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Project Portfolios and the GOSPEL of Integrated PM.

"If I use the principles of project portfolio management, then I can drive increased value through projects, but our project management and program management practices aren’t mature enough for portfolio management."

The Project Portfolio G.O.S.P.E.L.

I tell my clients that I have one of the best jobs in the World; I go all over the world teaching the GOSPEL. That is, the GOSPEL of Integrated PM. This is a common acronym used to teach project strategic planning, and project portfolio management. These two disciplines are tightly coordinated within Integrated PM. Below I’ll quickly explain the acronym. They represent the fundamental capabilities required for a successful portfolio management process.

GOAL

This represents the long-term purpose of your organization. A change here would require major structural reorganization, and seldom happens. Your goal in the GOSPEL, represents your organization’s mission. Many times, the goal of the organization isn’t even measured. Of course, this needs to change, as the Goal drives all other activity within the organization, and the activities of Integrated PM. Every system must have a single purpose, each sub-system within the system must also have a single purpose or ‘Goal. Every portfolio (or sub-portfolio) requires a goal.

OBJECTIVES

During strategic planning the Goal is segmented into the Key Strategic Areas which your organization must be successful in for the Goal to be achieved. Normally there are three to six Key Strategic Areas. If you can’t identify enough Key Strategic Ares, go down a level in abstraction. If you identify too many Key Strategic Areas, the combine some and go up a level in abstraction. Success in these Key Strategic Areas is not an option, failure in one is failure in the organization as a system. They therefore, all have the same priority. These Key Strategic Areas are called objectives for ease.

In Integrated PM, Objectives join to achieve the organizational goal. Think of them as separate components within the same system. Objective measures are critical to portfolio value decisions, and balancing.

STRATEGY

Because each of the organization’s objectives are so critical to your organizational success, you typically want to develop multiple strategies for accomplishing each objective which reduces the risk of failure. The strategy defines the operational concept, or technical approach to the objective. Strategies are typically controlled with guidelines, constraints, capabilities, and practical limitations.

PLANS

Our project plans should be linked to one strategy. Of course, typically multiple projects and programs are normally linked to a single strategy, but where it makes sense, a single project might support multiple strategies. This is referred to as a many-to-many relationship. The best-practice here is to focus more on authority and responsibility than on links. The links are used for reporting, alignment scoring models, finance and resource balancing, and shouldn’t become structural constraints.

EXECUTION

This is where the ‘rubber hits the road’ so to say. Your projects should cause strategic change when done right, but nothing can happen if resources aren’t available. Project ranking and prioritization enables limited resources to be applied where the most value can be produced. Once the portfolio management question can be answered, “Out of all the things that could be done, what should be done, given the limited resources?”, execution becomes paramount. The capacity plan kicks in at this point, and optimally places the right resources, at the right project, at the right time.

LEARNING

Now remember this, the entire purpose of this activity to drive change in the value indicators. There are six ways that projects can impact organizational value. Some of these value drivers cause change to the organization’s perceived value. While other drivers cause change to operational cost. At the end of the day, they all drive changes which increase the organization’s competitive advantage.

The question is, “How well did the project meet expectations?” Can we learn from the past, by measuring the present, to improve the future? This is the challenge of every Integrated PM team. To address this challenge, we use systems thinking and a measure framework that helps improve project portfolio decisions, resulting in improved project performance.

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Facilitating Integrated PM Projects (1 out of 11)

“If as a project manager I try to facilitate decisions, then the project team will feel more impowered, but they see me as always biased to my own desired outcome.”

OVERVIEW

In this opening blog post, I briefly illustrate the need for facilitation within the project management effort, define group facilitation, and give an overview of the Skilled Facilitator approach. We also see the key elements and how they fit together to form a values based systemic approach to facilitation and the larger Integrated PM effort.

There is a gap in the literature around what is needed from the portfolio, program, or project sponsor. Oh yes, a great deal has been said about the need of the Sponsor. But the literature is sparse on how to be a good sponsor.

THE NEED FOR GROUP FACILITATION

Groups are becoming the basic work unit of organizations, as opposed to the individual. Increasingly, we turn to groups to bring together differing views, produce quality products and services, and coordinate complex world of projects. In doing so, we expect groups to work effectively so that the product of their efforts is greater than the sum of the parts. Yet our experience with groups often leaves us feeling disappointed or frustrated.

