"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."
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.
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.
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.
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.
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.
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.
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.