critical component that brings the governance framework and the visionand goals of the organization together. Good leaders will develop the right goals and strategies for the organization. At the same time, good leaders will also develop the necessary governance infrastructure to make good decisions that will drive the execution of the strategy they have put in place. Moreover, good leaders will hold management accountable for following the governance process and will take ownership for achieving the organizational goals. In sum, leadership drives accountability.

Good governance processes enable better decision making but do not ensure it. The real decision makers on the portfolio governance board should be strong strategic leaders who make the right decisions at the right time. Portfolio management requires prioritization and trade-off decisions, which can be difficult tasks amidst strong politics and/or dynamic environments. True leaders will not compromise and accept mediocre results, even when that is the easiest path to take. Good strategic leaders will make difficult decisions (aka “the right decisions”) in the face of difficult circumstances. This is why leadership is needed in addition to governance for making better strategic decisions.

We can connect all of the components together now and see how they fit together. Good decision making requires having the right data at the right time, and it also requires strong leadership to utilize that data for making the best decision possible at any point in time. In order to have good data, organizational processes are required to collect the data and maintain it. Governance processes are also needed to ensure that the governance board operates efficiently and effectively. Even if there are good governance processes and place, and the roles and responsibilities are well understood, real leadership is needed to make difficult decisions that best utilize resources and accomplish company goals (even when not popular among all stakeholders). These decisions relate to the projects and programs in the portfolio that will execute strategy and meet company objectives. The simple portfolio management V-model helps tie together four critical components of PPM that lead to better decision making and result in greater strategic execution.

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Portfolio Management V-Model Part 1


I recently constructed a portfolio management-oriented V-model. The traditional V-model has been used in software and product development, but this PPM variant differs in that the end result comes together at the point of the V. This is not an exhaustive list of PPM components, but does represent critical components and how they come together to drive better decision making resulting in optimal strategic execution. The model also makes a big assumption that the organization has sufficient strategy development capabilities in place.

Let’s work backwards (from the point back to the tips of the V) to understand how components on the left side supports the model.

 PPM V-Model

One of the primary goals (if not the foremost goal) of portfolio management is to execute strategy. There is an important distinction between strategy creation and strategic execution. Possessing a strategy (and spending the energy to create one) is meaningless if the organization cannot accomplish the strategic goals. Although many people acknowledge that strategic projects are vehicles for a accomplishing a strategy, senior leadership needs to make the right project decisions at the right time to advance the goals of the company. Hence, making smarter and better decisions is a precursor for solid strategic execution.

In order to make smarter and better decisions, the right data needs to be available at the right time. I have written about this in the past. Senior leaders should know what data is important and valuable for making the right decisions at the right time. Data collection costs money as does data analysis. Organizations should be mindful of the amount of effort needed to collect data and only collect data that is most important to the company. In another post, I wrote about a virtuous data cycle by which senior leaders need to actually use the data collected, communicate that the data is being used, and explain how the data is being used. This will encourage higher quality data collection resulting in better decision making. However, in order for the right data to be collected at the right time, processes need to be in place to facilitate the data collection process. Processes for work in-take, business case development, status updates, and resource management help provide the right data in the portfolio management lifecycle to promote better decision making.

The next post will explore the right side of the model and tie all the points together.

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Greater Value From Portfolio Management Systems


Portfolio management systems have a very real place in making PPM processes successful. These systems have the potential to drive value in a number of ways, some of which are highlighted below:

1) Enterprise repository (“single source of truth”)—having a single system that contains up-to-date and accurate project and portfolio data is valuable. Gone are the days of maintaining multiple versions of static Excel files that contain the current “authorized” list of projects. This value is magnified the easier it is to access the system and the greater the number of users who access the system.

2) Process enabler—on top of merely storing project and portfolio data, portfolio management systems can better enable portfolio processes through workflow automation. This is particularly useful for stage-gate project reviews that have a number of review steps and need approval by multiple parties.  Portfolio management system can also better enable project management and capacity management processes. Thus the tool reduces the amount of work needed to carry out these processes, reducing lead time and costs.

