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Part 3 of 4: Excerpts from the forthcoming PPM book - Project Portfolio Management: Leading The Coporate Vision by Shan Rajegopal, Philip McGuin and James Waller

Executives are more accountable today for answering these questions than ever before, and are under the critical eye of the shareholders and the board to deliver value, maximising ROI while minimising the risks. It is at this level, that of the ‘executive community’, that buy-in and sponsorship are paramount. The executive decision making stream is critical to the success or failure of any project and establishing a PPM process and solution within the business is only workable if it has executive support and visibility. And this support is only tenable in the long term if members of the executive body have a reliable and workable
framework for extracting the information they need.

PPM is a lame duck if executives and senior management do not take ownership and are unable to sell its benefits to board level. Executive sponsorship provides the infrastructure whereby the right authority is empowered to drive the right behaviour in the organisation. In others words, a truly strategy driven approach to deploying PPM must start at the top in order for accountability, transparency and above all credibility to extend throughout the organisation.

It is essential that the establishment of PPM within the business be based on upon a simple yet effective premise of managing it as a change project from the top down. Executives can eliminate many problems simply by involving themselves at the appropriate points in the project delivery process, and this is never more true than with the implementation of PPM.

Moreover, the tools and processes that are put in place must be bolstered by continual executive support and not delegated downwards once the process has been implemented. Therefore, as discussed in the next section, a permanent executive place on the PPMT is not only required but is essential to its long-term longevity. Managing the PPM process form the top down increases visibility of the primary project planning functions, enabling executives to make top level decisions that are based on coherent factual information, presented and accessed simply and delivered in real time. This visibility gives the executive decision making stream a bird’s-eye view of each department, their project progress, their cost and who is responsible for each. As a result, executives are able to make strategic and operational decisions quickly which can be adjusted as changes to projects in the pipeline arise.

The strategic contents of the portfolio, reasons for selection and execution fall to executive champions and project sponsors. However, as stated earlier, the successful deployment of the PPM process is in effect a multilayered relationship and is also dependent on how executive and strategic decisions about the business portfolio of projects are translated in real time to the operational side of the business. In other words, how does the business communicate downstream with it programme, project and
resources managers? It is simply not enough for both sides to communicate within the strategic planning process, then afterwards for the focus to split back to each side’s respective interests with no iterative communication
between the two elements.

A key component of sponsorship by executives is their role in managing PPM deployment as a change management project. In other words, change management needs to be represented at board level and executive buy-in will be needed to help set up a change programme that will address the cultural issues stirred up by PPM. The change programme will need to agree a corporate vision and justify the necessary resource management decisions needed to select, buy and implement the PPM tools. Executive
sponsorship will provide the PPM process with the necessary leadership to drive its implementation, weed out resistance, and sell its benefits to the board as well as provide it with long-term sustainability and credibility. As PPM is pushed down to the lower levels of an organisation, this will begin to change the culture and impact the way of doing business.

• Authors: Shan Rajegopal, Philip McGuin and James Waller
• ISBN: 0230507166
• Format: Trade Book
• Price: £25.00
• Pub. Date: 15/03/2007
• Publisher(s): Palgrave Macmillan

To pre-order you copy click here

Let me start by quoting Harvey Levine. “Where Six Sigma propelled us closer to zero defects.  The PPM process will move us closer to zero project failure.”
 
There is a very powerful counter argument against R. David Hofferberth Project-Centric Approach - click here to read his article. 

This argument is the case for Project Portfolio Management. 

The project centric approach has been around since the dawn on project management and is inherently flawed.  Why?  Typically in project centric environments, organisation tend to focus on individual project choices, made one at a time with little regard for the impact that one project has on the next. Moreover, project-centric tools and processes typically have the reputation of being in the domain of the project manager, not that of the business, divorced from the executive decision making stream.
 
The result is poor quality project information and an imbalanced portfolio which leads to project-by-project decision making. In other words, the business suffers from too many projects that have a bias toward the short term, which are relatively low in value and carry minimal risk. When riskier projects are put onto the agenda, management does not have the necessary visibility of the business’s capability and is not prepared to initiate the project. Most importantly, a project-centric approach is unable to roll milestones up and down the organisation in order to give a business view of what is
and what is not being delivered.

I  argue in my new book Project Portfolio Management: Leading the Coprorate Vision the following. “PPM challenges the narrow ‘pure play, project-by-project orientated focus to planning’ and draws attention to the broader, more integrated approach, which subjects projects to wider organisational considerations and executive responsibility.
 

Simply put, PPM looks to empower the business, not just the project process. It helps the business establish a clear line of sight from the top-level pan-initiative view right down to the individual project layer. From the strategic viewpoint, it allows stakeholders, business leaders and executives to see clearly and understand how effective their strategies are and if necessary which programmes and projects to review. From the operational viewpoint, PPM empowers programme, resource and project managers with tools, support and necessary corporate accountability to execute project delivery.
 
