Top management support is crucial for project success, but top managers are not interested in project level concerns. Programme management is the crucial link because programmes deliver the business benefits required to realise strategic goals. However the project and programme management community will have to learn engage at the strategy level and focus on the achievement of strategic goals. The current approaches are too heavily influenced by project management concepts to be effective in engaging top management.

The need for top management support

IT governance guru John Thorp has advocated for some time the need to manage projects at the programme level in order to realise the desired benefits. I’ve come to the same conclusion from a different angle:

There is now strong evidence that top management support is the most important critical success factor and is not simply one of many factors [i].

If so, then it is very difficult for projects to succeed if top managers do not consider project management to be a matter of direct concern and they don’t [ii].

If projects don’t succeed (in delivering business benefits) then corporate strategies aren’t implemented. Everyone loses. (This almost certainly appears to be the case with one of the best performers in the public sector: the State of Victoria; and it is likely to be the case with the rest of us. It is well known that two thirds of projects deliver no value at all [iii]).

This situation is very dysfunctional with as much as 3% of GDP is being lost because project managers can’t get the attention of top managers.

We can engage top managers through programme management

We believe there is a conceptual chasm between the top management and project management community. They do not have a common language and do not work together to achieve common goals. We have documented our analysis in Bridging the TMS-PM conceptual divide. Our major findings are:

Project management is increasingly being used to implement strategy; an application it was not designed to meet. Projects deliver products that might enable a strategy but they rarely if ever deliver strategies.

Portfolio management is not a solution because the focus is on the selection of projects. If projects cannot deliver a strategy then no matter how well you select projects, it will not result in a strategy being delivered. For strategic goals to be met, it is essential that portfolios are portfolios of programmes not portfolios of projects. This is not how PPM (project portfolio management) is currently practiced.

Programmes are the vital link between strategy and the realisation of strategic goals. We must as John has stated, focus our attention at the programme level. Plan for, select and fund entire programmes (or not). Our point of difference is that we believe mainstream programme management is currently too immature, too inflexible and too influenced by project management to engage the top management audience. Programme managers cannot assume strategy is delegated from on high and only needs to be implemented. The practice of programme management much be enhanced to deal appropriately with much lower levels of certainty than practitioners of strategic planning and programme management have traditionally assumed.

Finally active governance by top managers is essential to go beyond planning to actually realise the desired benefits over time. The future is inherently unpredictable and top level governance is required to steer or navigate around unexpected obstacles. Governance is not how the project management methodologies have portrayed it: to have a steering committee or a project board. Governance is an attitude and requires an active questioning. The 6Q Governance™ framework, an enhancement of HB280 and AS8016, is an excellent guidance that we recommend to all.

But we need to lift our game and learn to contribute to strategy

However, we face an uphill battle overcoming a considerable misdirection of effort being promoted by the project and programme management community. This might seem an arrogant statement but we would ask you to consider how many project managers operate at the level of the board or C-suite? An earlier blog summarised a professional presentation for ISACA that considered board level decision-making. The quotes below are taken from the ‘decision-making’ module of the AICD Company Director’s Course and we believe the last quote may apply particularly to the current thinking in the project and programme management communities. If we are to engage the top managers we need for our success, we need to do it at their level so that both they and we can succeed. The level at which we must engage is strategy and the achievement of strategic goals.

“Decision-making is a process rather than something that occurs in a single point in time”

“The process … begins when we need to do something but we do not know what”

“People in organisations such as managers must pass through stages in mastering greater and greater complexity. This is not a matter of handling more and more information, but learning what information is important – what not to think about – to focus on what is really important” Jaques (1998)

“When a person is out of their depth in terms of the level of complexity they have to handle, they will implement mechanisms to maintain control such as cutting the debate, seeking to silence people … often unconscious behaviours designed to avoid their own lack of understanding”

[ii] L. Crawford, “Senior management perceptions of project management competence,” International Journal of Project Management 23, no. 1 (2005): 7-16, http://www.sciencedirect.com/science/article/B6V9V-4D636C6-4/2/b6479d1c140991c277782e9cfaff6ffb .

[iii] R. Young, “What is the ROI for IT Project Governance? Establishing a benchmark.,” in 2006 IT Governance International Conference (Auckland, New Zealand, 2006).

But our research shows us that even for those at the forefront of practice, many of the approaches with the most potential to improve project success have not been incorporated.

Our research, commissioned by the Victorian Auditor-General’s Office, showed billions of dollars were invested in projects in Victoria, and yet often the expected strategic benefits are not being realised. Research we have undertaken on the private sector suggests it struggles with exactly the same issue. (In 2008, fewer than 178 of the 2224 ASX listed companies (8%) report their IT investment, and there is no apparent requirement to report investments in soft projects). If one of the best performers does not have the tools to help it achieve its strategic goals, what are the implications for the rest of us?

We have commented earlier that the tools with the most potential to address this issue (portfolio management, programme management, project governance) are too immature in their current state to be widely adopted and overcome the issue.

The specific issue that needs to be addressed is to increase the flexibility of tools to:

1. provide feedback on the effectiveness of strategy, and
2. contribute to changing and refining of strategy as it is implemented and lessons are learned (current approaches are too mechanistic).

To advance the discussion, we have just documented our findings in our paper Governing programmes for strategic success – implications from Victoria submitted to the 2009 International Research Workshop on IT Project Management, a special interest group of the International Conference on Information Systems (ICIS) 2009 (recognised as ‘the most prestigious gathering of IS academics and research-oriented practitioners in the world’). We are also considering presenting another version of this paper in Melbourne in Feb 2010.

This post extends the invitation to participate to the entire online community. We wish to go beyond project management and ‘find more appropriate programme and portfolio management approaches that can be adopted with confidence by senior decision makers’. All contributions will be acknowledged and there is the opportunity to incorporate them into an advanced course being developed initially for the University of Sydney.