3) Portfolio tools—portfolio management systems commonly come with tools that make portfolio management easier overall. One clear example is portfolio optimization, which is difficult (if not impossible) with spreadsheets and other databases. Portfolio management systems can make this otherwise difficult job easier by providing the tools needed to effectively get the job done.

4) Reporting and analytics—one of the greatest benefits of utilizing portfolio management systems is to get accurate and up-to-date reports on the status and health of projects, programs, and portfolios. Buying a portfolio management system and not utilizing the reporting capabilities or analytics is like buying a car with only two gears—you’ll make progress but not as quickly as you will by providing decision makers with insightful information and up-to-date reports.

The critical question then is, “how much value are you getting out of your portfolio management system?” If the cost of the system plus the cost of entering data plus the cost of maintaining the system exceeds the value of the information coming out of it, senior leadership either needs to reconsider its ways or change its portfolio management system.

As we discussed in an earlier post, leadership plays a huge part in making sure the right data gets fed into the system at the right time. Yet, leadership plays just as big of a role in making sure the organization gets value from its portfolio management system. Let’s quickly review the four areas where companies can derive value from portfolio management systems and the potential risks.

1) Enterprise repository—if employees and managers do not access the system often, or if there are competing places to get similar project and portfolio data, the system loses value.

2) Process enabler—if project and portfolio processes are not regularly followed, then the effort to load the system with data to enable those processes is a waste of time.

3) Portfolio tools—if the organization does not leverage the tools available in its portfolio management system, then it paid extra money for tools it doesn’t use.

4) Reporting and analytics—if senior management does not pull reports and use the data, then all the effort to ensure that quality data is going into the system is a waste of time. Even worse, if management does not communicate that it uses the data and demonstrate how it uses the data, the organization easily becomes skeptical of the value of portfolio management.

What value do you currently get from your portfolio management systems? Have you encountered any of the problems mentioned above?

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Be Sure To Use The Portfolio Data


Data represents a major facet of successfully implementing project portfolio management (PPM). In a previous post, I discussed how data drives the portfolio management engine and some of the key components for getting good data into the tool. Some important portfolio data types includes: financial data, resource data, schedule data, and benefits data. Leadership plays a pivotal part in the whole process from determining which data is needed to using the data for better decision making. This post will concentrate on the last part of the process—how to use the portfolio data.

Use the Portfolio Data

Data quality is never perfect at the beginning of a portfolio management process. Collecting data takes time and effort, and with so much demand on individual’s time, people do not want to waste time collecting data that is unnecessary or won’t be used. This is why it is so important for senior leaders to use the portfolio data. When leadership uses the data, they will understand what data is truly needed for higher quality decision making. Moreover, once the data gets used, the gaps in the data will be readily apparent and will give senior leaders an opportunity to reinforce the importance of the portfolio processes (that collect the data in the first place).  However, using the data is only the first step in a three step process. Next, leadership needs to communicate that the data is being used.

Communicate that You Use the Portfolio Data

Communicating that the portfolio data is being used is a conscious effort on the part of the senior management team, but is something very easy to do. It can also easily be overlooked. Think about it. Project managers and resource managers can put data into the PPM system not knowing if it is simply going into a black hole or is actually helping the organization. Without communication, they may never hear whether the data is actually being used. A prime example occurs with resource data and capacity management. In order for capacity management to be successful, good data is needed, which takes a lot of effort by project managers and resource managers. If the project managers and resource managers do not believe that the data is actually being used, there will be less effort going forward in entering and maintaining the data. Even when an organization is mandated to use a PPM system, the data can be compromised by a small number of people who do not take the process seriously. Communicating that the data is being used is necessary for reinforcing the importance of the portfolio processes, yet senior leadership needs to take one more step—demonstrate how the data is being used.

Demonstrate How You Use the Portfolio Data

Communicating that the data is being used is good, but demonstrating how the data is being used is even better. This will send a clear message to the organization of how important it is to maintain accurate and up-to-date information in the portfolio system. If the data is being used to drive decisions around strategic project investments, staffing plans, bonuses, etc., then people will be more likely to spend the time to enter, update, and maintain the data. However, if the data is used to create a report that merely scratches the itch of a curious executive, then the people involved with the portfolio processes won’t have much interest in making sure that the data is accurate and up-to-date.

