OnPoint, LLC

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.

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.

Lean – Agile Program / Portfolio Management – What’s New?

As organizations begin to scale the use of lean-agile methods, they soon identify impediments in the area of program & portfolio management.  Following are three major categories of impediments, as summarized below:

  1. Funding - Project-level budgets established 12-15 months in advance cannot accurately predict agile funding requirements
  2. Capacity / Change Management – the flexibility of agile scoping and delivery will quickly overwhelm granular resource capacity plans
  3. Governance – Traditional metrics regarding (time, cost, quality) and phase-gate reviews do not accurately depict the health of agile projects, so more meaningful metrics are needed

Clearly, the movement toward  agile development will require some significant rethinking of program and portfolio management.  The Scaled Agile Framework (SAFe) provides a unique perspective on lean-agile program portfolio management.  Among other things, SAFe proposes a continuous flow of epics rather than discrete projects with specific start-end points.  It also proposes lightweight business cases and rolling wave planning among other changes.  Following is a link to a SAFe abstract on lean program portfolio management:


The SAFe abstract also references a case study on agile portfolio management from DTE Energy.  It can be viewed by clicking on the link below:





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.

Values – Aspiration vs. Reality

The Values section of business plans commonly mention customer focus and respect for others.  Unfortunately, it is a bit less common to see these values at work in the organizations.  Why is there such a difference between the plan and reality?  All too often, the values statements in the business plan are not consulted when making day-to-day staffing decisions.  Who is promoted, who is hired, and who is terminated?  The result of these decisions is commonly a management team that falls considerably short of the aspirations stated in the business plan.

Reflect on the attitudes and aptitudes of the key members of your management team, and consider the following:

  • Are they noted for their technical expertise rather than their understanding of the business or customers?
  • Do they employ distrustful or contemptuous language when describing their interactions with customers or colleagues?
  • Do they complain when customers change plans or priorities?
  • Do they excessively control the flow of information between their team members and the customer?
  • Would you characterize their personality as fault-finding rather than problem- solving?
  • Are they verbally abusive to those who report to them?

Decisions made in promoting people to leadership positions should be consistent with the strategic plans.  Otherwise, the entire organization will conclude that the plans are “merely words” and not to be taken seriously.

OnPoint, LLC