The Need to Develop a Deep Understanding of PPM

Portfolio Management practitioners need to thoroughly understand the implications of various portfolio management practices and disciplines. I read an article last year discussing the misapplications of Lean principles. In contrast to other companies, Toyota’s success with the Toyota Production System is rooted in a deep understanding of the principles and theories so that they can adapt the principles in new situations. Unfortunately, wannabe Lean practitioners (or Six Sigma practitioners, or Theory of Constraints practitioners, etc.) may barely understand the basic theory and principles (but completely lack a deep understanding) and end up misapplying the methods or fixate on tools. The end result is that the methodology is criticized as not working well.

I think we could make a similar case for portfolio management. People commonly talk about various tools such as prioritization without fully realizing the cultural change and governance required or the breadth of influence portfolio management can have on an organization. When well executed, portfolio management can touch many sectors of business not limited to: finance, sales and marketing, engineering, information technology, and operations. Walking in sync with the various functions to make better decisions is a large part of what portfolio management is about. When people fixate on portfolio mechanics, or worse yet, on portfolio software, the whole organization may miss the boat.

With any kind of management discipline or quality improvement methodology, having a deep understanding of the principles and theories is very important in order to best apply the principles to a given situation. One person likened this to teaching someone how to drive a car; there are standards and rules to follow when driving a car under normal circumstances, but during unusual circumstances, an expert driver may adjust the way he/she drives in order to accommodate the conditions. A similar view could hold true with portfolio management—the application depends on a deeper understanding of the methodology. Unfortunately, people are often too quick to develop a deeper understanding and rush into applying the tools. Some time later without realizing the intended benefits, the methodology is blamed rather than the persons who improperly implemented it.

Tim Washington
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Tim Washington

I am an Associate at Point B consulting with a professional goal of making companies successful with project portfolio management. My personal approach is to right-size portfolio management processes to fit an organization's culture and maturity to be effective without creating a bureaucracy. Please contact me if you would like to know more about how project portfolio management (PPM) can help your organization achieve its strategic goals.

2 thoughts to “The Need to Develop a Deep Understanding of PPM”

  1. I do like this posting. This is a very insightful observation and, congratulations, so very well written. I entirely agree with the point made by Tim and Lean, Six Sigma methodologies are particularly prone to people grabbing tools and thinking they have “Got it”. And no doubt PPM as a has potential to suffer in the same way. In fact every discipline or practice has this risk that people acquire a superficial understanding of the subject and assume that their understand is complete, deep and comprehensive.

    Within a business environment, striving for continuous organisational learning is an important matter for the leadership team. Encouraging staff to develop a deep understanding of the forces of change has to be part of the daily activity of everyone.

    We have two words in our language; Principles & Fundamentals! What we mean by both of these words is that they apply independent of time and circumstance. Our principles and the ones held by a group within a business, are the result of decisions we make. We actually have to decide what principles we are going to apply to our lives and then stick to those principles irrespective of the situation. Principles provide individuals and groups with stability and a sense of constancy especially at times of dramatic change. We know of the tongue in cheek phrase “I have principles on these matters and if you don’t like my principles, well I have other principles!” Amusing as this is it is all too often true.

    When we say something is Fundamental we are saying we understand the underlying forces of change and that they are also independent of time and place. Gravity is fundamental! It more or less applies everywhere on earth, was there yesterday, is here today and we can plan on it being there tomorrow! The same applies within business change and organisations. We need to strive and encourage everyone to gain a better understanding of the fundamentals that are both driving and opposing change within our business world. Only with a good understanding of the fundamentals of change can we begin to manage change to achieve purposeful outcomes.

    So, it is really a matter of personal principle as to whether we choose to drive fast cars and whether we drive them under difficult and harsh conditions. One may decide that it is a great thing to do as long as nobody else is at risk. It develops skill, it is great fun and give the driver the rush of their life. Another may decide, never under any circumstances, there are other responsibilities that mean driving fast cars is against their principles. All fine, if driving fast cars happens to be a really important matter in someone’s life or within a family’s then there isn’t a right or wrong it is just a matter of deciding ones principles on the matter. Likewise, if driving fast cars is your thing then practice is really important as is the learning gained from the experience. The learning needs to be based on both the theory and the experience of driving the car under all sorts of different conditions. The aim is to understand the fundamentals forces so greater know how and skill can be applied what ever conditions are encountered.

    Within business life this returns us to matters that are well understood and frequently written about. Books have been written on the important for the leadership team to decide the set principles that are going to be use to underpin their business decision making and personal practice. More importantly though that the leadership team collectively live day by day and demonstrate in their practice what the principles actually mean. People learn by example and role modelling is critical. Within business we also need to strive to understand the fundamentals of change and apply this understanding to help bring about the desired outcomes. Applying some superficial understanding, some prejudice of basing a decision on hearsay or partial information is almost bound to result in unintended and often negative outcomes.

    So we decide our principles and then follow this with a deep understanding of the fundamentals of change. If we do this we will make a concious balanced decision as to whether we are going to drive fast cars or not and if we do decide we are going to drive fast cars we can then drive them with confidence that even under difficult conditions we will still be able to have great fun and be safe!

    1. Denis, thank you for the great comments, especially distinguishing principals and fundamentals. Certainly this is important for leadership teams to be successful in leading their organizations.


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