The management of the project portfolio so as to maximise the contribution of projects to the overall welfare and success of the enterprise. Project Portfolio Management (PPM) is the management of that collection of projects and programmes in which a company invests to implement its strategy, for example asset programmes, improvement initiatives and strategic change work streams among others. A PPM process can utilise various techniques to provide tangible results for your business, ensuring that project investments contribute directly to realising your corporate goals.”
Let me finish where I started by quoting Harvey Levine.  He states that” The emergence of PPM as a recognized set of practices may be considered the biggest leap in project management technology since the development of Program Evaluation and Review Technique and Critical Path Method in the late 50s”

Part 2 of 4: Excerpts from the forthcoming PPM book - Project Portfolio Management: Leading The Coporate Vision by Shan Rajegopal, Philip McGuin and James WallerIs there a business today, no matter how large or small, that can afford to invest in non-performing or non-strategic projects? The importance of investing in the right projects, the need for compliance and the urgent demand for new product and service development all provide reasons why businesses depend on their project management processes to deliver and optimise results.It is a fact that businesses operate in a complex environment with many programmes and projects going on at any one time. Project Portfolio Management is today seen as an essential prerequisite not only for driving and improving project performance, but also for ensuring the business’s success. The reality is that in all organisations decision making is not an easy task for the executive team. Making ‘effective’ and ‘efficient’ decisions about a project, based on rational, accurate and real-time data, can be virtually impossible. For example – projects are often arbitrarily assessed only against the bottom-line financial impact instead of being evaluated according to their health, cost and strategic contribution to the organisation over the short and long term.

Essentially many businesses lack the day-to-day tools and processes needed to facilitate the discussion and resolution of difficult project decisions. They lack the standardised processes which help project stakeholders throughout the organisation understand how and why certain decisions are being made and also enable the business to ferret out socalled ‘pet projects’ that do not contribute to strategic objectives. Even when organisations embark upon developing a formal framework for aligning their projects with the business process it is still fraught with roadblocks. Many organisations are still daunted by the perceived capital and cultural investment needed to deploy PPM, and many organisations still ask whether they need such a process to manage their business projects and whether the cultural and technical impact is palatable.

PPM enables the business to align resources and project investments with corporate objectives. PPM provides a structured environment for deciding which projects, programmes and initiatives to fund, to sustain and to eliminate. PPM is about optimising the investment in change initiatives and subordinating programme and project approval to business strategy rather than departmental and business unit objectives. PPM ensures you are running the right programmes and brings discipline to the project muddle and resource contention that are so common in large organisations. PPM is the management of a portfolio so as to maximise the contribution of projects to the overall welfare and success of the enterprise. 

For business leaders and executives this means that:

• Projects should contribute to a positive cash flow for the enterprise.
• Projects must effectively utilise the organisation’s resources.
• Projects must help position the organisation for future success and growth.

The PPM process enables business users to organise a series of projects into an integrated portfolio. As part of this process the business is able to produce reports based on the various project objectives, costs, resources and risks. This will assist the business in making key financial and business decisions. PPM is a dynamic process whereby projects are regularly evaluated, prioritised and selected, based on the goal of obtaining the greatest possible value from the organisation’s limited resources.

• Authors: Shan Rajegopal, Philip McGuin and James Waller
• ISBN: 0230507166
• Format: Trade Book
• Price: £25.00
• Pub. Date: 15/03/2007
• Publisher(s): Palgrave Macmillan

To pre-order you copy click here

In the summer of 2006, Dr. Shan Rajegopal of Berkshire Consultancy Ltd. brought together a round table of senior managers from the FTSE 100 companies.

The roundtable followed three key themes:

1) Issues and challenges for companies seeking to implement PPM;

2) Ways of fine tuning PPM practices to make a lasting business impact;

3) PPM trends in the next 5 years.

To read the findings of the round table on the IT Toolbox click here

Dr. Shan Rajegopal is a practitioner, academic and consultant with over 20 years industrial experience in various sectors. He currently works for Berkshire Consultancy Ltd. conducting project portfolio assessments and implementation.

For me history is the gateway to human behavior, it teaches us not only where we have been, but where we are and where we should go. History underpins everything that is past, present and future and much can be learnt for what others have done. The PMThink Blog 1st of a 3 part series relates the fall of Napoleon to the trials and tribulations of the modern project manager.

Click here to hear Part 1.

Napoleon on Project Management by Jerry Manas: What is it about Napoleon Bonaparte that has led recognized modern-day leaders to study his principles—and countless books on management and leadership to quote his maxims? For one, Napoleon rose from relative obscurity to rule all of Western Europe in but a few years—something the Romans took centuries to accomplish. He brought order out of chaos. He crafted an administration and civil code that is still in use today. His troops adored him, and the people admired him. Even his arch rival, the Duke of Wellington said, “In this age, in past ages, in any age, Napoleon.” Yet, Napoleon lost it all, only to die alone and in exile.

Are there lessons for today’s project managers and leaders to be found in his successes and ultimate failings?

Indeed, there are.