OnPoint, LLC

Capacity Planning – From the Pipeline to the Envelope

When developing capacity plans, project portfolio managers frequently employ the metaphor of a pipeline. We envision initiatives entering the pipeline, undergoing the standard development process, then exiting the pipeline when the deliverables are complete.  If the pipeline can be expanded, project results will be delivered faster and business value will increase proportionally.

This metaphor assumes that the organization has the capacity to absorb and receive value from the change resulting from the project.  This could be an invalid assumption, as the organization may not have the operational capacity to benefit from the change.  Consider for example a project intended to introduce a new product.  Can the sales team explain the benefits of the product to the customer?  Can the operations team adequately support the product?  Can accounting accurately report on results?  These are questions that should be addressed via stakeholder analysis as the project is being defined.  This analysis is often inadequate at the individual project level, and that inadequacy is magnified at the portfolio level.

At the portfolio level, the metaphor of an envelope can be helpful.  The envelope represents a model of the capacity of the organization.  What does it do well?  These capabilities are inside the envelope.  Work that is a stretch exists at the edges of the envelope and then of course there is work that is outside the envelope.

Project work continually changes the size and shape of the envelope and these changes must be anticipated and planned.  Thus, the capacity plan must go beyond the project performing organization and consider the capacity of the entire organization.

Successful Project Portfolio Management Deployment – Strategies, Tactics, Tips and Lessons Learned

I recently co-presented on the topic of portfolio management with Tom Witty of Americo Insurance.  The presentation focused on the need to bridge the gap between strategic planning and execution.  The presentation was based on the principles of strategy execution as defined by the non-profit organization, Brightline and the principles of project portfolio management as defined by the PMI practice standard.

 Here’s a link to the copy of the presentation. https://www.slideshare.net/RonMontgomery1/successful-project-portfolio-management-strategies-tactics-tips-and-lessons-learned


Portfolio Management – Don’t lose your balance!

Below is a link to a Slide Share on my recent presentation at the 2016 Kansas City PMI Chapter PDD Days.




Flawed Governance Decisions = Weak Project Portfolios

Some years ago, Gerald Kendall and Steven Rollins wrote a book called, “Advanced Project Portfolio Management and the PMO – Multiplying ROI at Warp Speed” in which they noted four universal problems in project portfolio:

  1. “Too many active projects (often double what an organization should have)
  2. Wrong projects (projects that will not provide value to the organization)
  3. Projects not linked to strategic goals
  4. Unbalanced portfolio
    • Too much on the supply side, not enough on the market side
    • Too much development, not enough research
    • Too much short term, not enough long term
    • Not reflective of the organization’s most important assets, strategic resource value, or major product revenue opportunities…”
These problems are not new – they existed when the book was written over a dozen years ago and in my experience they are still common.  They are the result of flawed decision-making by the governance team.  But why are these governance decisions so poor?  Could it be that the materials that PMOs provide to support project decisions are inadequate?  Are the decisions being framed in project management jargon instead of business language?  Are so many data points provided that the executives can’t see the forest for the trees?  Do portfolio reports fail to provide a view of the interactions among projects?  If your project portfolio includes any (or all) of these four problems, it’s time to have a serious conversation with your governance team to understand what information they need to make better decisions.

Project Governance – It’s Okay to “Just say No”

According to a 2014 report “Project Smart” by The Standish Group (https://www.projectsmart.co.uk/white-papers/chaos-report.pdf), only 16.2% of projects were on-time & on-budget, while 52.7% were challenged, and 31.1% were impaired or cancelled.” Why were so many projects considered unsuccessful? Here are some of the top-ranked reasons:

  • Lack of executive support and user input or involvement
  • Unrealistic expectations
  • Technology incompetence and lack of resources

If a projects lack executive support, are unrealistic and the teams are inadequate, why were they approved?  Perhaps they were launched under the radar.   Maybe it was approved because a politically powerful executive thought it was a great idea, but lacked the time to provide executive sponsorship.  It’s possible that organizational cultures value boldness and eschew prudence.

The impact of these project failures extend throughout the organization.  Project team members feel responsible for the failure and morale takes a hit.  Talented leaders are blamed for the failures and some feel compelled to resign and others become overly risk-averse.

The solution is effective portfolio management and governance processes that result in more than just rubber-stamped “yes” decisions.  Portfolio management and governance must also result in “not yet” and even “no” decisions.

You are now entering the PPM Zone

Borrowing heavily from the Twilight Zone introduction, “There is a strange dimension beyond that which is known to project managers. It is a dimension as immense as sales and marketing and as endless as a program timeline. It is the middle ground between strategy and projects, between PowerPoints and Microsoft Project, and it lies between the pit of risk management and the pinnacle of executive briefings. This is the dimension of bewilderment. It is an area we call the PPM Zone.”

