Review: PPM! Manage Your Organization Masterfully with Project Portfolio Management

During The PMO Conference Chris Garibaldi presented Deloitte’s Project Portfolio Management framework. After the conference Chris sent me a copy of the book he wrote in 2015 together with Jason Magill, Matthew Ku, Michael Ravin and Christopher Martin. In this post you find a review of this book: PPM! Manage Your Organization Masterfully with Project Portfolio Management. The document is divided into seven chapters explaining the value, the PPM framework, PPM maturity, PPM transformation, PPM implementation, PPM technology and their view on PPM’s future.

Chapter 1 explains the value of PPM, why do we need to have PPM. The value can be found in the following areas: portfolio alignment (doing the right projects), in-flight portfolio health (will the projects deliver value), business partner culture, and the gift of time (efficient PPM processes, management oversight).

The second chapter explains Deloitte’s PPM framework in detail. In the model, the PPM “Racetrack”, you see four primary capabilities: Demand Management, Project/Program Management, Result Management and Portfolio Management (Resource Management, Financial Management and Governance). All four capabilities complement each other through a cyclical flow of information.

Chapter 3 puts the PPM Maturity in the spotlights by using Deloitte’s D.MAP PPM Assessment Steps and Roadmap Development. The model starts with a current state assessment followed by a gaps and future needs identification resulting in a future state incremental roadmap. In the assessment the five capabilities (resource management is now seen as a separate one in comparison with the four capabilities of the PPM framework) are being analyses. Like many maturity models we see five maturity levels (initial/ad hoc, defined, managed, measured and optimised).

The PPM transformation is explained in chapter 4. Without organisational adoption of the PPM framework you will not get the benefits. Key are the people.They are the users, suppliers and benefactors of PPM. In this chapter the authors give you an oversight of concerns and perceptions of project managers and project participants, concerns from program managers and resource managers as well as requirements and conditions to be understood and supported by executive leaders. The chapter ends with some scenarios encountered by frustrated clients: heeding the dashboard luring call, sending a less-seasoned to do a senior leader’s job, you can worry about organisational adoption tomorrow, you just want something that comes out of the box, and ignorance is a bliss.

Chapter 5 describes what a PPM implementation entails by using a case study. The following steps are explained:

• Implementation project leadership and sponsoring team;
• Implementation work plan;
• Organisational change;
• Process and functional thread (using conference room pilots);
• Deep technical thread.

In chapter 6 we get an eight step approach for a long-patch PPM tool selection.

The final chapter elaborates a little bit on PPM’s future, being self-evident due to the value it brings.

Conclusion

The document gives a good overview of Deloitte’s Project Portfolio Management framework.What I miss is some advice how to cope with business agility, many organisations are implementing permanent agile trams using scrum, kanban, devops etc. How to give the work these self organising teams have to perform a place in this PPM framework. This is at this moment also lacking in industry best practices like Management of Portfolios (MoP, Axelos) and The Standard for Portfolio Management (PMI). A comparison with these methods could be valuable too.

A first comparison from my side:

Deloitte’s PPM		Management of Portfolios (MoP)	Standard for Portfolio Management
Demand Management		Portfolio Definition Cycle Principle / Strategy Alignment	Process Groups: defining, Aligning Knowledge Area / Portfolio Strategic Management
Project/Program Management		Portfolio Delivery Cycle / Management Control	Process Groups: Authorizing / Controlling Knowledge Area / Portfolio Performance Management
Result Management		Portfolio Delivery Cycle / Benefits Management	Process Groups: Authorizing / Controlling
Portfolio Management	Resource Management	Portfolio Delivery Cycle / Resource Management	Process Groups: Authorizing / Controlling
	Financial Management	Portfolio Delivery Cycle / Financial Management	Process Groups: Authorizing / Controlling
	Governance	Portfolio Delivery Cycle / Organizational Governance Management Principle / Governance	Knowledge Area / Portfolio Governance Management
Unclear if it’s covered by Deloitte’s PPM		Portfolio Delivery Cycle: Stakeholder Engagement / Risk Management Principles: Senior Management Commitment / Energized Change Culture / Portfolio Office	Knowledge Area / Portfolio Communication Management / Risk Management

To order: PPM! Manage Your Organization Masterfully with Project Portfolio Management

Where run and change the business from a portfolio perspective meet and integrate

If we look at traditional portfolio management, like MoP or SfPfM, the focus is on doing the right projects and programmes in the right way and delivering business benefits. These are temporary set-ups to help the organization to change. I would say the traditional change in the perspective of change the business and run the business. See attached figure 1 which shows the position of portfolio management in this traditional world according tot he MoP framework.

We see, more and more, organisations benefit from the fact to keep multi disciplined teams together to deliver more often and faster changes to existing products, systems and processes to accommodate business agility. These teams become permanent and will have their position in the organizational structure. This means these teams become part of the Business as Usual / Run the business environment. In this case, the work to be done, the functional changes, additions, regulatory changes etc. will be brought to these teams. The teams can focus on the development or become DevOps like teams. And this is a complete mind shift if I compare this with the traditional projects and programmes where the people are brought to the work itself.

