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There are three commonsense categories of past, present, and future when dealing with the basics of project portfolio management: (a) assessing where your program has been, (b) understanding where your program is today, and (c) driving where your program is going.
Assessing Where Your Program Has Been
Spanish philosopher George Santayana said, “Those who cannot learn from history are doomed to repeat it.” Unfortunately, many organizations do not look back at the preceding year with enough thoroughness. The leader should look back at the preceding year and document the following:
What were the business’s goals and targets for the year?
What was the variance of actual results compared with those goals?
What was the root cause of each variance?
This is important information to have. First, it documents that there were/are/should have been definitive goals and targets. You cannot calculate variances against non-definitive targets. Second, establishing a root cause for the reason the goal was not met or exceeded can sometimes tell us how good we are at setting goals. No matter how good the execution, if the goals are not set properly then the results will not be satisfactory.
One school of thought says that goals should be “stretch goals,” which are beyond the organization’s current reach. There is nothing wrong with such thinking, but there is the danger that if the stretch goal is set too high, the organization could deem it unreachable. Once that happens, everyone will stop striving toward it . . . or anything else for that matter. People will stretch for the achievable but they won’t move a muscle for the unachievable. In the context of the goals the following questions should be addressed.
What projects were in the works when the previous year started?
Were any new projects born or created during the year?
What projects were completed during the year?
Were any projects terminated during the year?
To accurately characterize the workload for the year, you also need to obtain the following information:
What organizational problems, opportunities, or challenges existed or were first identified during the year?
Which of these were solved, resolved, or otherwise acted upon during the year?
A proper analysis of this information shows how well the organization is maturing. Are more problems being solved than are being created? Are any problems being solved? Do the same organizational problems exist year after year?
Most organizations do not have the resources to work every project, fix every problem, and leverage every opportunity.
The leader needs to assess how well the team did at working the right projects, fixing the right problems, and leveraging the right opportunities while meeting goals and targets. Unfortunately, because of the prevalent “the customer is always right” mentality, many customers propose projects without full or even marginal understanding of what they are trying to accomplish or what they are changing. This problem is compounded when the organization does not measure the success of the project after delivery.
In fact, too many organizations measure project success by evaluating it on only the triple constraints of time, cost, and scope for the implementation. They judge the project manager, but not the customer. You also need to evaluate project success based on whether the project delivered the business value it promised.
A lack of customer accountability for the success of their projects breeds a culture where the customers cry “give, give, give” and are never satisfied. Over time, the customers never improve at project selection, because they have never objectively measured the success of their previous selections.
Furthermore, this creates an environment where progress is often evaluated by how many projects are being proposed within a particular business segment, because change—any change—is considered progress. In reality, the true measure of progress is bottom-line results. Measuring the effectiveness of projects after delivery causes customers and stakeholders to carefully consider projects before proposing them. It creates an “accountability” culture in which people submit high-value projects.
The basics of Project Portfolio Management are a critical aspect of overall organizational success.
Copyright 2017 SEBA® Solutions Inc.