Project teams, or groups do not have to function in ways that lead to ineffective performance, make it difficult for members to work together, and frustrate members. Project teams can improve how they work. This blog post series is about helping project teams improve their effectiveness by using the facilitative skills of each other, the project manager and project sponsor. It is about helping all types of work groups: top management teams, boards, committees, work teams, cross-functional teams, interorganizational groups, quality groups, task forces, and employee-management or union -management groups. Anyone who works with others needs facilitative skills, not just the sponsor.

Organizational consultants, internal and external, need facilitative skills when they contract with clients, diagnose problems, and recommend solutions. Leaders and managers need facilitative skills to explore stakeholders' interests and to craft solutions based on sound data that generate commitment.

Because organizations change constantly, the need for facilitative skills to support change is always increasing. This applies to a merger or acquisition, or downsizing, and to efforts to improve the quality of products and services, empower employees, develop a shared vision, develop a self-managing work team, or develop an organizational culture that makes these changes possible.

Organizations typically use project teams to plan and implement change, and project teams typically need some form of facilitation. In addition, facilitative skills have become more important as organizations try to openly and constructively manage conflict arising from the change they try to create.

At the heart of improving project the team’s effectiveness lies the ability of project team members to reflect on what they are doing, to create the conditions necessary to achieve their goals. Project teams find it difficult to openly examine behavior on their own; they often need the help of a facilitator.

WHAT IS GROUP FACILITATION?

Group facilitation is a process in which a person whose selection is acceptable to all the members of the group, who is substantively neutral, and who has no substantive decision-making authority diagnoses and intervenes to help a group improve how it identifies and solves problems and makes decisions, to increase the group's effectiveness. In many cases, the PM is within the project team, and require someone outside of the team, such as the sponsor to facilitate project team performance.

The facilitator's main task is to help the group increase effectiveness by improving its process and structure.

Process refers to how a group works together. It includes how members talk to each other, how they identify and solve problems, how they make decisions, and how they handle conflict. Structure refers to stable recurring group process, examples being group membership or project team roles. In contrast, content refers to what a group is working on. The content of a group discussion might be whether to enter a new market, how to provide high-quality service to customers, or what each project team member's responsibilities should be.

Whenever a group meets, it is possible to observe both content and process. For example, in a discussion of how to provide high-quality service, suggestions about installing a customer hotline or giving more authority to those with customer contact reflect content. However, members responding to only certain colleagues' ideas or failing to identify their assumptions are facets of the group's process. Underlying the facilitator's main task is the fundamental assumption that ineffective group process and structure reduces a group's ability to solve problems and make decisions. Although research findings on the relationship between process and group effectiveness are mixed, the premise of this blog series is that by increasing the effectiveness of the group's process and structure the facilitator helps the group improve its performance and overall effectiveness.

The facilitator does not intervene directly in the content of the group's discussions; to do so would require the facilitator to abandon neutrality and reduce the group's responsibility for solving its problems. To ensure that the facilitator is trusted by all project team members and that the group's autonomy is maintained, the facilitator should be acceptable to all members of the group; this person needs to be substantively neutral- that is, display no preference for any of the solutions the group considers- and not have substantive decision-making authority.

In practice, the facilitator can meet these three criteria only if he or she is not a project team member. A group member may be acceptable to other members and may not have substantive decision making authority yet have a substantive interest in the group's issues. By definition, a group member cannot formally fill the role of facilitator. Still, a group leader or member can use the principles and techniques I describe in this blog series to help a project team. Effective leaders regularly facilitate their project teams as part of their leadership role.

To intervene means "to enter into an ongoing system" for the purpose of helping those in the system. The definition implies that the system, or group, functions autonomously- that is, the project team is complete without a facilitator. Yet the group depends on a facilitator for help. Consequently, to maintain the group's autonomy and to develop its long-term effectiveness, the facilitator's interventions should decrease the group's dependence on the facilitator. Ideally, the facilitator accomplishes this by intervening in a way that teaches group members the skills of facilitation.

The Approaches to Facilitation

This blog series will consist of the following posts covering the various approaches to facilitation, ending with the systems approach used within Integrated PM.