Using portfolio data, communicating that the portfolio data is being used, and demonstrating how the data is being used are the responsibilities of senior leadership. None of these steps are difficult, but need to be taken on a regular basis if the organization wants to be successful with portfolio management. Collecting data comes at a price, and if the data isn’t being used, it is better for the organization to stop wasting its time and focus on things that move the organization forward. A small amount of effort on the part of the senior leaders can go a long way toward making portfolio management successful and useful. Data is the fuel that runs the portfolio engine. Bad data will clog the engine; good data will help the organization sail forward. Using the data, communicating that the data is being used, and demonstrating how the data is being used will not only make the difference in being successful at portfolio management, it’s also smart business.

 

Use the portfolio data
How to use the portfolio data

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The Right Portfolio Data at the Right Time


From a very pragmatic point of view, getting the right data at the right time is at the heart of good project portfolio management. If the right data is not available for decision makers to use, the issue will be mediocre results at best. Portfolio management is about selecting the right projects, optimizing the portfolio to deliver maximum benefit, protecting portfolio value to ensure that that value is delivered, and improving portfolio value by maturing organizational processes. At every step, data is required. The quality and quantity of data correlates to portfolio maturity. Some less mature organizations will collect insufficient data which leads to sub-optimal decisions. Other organizations may try to collect too much data before they are ready to utilize it and can do more harm than good by burning out employees with burdensome processes. Mature organizations will have the discipline and rigor to collect the right amount of quality data.

Therefore, understanding the data needed upfront is a success factor for portfolio management. There are several types of portfolio data:

  • Strategic data
  • Resource data
  • Schedule data (forecasts and actuals)
  • Performance data
  • Financial data (estimates and actuals)
  • Time tracking
  • Request data
  • Etc.

Senior management bears the responsibility for identifying the right data to be used in the portfolio management process. In addition, senior leadership needs to drive the accountability for collecting the right data. Without active engagement and feedback from senior management, data quality can suffer.

Organizational processes are very important for ensuring that the right data is collected. Selecting the right projects requires that good data is collected about each candidate project. Such data must be relevant to the senior management team that makes portfolio decisions. Data that is not used for decision making or information sharing is considered a waste. Collecting data comes at a cost, and organizations need to put the right processes in place in order to collect good data. From this angle, portfolio management processes are about collecting a sufficient amount of the right data. Without good standards and processes, important portfolio data will be collected inconsistently resulting in confusion and possible error.

Portfolio tools have a very important place in the portfolio management ecosystem, but only after leadership has identified what is required and lean processes have been created to facilitate data collection. Portfolio systems store and transform project and portfolio data for general consumption (aka reporting and analytics). For less mature organizations with fewer data requirements, simple portfolio systems such as Excel and Sharepoint can be used in the portfolio process. Maturing organizations should select portfolio software that meets the needs of its data requirements.

Lastly, senior leadership needs to use the data in the system for making better portfolio decisions. Strong portfolio systems will generate the reports and analytics necessary to support better investment decisions. Good data is the fuel that makes the portfolio engine run! Without good ‘fuel’, senior management will be unable to drive the organization toward its strategic goals. The data perspective of portfolio management begins and ends with senior leadership.

Data-Perspective-of-PPM

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Define leadership


Define leadership. Not easy. There are so many views about leadership that it is difficult to create a concise definition. I am taking a multi-quarter leadership course right now, and one of our tasks as a class was to define leadership. As a result of the values we instill in a definition, it is difficult to reach consensus on a definition. However, the exercise is worthwhile as it has challenged us to consider the most important aspects of leadership and convey it in a clear and simple way.

My personal definition of leadership has a more pragmatic view. I am more focused on accomplishment rather than the ideals of great leadership. As a result, my definition reads: Leadership is the ability to engage, empower, and energize people to accomplish significant goals according to a shared vision.

