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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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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Using Gamification to Teach Portfolio Management Principles

This is a fun blog post with tips on using gamification to teach portfolio management principles (PPM). Portfolio management is not rocket science, but quickly conveying key concepts to people not familiar with project and portfolio management disciplines can be difficult. I learned this the hard way recently through my participation at two business competitions in Seattle. As I was working to come up with a simple message to explain portfolio management, I was reminded of a game I used to play in high school called Klax that actually contained many portfolio management principles. Klax is similar to many other puzzle games requiring players to connect multiple objects together of the same color. The basic game play involves colored tiles coming down a conveyor belt and the player needs to catch the tiles before they fall off and successfully drop them into a holding container (5 tiles by 5 tiles big) where points are scored by lining up at least three tiles in a row of the same color. The player can hold up to 5 tiles in order to better plan when and how to drop colored tiles into the bin.  When colored tiles are lined up, points are scored and the tiles disappearing clearing up more space to drop more tiles. A vertical stack of three tiles scores the least amount of points, horizontal connections score more, and diagonal connections score even more. Skilled players can connect 4 and 5 tiles together to score more points and lining up tiles to form an “X” scores a massive bonus. The game becomes more and more challenging as the number of colored tiles increases and come faster down the conveyor belt. The game ends when a player has missed too many falling tiles or fills the container bin (demo).

Connection to PPM

As you can probably guess by now, such a simple game has some interesting correlations to help teach portfolio management principles. Each tile could represent a project proposal and aligning three or more proposals of the same type (color) to organizational goals or strategies drives greater value to the organization. The holding bin itself could represent organizational resource capacity to complete project work. Each vertical section of the holding bin could represent a different business unit or customer. Some projects (vertical stacks) focus only on a single customer or business unit, whereas other projects (horizontal and diagonal connections) are developed for multiple business units. Clearly, these sets of projects are harder to complete when multiple stakeholders are involved and represent higher risk to the portfolio. Vertical stacks of 3 tiles are the easiest to complete but score the lowest amount of points. Higher scores are generated by lining up 4 and 5 tiles together, which requires more skill and planning to make those connections. Players need forethought of when and how to place the tiles in order to generate maximum points. Certain levels also have certain goals that need to be achieved before the player can advance to the next level. For example, the player may need to complete five diagonals before the level is over. Creating vertical and horizontal stacks may still earn points and may be needed to clear space in the bin but does not directly achieve the required goal.

Portfolio Management Principles

Here are a few of the portfolio management principles that are easily displayed through the game:

1) Governance: the paddle that catches the tiles could represent a governance board that needs to decide which projects to do and when to do them. If too much work is proposed (on the conveyor belt), the governance board loses control, and chaos ensues.

2) Value maximization: a governance board should not only focus on getting work done, but ensure that the right work gets done at the right time to generate greater value. In the game, a vertical stack of three tiles helps clear the board and generates a few points, but nowhere near the value of larger horizontal and diagonal stacks.

3) Organizational goals: just as the game has a goal to be achieved before a player can advance to the next level, so organizations have their own goals and it is important to realize that not all projects support the goals of the organization. Appropriate portfolio planning is needed to achieve organizational goals.

4) Portfolio Risk: larger horizontal and diagonal stacks are harder to achieve and could represent organizational risk. Trying to get too much work done at once (setting up multiple diagonals or horizontals) jeopardizes the entire organization and could result in nothing truly getting done unless adequate attention is paid to managing the portfolio risk.

5) Pipeline management: the conveyor belt represents the current pipeline of project proposals and the speed at which the tiles come down the conveyor belt is a significant factor for determining the difficulty level of the game. Likewise, ensuring that there is a steady flow of projects that are dispatched appropriately is a success factor for portfolio management.

Try out the game and let me know what you think and how well it applies to portfolio management principles. A newer version of the game can be found here, but is only available for Apple products.

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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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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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Book Review—Death by Meetings by Patrick Lencioni Part 2

This post is a continuation of the previous book report on Patrick Lencioni’s book, Death by Meetings. He recommended four types of meetings, three of which are briefly discusses in relation to portfolio management.

2) Weekly tactical meeting: these meetings are focused on tactical issues of immediate concern. There should be discipline to this meeting and structural consistency. A quick lightning round allows everyone to share their top two or three priorities for the week. The next component is a review of key metrics without lengthy discussion. The third component is a real-time agenda, not one created prior to the meeting. Disciplined spontaneity is important for those leading the meetings who can allow the meeting to shape itself based on the most urgent matters.

PPM application: this meeting would allow project and program managers to provide quick status and then address current issues affecting their projects.

3) Monthly strategic meetings: allows managers to wrestle with, analyze, and debate important issues that affect the organization. It is important that they occur regularly so that it serves as a parking lot for strategic matters that get brought up in other meetings. “This gives executives confidence to table critical issues knowing that they will eventually be addressed.”

PPM application: These meetings are particularly relevant to the portfolio management team to actually discuss current strategies and provides time for them to develop clearer strategic criteria. These meetings could also be used for longer-range phasing plans for strategic completion.

4) Quarterly off-site: “provides executives an opportunity to regularly step away from the daily, weekly, even monthly issues that occupy their attention, so that they can review the business in a more holistic manner”. These off-sites should include a comprehensive strategy review, team review, personnel review, and even a competitive industry review.

PPM application: this get away allows the portfolio management team adequate time to consider the strategic direction of the organization and develop future goals.

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Book Review—Death by Meetings by Patrick Lencioni Part 1

Patrick Lencioni’s book, Death by Meetings, is a great book and relevant to the PPM community.

“Meetings are boring because they lack drama”
“Meetings are ineffective because they lack contextual structure”

Problem #1—Lack of drama

Meetings are interactive and relevant to our lives, yet they usually lack some amount of drama. “When a group of intelligent people come together to talk about issues that matter, it is both natural and productive for disagreement to occur. Resolving these issues is what makes a meeting productive, engaging, and fun.”

PPM application: portfolio management is both fun and exciting because it is the mechanism for accomplishing strategic initiatives. There are always ongoing changes that requires participants to be engaged, strategies to be clarified, priorities to be established and communicated, and projects to be executed. Keeping this view in front of the portfolio management team and project managers will help keep everyone focused.

Problem #2—Lack of Contextual Structure

The basic problem is that too many things are crammed into meetings and often frustrate many people for different reasons. Tactical near-term decisions may get added to the same agenda as longer-term strategic items. Nothing gets the attention it deserves, people don’t get to weigh in sufficiently and/or are not adequately prepared. The problem isn’t to necessarily spend more time in meetings as it is to break down the content for the appropriate meeting. To resolve the contextual structure issue, Lencioni advocates four types of meetings:

1) The daily check-in: this may be relevant for a leadership team or another group that does work closely together. It’s intent is to provide everyone a quick overview of the days events in five minutes or less (approximately).

PPM application: for organizations that are project focused, having such a meeting may help project managers and key team members stay on the same page with each other.

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