PMI has just released three pretty damn awesome reports about portfolio management as part of the Thought Leadership Series. Each one is about 15 pages long and packed with some great stats, gorgeous visuals and good focus on various key aspects of portfolio management including culture, leadership, and information.
I’ll be reviewing all of them individually this week for you, first up is Winning Through Project Portfolio Management, The Practitioners Perspective by Perry Keenan, Senior Partner and Managing Director, BCG.
You’ll find some very interesting stats measuring portfolio maturity in this report. For example 23% of organisations surveyed have high-portfolio management maturity (which is higher than I thought) and 94% of those people said that portfolio management has a positive tangible impact on their organisation. Two thirds of respondents said their organisation is either getting started with portfolio management or structuring / improving their portfolio capability, again a very positive number.
The report is based on a survey of 466 portfolio practitioners in July 2015. Interestingly only 25% of people were directors of PMO’s or portfolio managers. The rest were program managers (20%) project managers (19%), functional managers (13%).
The report focuses on three key success factors in portfolio management including strong process, leadership support and an enabling culture.
This is all about putting in place the processes that enable information flows and lead to better executive decisions. In todays high speed world, an organisations ability to navigate complexity, adjust direction and flex resources across the portfolio is crucial. You’ll never be able to do this without some form of process, which means your organisation need to be relatively ‘mature’. I totally agree with this, although in my experience, when you first start using portfolio management the processes don’t exit so the credibility, passion and ability to energise a community are critically important skills of the person leading the portfolio management implementation.
High maturity in portfolio management means more transparency and an improved understanding of how projects and programs contribute financial and non-financial value to the organisational strategy. With this information executives are more likely to make more intelligence based decisions, rather than gut feel. Of course gut feel will always be important but the point is reducing the dependency on ‘gut feel’ and using live, timely, and real analytics.
The benefits of portfolio management that will be experienced by executives is a key focus point of the report, and I’m all for it. There’s lots of talk about the value that executives should experience from portfolio management and the importance of leadership teams setting the right tone for the portfolio. This really is a crucial point from my experience, because the energy that the leadership team visibly put out about portfolio management, will absolutely influence the design and eventual success of portfolio management across the whole organisation.
The report says the best leaders are able to frame portfolio conversations in the context of the overall organisations strategy – again, I totally agree. However, what isn’t discussed in the report are the challenges that come about with ‘skilling-up’ or “educating’ executives about portfolio management. As many of you know, this is the number one challenge that most people face when implementing portfolio management.
An enabling culture.
I’m very happy to see this whole section in the report. For too long cultural aspects have not been a focal point within portfolio management, as most of you will know from reading my blog over the years, my view is the energy of people sits at the heart of portfolio management, without this nothing will happen.
The report breaks cultural support into two dimensions, Intellectual and Emotional – I like this classification a lot. The Intellectual Dimension is about the provision on ‘intelligence’ i.e. you have your information, now go make some great project investment decisions. The Emotional Dimension refers to the existence of a fundamental desire for success across the whole organisation (exactly what it says in MoP with regards to Organisational Energy).
The importance of emotional dimension spans across everything, but is expressed in the context of stopping projects in this report. On average a mature organisation stops 12% of its projects (compared to 19% for less mature organisations). For organisations that score highly in both the “intelligence” and “emotional” dimensions there is minimal drama with stopping a project because everything is transparent, the portfolio community understands the justification and continues to focus on delivering the priority projects. For less mature organisation, stopping a project is major drama that can trigger a lot of emotional unrest and winging. This will most likely create a negative, demotivated energy within the portfolio delivery community and over time, the wider organisation.
Okay that’s it for part 1. Overall, this is a really great report which in my opinion reflects the critical importance that today’s portfolio management professionals play in the strategic success of every organisation, everywhere.
If you found this useful, send it to one person who loves portfolio management too.