  1. The group effectiveness model
  2. A clearly defined facilitative role
  3. Useful in a range of roles
  4. Explicit core values
  5. Ground rules for effective groups
  6. The diagnosis-intervention cycle
  7. Low-level inferences
  8. Exploring and changing how we think
  9. A process for agreeing on how to work together
  10. A systems approach
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What is Project Risk?

“If I perform risk management for a project, we might be more successful, but I’m not sure what risk really is.”

The original meaning of risk is associated with gambling- to risk is to gamble. When we take risks, there is a chance of gaining and perhaps an equal chance of losing. Project risk has evolved to mean more.

Uncertainty in business ventures has come to be known as risk. Every business venture is basically risky. In new business ventures, project initiatives, and new product development, there are unknown factors and their impacts on the venture are equally unknown. The unknown factors could be favorable or unfavorable. There is a probability that one may either gain or lose business value. However, a loss may hurt the venture. Most business ventures like to assess the probability of loss and compare it with the probability of gain. The decision to go ahead depends on whether the odds are favorable or unfavorable. Risk is the probability of suffering loss. Using this approach, the PMO or Project Steering Committee will not pursue a venture that has a risk probability greater than 49 percent. The odds must be in favor of winning the gamble, even though the tilt is marginal.

Definition 1.1: Risk is the probability of suffering loss.

A refinement of this definition is to include goals, gains, or opportunities in the statement. Perhaps it is implied and obvious that risks relate to gains. Nevertheless, if risks are divorced from the associated goals, then one sees just a set of problems. A risk list should not be reduced to a problem list. Risks have a much broader role to play. We should always include the expected and potential gains that a project offers in the risk assessment.

Definition 1.2: Risk is the probability of suffering loss while pursuing goals

Then there is the consideration of the magnitude of harm from the risk. What will its impact be? The consequence of the risk is evaluated. If the harm is tolerable but the gains are attractive, new decision rules can emerge. One may even take a risk where the occurrence probability is greater than 50 percent. The threshold is not 49 percent. Risk is seen as a weighed parameter and can fluctuate. The weight is based on the magnitude of loss due to risk, if the risk ever occurs.

Risk magnitude is measured using many different estimation methods. When the estimations form a range; such as a minimum of 12 and a maximum of 20, for a measure you want to maximize. You would compute half the distance between the max and min which is 4. Your estimate magnitude is 16 (the mean of the two numbers) with a risk of 4. 4 is 25% of 16, so you might report a risk magnitude of 25%. My point here is magnitude is dealt with in multiple ways.

Risk is defined as the combination of probability of occurrence and the magnitude of loss it causes. This combination is also known as risk exposure. The new definition below takes this into consideration.

Definition 1.3: Risk is the combination of probability and magnitude of loss.

Typically, project risk is defined and measured using Definition 1.3. Measure-ment of risk is often a subjective process. Both the probability and loss are measured using linguistic measures such as "high," "medium," and "low" which are nominal metrics. What matters is not just the risk, but its intensity, measured as risk exposure. Will the risk occur? What will the harm be? These are more significant questions than, "What is the risk?"

A clarification is due at this juncture. If loss occurs because of factors within our control, it is not considered as a risk. Only factors beyond our control give rise to risk. This is the general perception that makes risk management simple. Internal factors are within our control. Hence, only external factors that contribute to loss, which are not under the project manager’s direct control, qualify as risk factors. When this notion prevailed, people believed that they had not caused the risks.

Sometimes, processes are not in control and results are not predictable or what were intended. Such losses become risks. In this case, the origin is not the criterion - predictability and control are important factors. Hence, a complete risk definition would be:

Definition 1.4: Risk is the probability of suffering loss while pursuing goals due to factors that are unpredictable or beyond the PM’s control.

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Project Management with ‘FACET’ Process-Services™

“Project Management with FACET is a Process-Services™ offering of pmNERDS. This offering provides a process umbrella of FACET, and then line-items of an S.O.W. that can be chosen a la carte.”