Please read the blog posts on this site, download the academic paper and share your initial thoughts by posting below. I encourage you not to hold back, and to help shape an initiative that will improve education / health / police / environment / defence / business results by 4-8 times.

We all win if governments get better results with lower costs.

Having raised the question in a earlier post of why billions of dollars invested in projects were not resulting in the realisation of strategic benefits, this post explores whether project portfolio management has a part to play.

Project portfolio management (PPM) practice may be deficient in two main areas:

1. PPM not is practiced in a way that supports strategy development.
   1. It is common practice to focus on project risk, a lower order concern, but even then fewer than 33% of organisations report they diversify projects to manage portfolio risk.
   2. PPM is mainly used to manage resource conflicts
   3. Investments in software are therefore not justified in most cases.
2. PPM focuses decision-making at the wrong level.
   1. For strategy to be implemented and strategic outcomes realised the key is to select the right programme rather than the right project (projects alone rarely deliver the desired strategy).
   2. PPM must support programme management more adequately.

this post is an extract from an academic paper prepared for the IT Project Management SIG meeting at the 2009  International Conference for Information Systems

Project portfolio management (PPM) is a well established field, particularly in the US. It has an extensive literature and is supported in industry by an established and growing PPM software market. Portfolio management has its conceptual foundations in portfolio theory applied to the selection of financial investments to reduce risks and increase returns [1]. This theory was applied to the domain of project portfolio management to select IT projects [2] and PPM software vendors market on the basis of being able to reduce risk and increase returns on a portfolio of project investments [3].

However, the question is whether PPM adds any strategic value [4]. Portfolio selection has been justified in the context of selecting new product development projects [5], but it is far less convincing when applied to the implementation of strategy. A significant problem arises because there is a disconnect in the way strategy is developed and way the strategic is planned [6].  Strategy development is fluid and emergent. Strategic planning, especially when following the current approaches to PPM is relatively inflexible and mechanical. Project selection tends to be based on first degree criteria identified through risk management tools [7]. In contrast upper level strategic decisions have traditionally relied on non-linear processes and higher level considerations. As a result relatively few organisations use PPM strategically. Fewer than 33% of organisations report they diversify to reduce portfolio risk [4] and in our experience PPM is never used to inform or implement strategy. PPM is mainly used to manage project resource issues.

The potential of PPM appears to only be justified when other aspects are in place such as top management commitment, agreed benefits measurement and a willingness to deal with project interdependencies and resource constraints  [4]. Some believe that PPM, because it is meant to deal with fairly stable environments, can only be effective if combined with programme management which is meant to deal with more turbulent environments and emergent strategies [7]. We would agree and add that by definition, strategic outcomes can only be achieved when a whole program is undertaken. If strategic outcomes are to be realised, it makes no sense to select individual projects, selection criteria must be at the program level.

The Victorian public service investment frameworks are quite closely aligned to the concepts of project portfolio management because they emphasise selecting the right projects. However some Victorian managers believe the tools and frameworks are simply guidelines with little voluntary application and little influence in practice. This conclusion can be applied more generally because Victoria  is a leader in New Public Management and for many represents best-practice. This discussion goes some way to explaining why PPM concepts have not had more influence or lead to the realisation of strategic benefits. The crucial deficiency seems to the absence of meaningful linkages to programme management.

References

[1]    H. Markowitz, “Portfolio Selection,” The Journal of Finance,  vol. 7, 1952, pp. 77-91.

[2]    F. McFarlan, “Portfolio appraoch to informatiuon systems,” Harvard Business Review, 1981, pp. 142-150.

[3]    CA, “Leading Market Research Firm Finds PPM Software Delivering Over 500 Percent ROI – CA,” 2009.

[4]    B.D. Reyck, Y. Grushka-Cockayne, M. Lockett, S.R. Calderini, M. Moura, and A. Sloper, “The impact of project portfolio management on information technology projects,” International Journal of Project Management,  vol. 23, 2005, pp. 524 – 537.

[5]    A. Jamieson and P.W. Morris, “Moving from corporate strategy to project strategy,” The Wiley Guide to Project, Program, and Portfolio Management,  Hoboken, NJ: John Wiley & Sons, 2007, pp. 34-62.

[6]    H. Mintzberg, “The fall and rise of strategic planning,” Harvard Business Review,  vol. Jan-Feb, 1994.

[7]    M. Thiry and M. Deguire, “Recent developments in project-based organisations,” International Journal of Project Management,  vol. 25, 2007, pp. 649 – 658.

For starters, I don’t like to see myself as a Project Manager. I am a People Manager and cheerleader. My passion doesn’t lie in getting the project to the goal of within schedule and under budget, though that is important. Instead, I hold higher importance on the process of getting the team to a place of ‘I want to take hold of the vision that my PM has given me’.

Before you brush this aside thinking it’s too touchy feely, think again. What’s the point of having all the right tools and methodologies (which I do live by!) but you don’t have a team that is willing to support you in the delivery of the project, because you haven’t provided the support they need in the first place? In my view, support means when someone is struggling, you struggle with them, and when they have a win, you cheer with them.

My role isn’t just about aligning Gantt charts, balancing financials, documenting plans, being a task master, and following PRINCE2. Underlying this, it is about gathering the team, seeing eye to eye, building trust, having the gut feel of when someone needs help and is too afraid to say it, leveling out egos to ensure all are team players, and coming alongside so that it is not a ‘you versus me’ culture, but a ‘what are we doing to make this work together’ culture. In other words, it’s aligning what is in your head to the things of the heart. The things of the heart set the right foundations for a successful project to satisfy the things of the head.