As market dynamics increase, the selection of projects, which are important to align enterprise operations and strategy, face challenges from cost-benefit related conception, to criteria for project completion. Nearly all organizations have more project work to do than people and money to do the work. Trying to do too much causes all projects to suffer from delays, cost overruns, or poor quality.
Focus On Portfolio Performance
Common business pressures that serve as a catalyst to evolve a focus on portfolio performance can include:
- Smaller or greater demand from your customers
- Lack of available skilled resources needed for projects
- Increasing risk exposure across project portfolios
In any of these cases, you may have to adjust your priorities for the next few months. Or, you may have to adjust your spend, where to spend more, where to spend less. Also, you may have to rethink your business strategy for the long term.That means adjusting your project portfolios. Some projects must be stopped, some paused, some adapted, some accelerated and some newly created. These are difficult decisions, which must be made with little certainty about the future, and, hence, potentially with more risk. The decision-making process can generate positive results while leading a company, or make a significant damage to an organization.
Project portfolio managers need a well-facilitated and structured approach to assess, reprioritize and effectively deliver the project portfolio that is needed in a tumultuous world. A process of analysis and judgment must occur in business on a day-to-day basis, and is an important component of managerial work on various hierarchical levels in the corporate environment.
Planning Under Pressure
Being compelled to select the “right project(s) next” is a most important opportunity, especially during crisis circumstances, that can:
- Reduce the number of low-value projects, which will reduce the overhead of keeping track of them all and, even more importantly, increase the availability of resources for other high-value projects.
- Better align project investments with your organization’s business strategies, e.g., growing overall revenue, and with your organization’s cultural values. Facilitated discussion among executives about better alignment will entail broader agreement on overall business objectives and strategies.
- Improve balance and diversification of projects along key dimensions, which will entail broader agreement on such dimensions (such as, perhaps, revenue growth, product innovation, maintenance and compliance)
Follow A Two-Pronged Approach
In our experience at Group Atlantic, our clients enjoy best success by taking a two-pronged approach that emphasizes:
Top-down development of mindset, governance, and process—but not (software) tools—alongside education of relevant stakeholders, so that gradually a common enterprise-wide process for project approval, diversification and tracking is practiced. Purposeful organization development emphasized several important aspects:
- Shared vision and mindset: (e.g., breaking down silos, alignment with strategies and business goals) rooted in our Business Value Points matrix approach.
- Governance: where to house portfolio management responsibility and accountability in the organization, who can (not) make decisions about what, and related issues.
- Process: working with top leadership (e.g., to formulate the “burning platform”, develop sponsorship and communications, develop policies and model desired behaviors) and working with other executives and managers (e.g., to communicate the change(s), cascade the change down the management hierarchy, identify and manage champions and resisters, develop training, and change incentives and performance appraisals).
Quarterly exposure of executives to strategic projects, their dependencies, and their value and impact on overall strategy and results, so that executives start to appreciate interdependencies, strategic (non-) alignment and (non-) effects on overall results. This second prong follows, at least informally, a rolling 12-month plan (perhaps with a multi-year look ahead), updated every three to six months, to better exercise strategic agility.
Achieve Lasting Value
It’s certainly not trivial to reprioritize a wide ranging project portfolio, with many projects already in process and multiple influential stakeholders seemingly inseparably connected to project. The pressures of time and resource constraints, along with uncertainty about the future, can add to executive stress. Reacting chaotically could lead to a disorganized response and an inefficient use of finite resources.
A systematic project portfolio management approach, expertly facilitated, is about getting the best outcomes despite planning under extraordinary pressure. Decision-making meetings are more collaborative, effective and efficient. Better ideas come with facilitated attention to proven portfolio principles, process and reliable techniques.
With a structured and well-facilitated approach, one can move quickly and carefully to build/rebuild and manage the project portfolio your company requires to face challenges today—while also laying the critical next steps for prosperity tomorrow.
To learn more, please visit us at Portfolio Management.