Each surface, or facet of this gem represents an information structure of a project, program, or portfolio. Think of these facets as an information architecture. One architecture would contain the project activities or tasks. Another facet of this gem (project) could be a cost structure, another one a contract structure. There exists many structures or architectures for projects programs, and portfolios. Much of the information within these architectures have inter-connecting links and correlations to behavior or performance.

During our process consultancy, we address:

Facets- In Integrated PM, there are many facets of the project. In the PMI, they recognize knowledge areas, which become structures, or knowledge management frameworks in Integrated PM. Each information asset in the framework maybe interconnected with other assets.

Adapt- The PM has a plan, but even the best laid plan needs to adapt to the changing environments of projects. Good plans can be quickly adapted to deal with new conditions, poorer ones- well not so.

Communicate- Communication is KING during project execution. The communication plan facilitates communication. The project manager must communicate with the client, stakeholders, and project resources to keep the perceived value high, and optimize engagement.

Execute- With all the emphases on high-level thinking, who’s getting things done. Project Management is about getting things done, and must result in many people working together. They must crystallize thought and anticipate roadblocks. They require the sound judgement that comes only through execution of past projects.

Teamwork- As projects grow, the need for Teamwork is obvious, but even for a project when you’re doing everything, the feeling of ‘Team’ should exist between the client, stakeholders, and project members. Teamwork is the work required to keep the team functioning, not the work to accomplish the team’s goal.

The pmNERDS process consultancy provides a standard Project Management capability described by the acronym above. This is an umbrella capability needed regardless of any additional practices selected from our a la carte practice menu.

Project Management practices available for selection from the a la carte S.O.W. include Conflict Resolution, Monitoring Mechanisms, Governance, Performing Quality Control, Performing Cost Control, Team Management, Schedule Control, Project End-of-Life, Communicating, Performance Reporting, Stakeholder Management, and Responding to Risk.

Organizations that depend on projects to create value and increase process efficiencies, as seen in business units such as IT, Marketing, and NPD, should talk with us if they’re interested in increasing project performance.

After a quick discussion, we can direct you to the best process offering and a la carte practices based on your process improvement goals. By putting together a service package that addresses your key performance constraint, our sales team can help you get the quickest time-to-value, while minimizing risk and cost.

Want to learn more? Contact us either through email or phone.

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Project Management Performance-Service™

“If we engage pmNERDS’ Performance-Service™ for Project Management, then we’ll increase the organization’s competitive advantage, realize higher value from projects, and complete projects more efficiently, but it will require change leadership.”

Our performance improvement consulting practice for Project Management, begins with gathering information about your organization and engagement goals. We conduct a quick gap analysis to construct an engagement roadmap.

Once approved, we will build this roadmap out into a complete project plan and review it with our clients going over roles and responsibilities. We schedule weekly meetings to review the project and discuss relevant decisions. Depending of the length of engagement, steering committee meetings are also scheduled.

Daily scrums are scheduled to address issues and schedule any needed ad hoc meetings. Performance improvement consulting involves a great deal of planning and communicating. Underlying each practice is an element of process improvement and use of a standard performance measure framework.

Within this engagement we focus on:

  • the project request process,
  • ranking projects,
  • conducting the project initiation phase,
  • leading a project kickoff,
  • maintaining the communication and adoption plan.
  • Managing the risk log

Much of our time is spent addressing what is sometimes called the soft-skills of Project Management. But this differentiation isn’t complete. This is the “Doing” tasks of project management, after the plan has been specified.

Best practices performed by the project manager will be detailed. These facets of projects will be defined within the client’s environment. Coordinating tasks, managing plan buffers, expenses, and risks to name a few are detailed and examined with the objective to optimally categorize these activities as separate facets of Integrated PM. Then a study is conducted to begin the definition of correlations and inter-relationships between categorized components and project behavior.

We will review with the client the process of identifying the key performance constraints, and walk through effect-cause-effect thinking to validate assumptions and break project performance constraints.

By leveraging our experience, you can reach expected benefits quicker and with less false starts while being assured that you won’t paint yourself into a ‘process’ corner, and isolate information asset flow to downstream processes. Our performance consulting practice requires a discussion to determine goals, scope of effort, consultant alignment, and the development of a business proposal. We deliver an analysis of current project management process performance and constraints, a roadmap to performance improvement, process design, process exercise, process enablement, deployment, and measurement.