The Project Portfolio Management (PPM) zone is the place where project managers enter with Iron Triangles (scope, time, and cost), methodologies, and tools.  The project manager’s senior leadership team enters the PPM Zone with often-incomplete thoughts of vision, mission, and goals.  Project managers and senior leadership enter the PPM Zone each month, uncertain about why they are there.  An hour later, everyone leaves the PPM Zone frustrated that there was no clear “meeting of the minds.”

The PPM Zone should not be so mysterious.  After all, the goal of the PPM Zone should be to ensure that projects are chosen, planned, and executed in order to optimal business value as quickly as possible.  The PPM Zone should include “just enough” process and metrics to support decisions to fund, start, monitor and, if necessary, cancel projects based on their contribution to the success of the enterprise.

Those of us with extensive project management experience tend to view the PPM Zone from our own perspective rather than that of the executives making these decisions.  We over-emphasize project status reporting and under-emphasize strategic alignment.  We define complex formulas, collect extensive amounts of project data, and adhere to arcane PPM models, yet we overlook the human and political aspects of these decisions.  We need to move over to the senior leadership side of the table and understand what information they require to make project decisions and then continually refine our processes, tools and metrics accordingly.

Beware of Assumptions – They May Bite

Those of us who work with projects are always making assumptions.  We think about them briefly when writing the project charter, and they seem so reasonable at the time.  Certainly the customers will use the new product and will tell all their friends about it.  And there is no question that we will get our product to market faster than our competitors – even those competitors that are not currently on our radar.  So, we spend the next 3 months, 6 months or more working on the release only to find that our assumptions have bitten us in the … leg and make us look foolish. 

The agile frame work, with the reliance on the judgment of product owners, may help prove or disprove the assumptions before we launch the new product.  But product owners are proxies for the real customers in the market and may make incorrect assumptions about priorities and product features.   The customers are the ones who are most able to either prove or disprove our assumptions, but how do we engage them?

Eric Ries, who wrote the book, The Lean Start Up, proposes a systematic management process that calls for validating product strategy assumptions via the development of a “minimum viable product (MVP)” that can be used by potential customers very early in the product development process.  The metrics resulting from the use of the MVP provides input into decisions to either “pivot or persevere” with the original product strategy.  Here is a link to a website that discusses the book, the process, and the movement in support of lean product development http://theleanstartup.com.

If you are contemplating a new product or service and would prefer not to be bitten in your assumptions, it would be worthwhile to investigate the lean start up process.

Risk Management and the Lean / Agile Frameworks

Here’s a link to a AgileHood KC post on the application of risk management practices within the lean / agile frameworks.



Is it Agile Decision-making? Or Inadequate Planning?

Even in a well run organization, it may be necessary to cancel a project in response to new information. A new competitor may have already introduced a game-changing product. Market pricing may have changed, making a new product economically infeasible. It may be necessary to reduce capital outlays to keep the business afloat. Cancelling a project under these conditions may be a great example of agile decision making. But it could also be a sign of inadequate planning.

Whenever a decision is made to cancel a project, it is worth taking some time to reflect on the project and ask a few questions:

  • What were the flaws in the original planning premises?
  • Do these flaws indicate shortcomings with access to market intelligence?
  • Was the project clearly tied to a strategic objective?
  • If the project was tied to a strategic objective, should that objective be evaluated?
  • How was the decision made to launch the project?
  • Would there have been a different outcome with a different project team?

Cancelling a project is a very painful decision and it is human nature to want to move on quickly. An agile leader must ensure that the organization first learns from the pain, and then moves on.

On time and on budget, but did the business benefit?

The project finished on time and on budget, therefore it was a success. From a project management perspective, it would appear that this is a true statement. As project managers, we are obsessed with reaching milestones. We monitor our project burn rates with greater scrutiny than our personal bank accounts. To a project manager, schedule slippage and cost overruns are signs of poor planning or sloppy management. On the other hand, it may be a sign that the project manager is thinking like a business owner.

When faced with a decision to delay a project implementation until quality concerns can be addressed, a business owner would consider the longer term impacts. A year from now, what would be the impact of a delay? What would be the impact of a flawed implementation? The proper business decision might be a brief delay.

Some projects, particularly new product launches, are inherently risky. Success criteria may not be clearly understood and the initial project approach might require a few corrections. From a project manager’s point of view, it would be preferable to undertake a thorough project planning process until all planning premises are clear and the budget estimates are solid. From a business owner’s point of view, the business benefit of being first to market might outweigh the risk of cost overruns.

The discipline of sticking to deadlines and budgets is critical to effective project management and, in most cases, the business benefits from such discipline. However, when there is a conflict between project management discipline and business benefit, the project manager must think like a business owner and promote the best interest of the business.

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OnPoint, LLC