Firstly, leadership is more than a mere act or process, but is an ability. Good leaders engage those around them (in turn making them a team), which is not easy in large stagnant companies. These leaders then empower their people to work together collectively and collaboratively.  In the process, this group or team is energized to take action. Yet, the action taken is towards the accomplishment of common goals according to a shared vision. The vision may or may not have originated with the leader, but in the end, the leader can communicate the vision so that it is shared by the larger community for the purpose of accomplishing significant goals.

This is the kind of leadership needed for strategic execution.

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Good Organizational Infrastructure Manages the Chaos


At a recent project/portfolio management event, there was a comment made about project managers managing ‘within the chaos’. This got me thinking about how portfolio management fits in with the chaos. Another distinction between project and portfolio management began to emerge; Project managers manage within the chaos, but good portfolio management helps manage the chaos. Let me explain.

Project managers are often given a task to make things happen and use as many project management tools as needed to execute a project. Project managers usually do not own their resources and have no direct influence over the types of projects being conducted, the project governance process, or the project priorities for the organization. Therefore, Project Managers need to learn how to best manage their projects in the midst of an ever-changing work environment (a.k.a. chaos).

Portfolio Management as a discipline can be used to help minimize the chaos within the organization. If leadership is proactive in developing good governance processes, then the organizational infrastructure will be established to accommodate the number and complexity of projects within the organization (I will touch on the need for good organizational infrastructure next month at Project World). Good project selection will help identify good projects as well as to balance the high-risk and low-risk projects being conducted at any one time. This is a big point to help manage the chaos. Too many risky projects translates into a lot of variability for project managers; and when Murphy strikes, it can have a huge negative ripple effect across the portfolio of projects.

Good prioritization will also identify the most important projects and help communicate to resources managers how to allocate their resources. Furthermore, solid resource capacity management will make a world of difference for project execution. Imagine having the right resources at the right time! Portfolio management will reduce organizational chaos to make project execution more successful when solid organizational infrastructure is put in place.

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Strategic Leadership Qualities Part 1


When I think of strategic leadership, particular characteristics stand out that influence the type of leader I would like to be; I will touch briefly on each point.

1) “Walk the talk”—this relates to how real and genuine a leader is, otherwise the ability to lead will diminish due to hypocrisy. A couple examples may help illustrate the point. When a PMO manager or executive states that earned value management is important, yet rarely reviews the data, and worse, never acts on the data, the manager sends a message that is full of “talk” with no “walk”.  Or, when senior managers try to maintain a semblance of governance yet make exceptions to the process, the hypocrisy weakens the governance process.

2) Accountability—a leader not only needs to hold himself/herself accountable in order to walk the talk, but also needs to hold other people accountable. There is a lot to say about accountability, but strategic leadership will drive accountability within the organizations. This is not easy, and requires my third point, backbone.

3) Backbone—refers to the leader’s ability to stay true to their values and decisions in the face of opposition or pressure. Portfolio management is a cross roads of many facets of the business. A good strategic leader may get caught in the cross fire between organizations, but will not back down until problems can be reviewed and resolved.

More to come on strategic leadership…

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Strategic Leadership


Leadership differs from management, most of us agree with that. In regards to portfolio management, strategic leadership is critical.  Peter Drucker has an infamous quote about the difference between leadership and management, “Management is doing things right; leadership is doing the right things.” The distinction between project and portfolio management has also been made with a similar quote, “Project Management is about doing the work right, portfolio management is about doing the right work.” While I wouldn’t minimize the need for project leadership , I would argue that strategic leadership at the portfolio level is critical for making portfolio management sucessful. If we equate the two quotes above, we can see that portfolio management is very much related to effective leadership, because good leaders make sure the right work is getting done.

A lot of articles and books have been written on portfolio management mechanics (“how to”), but very little time has been spent on strategic leadership in relation to portfolio management. In a very general way, we can agree that portfolio management is about doing the right work , but people have to decide what work gets done. Without effective leadership, the right work may not get done (due to pet projects, short-sightedness, etc.).

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