A large part of this effort is process training, skills mentoring, and performance coaching. Depending on the engagement, technology configuration or deployment may or may not be part of this effort.

You can discover more about this service offering by clicking the icon (email or phone) in the top right corner of our website. We’d love to discuss this Performance-Service™ offering and answer any questions you might have.

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Management Science

“If I assume that every project request is a valid request to address a problem, and not a solution to an unstated problem, then my team can design preferred solutions based on our experience, knowledge of our project portfolio, and of our capabilities, but there are many decisions we have to make understanding only part of the problem.”

With projects there is a great variety of decision-making problems impacting performance. In each instance, an Integrated PM approach, based on systems thinking, will lead to more insightful decision making.

The above diagram is an application of Management Science to the world of projects, and has been used in various industries for many years now. The assumption here is that;

  1. The problem has been clearly defined, implying that
    • the objectives of the decision maker are known and there exist criteria to ascertain when they have been achieved,
    • if there are conflicting objectives, trade-offs can be defined,
    • the alternative courses of actions are known, either as a list of options or a set of decision variables,
    • the constraints on the decision choices are known, and
    • the input data needed are available;
  2. That the problem is relatively well structured, meaning that
    • the relationships between the variables are tractable,
    • system behavior can be captured in the project plans, and
    • the computational effort for determining solution scenarios is economically feasible;
  3. The problem can be sufficiently well insulated from its wider system
  4. Optimization of the objectives, whenever possible, is ideal
  5. The problem is of a technical nature, devoid of politics; people are mainly seen as passive objects.
  6. If there are multiple stakeholders, a consensus can be reached about all aspects that affect how well the objectives can be achieved
  7. The decision maker has the power and authority to implement the ‘solution’ or enforce implementation through the hierarchical chain of command.

Yes, I know that this is quite an assumption. The fact is, any constraints in these areas will constrain every downstream project within the system. If you want performance improvement, then this is the first place to look.

In spite of all our PMI training, our system is managed in three phases illustrated in the diagram above.

(1) Problem Formation or Problem Scoping, (2) Problem Modeling, and (3) Implementation of Recommendations.

As shown, each phase consists of several steps. In practice, it is an iterative process where we may have to go back to earlier phases or steps to overcome unexpected difficulties, fill in omissions uncovered at a later stage, and alleviate or eliminate undesirable consequences. There are also forward linkages. At each step, we keep future steps in mind and are on the lookout for difficulties we may encounter. It may lead us to alter our initial approach and look for countermeasures, whenever possible.

I will address each of these 10 steps in future blogs. The diagram illustrates how Integrated PM holistically addresses the entire system, utilizing and solving for the concerns of portfolio management, program management, project management, capacity planning, project management and many more disciplines.

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Multi-Faceted Nature of Projects

“If I categorized and studied the correlations between all the factors (state variables) of project performance, then I could control and optimize the project’s performance, but gathering and computing this information would take too long, and the project portfolio’s state would change before I could interpret it.”

When we consider the many facets of enterprise project management we can quickly see we need a different way of examining the forest instead of analyzing each tree. Due to the lack of a standardized approach, the popular approach is to divide the various disciplines such as Risk Management, Resource Management, Project Management, Portfolio Management, Capacity Planning, Scheduling, and Finance and then approach each facet separately.

This approach while informative, lacks the ability to study the correlations and inter-relationships between each state variable and combinations thereof. This makes impact change analysis impossible at a macro level.

Looking at these facets holistically, as a single system, instead of a plethora of independent factors, and applying systems thinking to management questions and business objectives, we gain real insight and performance improvement.

First, we must list and categorize these factors. Lots has been done in this area, but we continue to grow this effort. Where it will stop, no one knows as mankind produces more and more innovative practices.

Secondly, with this categorization underway, the study of inter-relationships and performance correlations between the different categories can produce meaningful results. New macro-level policies and procedures can be put in place. Improvements to project portfolio performance begins. Management Techniques are defined and new intuitions developed.

Finally, when we begin to understand these correlations, we can apply effect-cause-effect thinking, identify and break performance constraints leveraging systems thinking.

At pmNERDS, the Center of Excellence is all about promoting and moving this practice of applying systems thinking to project management at all levels in the organization.

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