I expect that the number of projects and programmes will decline because much of needed changes will be handled by these permanent teams. I don’t believe projects and programmes will disappear completely. For transformations, developing new product/market combinations, organizational and/or behaviour changes etc. we still need these temporary projects and programmes but after delivering, and closing these projects/programmes, new permanent teams can be established to maintain and operate the results. In these situations, we can still benefit a lot from frameworks like PRINCE2 Agile, AgilePM, MSP, RPM, and AgilePgM.

We see an enormous increase in the usage of agile delivery frameworks like Scrum by these permanent delivery teams. We also see an explosion of the number of these teams and this asks for a certain level of coordination between these teams. Delivery of specific changes may ask for orchestration between these permanent delivery teams. The usage of Scrum of scrums is not enough and new frameworks to help with this coordination are needed. Frameworks like Nexus and SAFe are developed to support this orchestration.

Like we had in the past, also for these permanent teams we need to prioritize the work to be done. At the lowest level, the development team itself, a product owner can do the prioritization, and if there are a few teams a group of product owners can discuss and agree about the prioritization among the teams. But when we have more and more teams there is definitely a need for portfolio management at the highest level. The SAFe framework contains a portfolio level to divide budget between different value streams based on the alignment with strategic themes. Within the value streams epics are prioritized by using backlog and using simple business cases or mechanisms like Weighted Shortest Job First (preference for those epics with the shorter duration and higher Cost of Delay).

As a result, we will have two portfolio management mechanisms. One for the temporary bigger one-time changes in the Change the business organization and one for the changes managed by the permanent delivery teams in the Run the business organization.

I would suggest to integrate these two mechanisms into one portfolio office. In figure 2 I changed the original set-up based on MoP and suggest to integrate the portfolio part of SAFe with MoP.

It still starts with Strategic / Business Planning. The Portfolio Office needs to be closely aligned with this strategy team. Based on the strategy there will be the understanding of strategic themes (SAFe) or categories (MoP). Here we also need to understand which value streams in the organisation are supporting the strategy. As a result, one or more permanent teams can be dismantled or added. In the traditional set-up portfolio management was only looking at Change the business and prioritized the work to be done by the Programme and Project Management organization. Now we see that also the work to be done by the Development / DevOps teams as part of Run the business needs to be prioritized. During the Understand practice (MoP) we will look at all traditional changes and Epics and categorize them across buckets for the traditional (temporary) world as well as the Backlog for the (permanent) world. Following the SAFe framework these Epics can be assigned to the corresponding Value Streams and within the Value Streams (outside the portfolio Office) to the corresponding Agile Release Trains and from there, via the Program Increment Planning meetings to the delivery teams.

I am looking forward to your ideas regarding this set-up. Many people are looking for Agile Portfolio Management. Maybe this article can trigger a discussion and as a result an outline of Agile Portfolio Management can be co-created.

DICE, a tool for executional certainty

I received a mail from the Boston Consulting Group. Among other topics they highlighted their DICE tool to access and set up change initiatives. The DICE framework is a tool originally developed by Perry Keenan, Kathleen Conlon, and Alan Jackson (all current or former Partners at The Boston Consulting Group). By using this DICE tool, BCG claims that you can dramatically improve the odds of success.

In one of my previous posts regarding MoP practices in practice I already made a reference to this tool.

It’s a very simple tool to position your project on the DICE chart. Based on five questions you get an indication if your project is positioned as win, worry or woe. A project in the woe area is structured or guaranteed to fail. The tool gives suggestions for improving your DICE score. And of course it’s much more important to have a conversation about the scores and what you can do about it than only look at the final score itself!

The DICE score (D + 2I + 2C + C₂ + E) is based on:

Duration (D): Either the total duration of short projects, or the time between two milestones on longer projects

Team Performance Integrity (I): The project team’s ability to execute successfully, with specific emphasis on the ability of the project leader

Commitment (C): Levels of support, composed of two factors:

• C₁ visible backing from the sponsor and senior executives for the change
• C₂ support from those who are impacted by the change

Effort (E): How much effort will it require to implement (above and beyond business as usual)

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In the embedded video from Perry Keenan you get an intro to the DICE tool.

If you go to the BCG DICE website you can get access to the DICE calculator, DICE FAQs and a library with the original HBR article The hard side of change management.

You will also find a set of small videos explaining the assessment of the DICE score, Duration, Integrity, Commitment and Effort and the setup of a DICE workshop and the DICE portfolio.

You will also get access to some related documents like:

• A way to access and prioritize your change efforts (new HBR article about the DICE tool)
• Leading change in turbulent times (about emotional turmoil that can drastically undercut the change effort)
• Transformation: The imperative to change (Case studies of transformation excellence)
• Executing Change beyond the PMO (from PMO to SIO: Strategic Initiative Office)
• Strategic initiative management: the PMO imperative (The role of the PMO).

Conclusion: a simple tool, be accompanied by many relevant documents and videos. It is shared by BCG and can be very helpful in assessing your own portfolio and to trigger conversations about the focus in your portfolio and individual interventions for your most important projects!

MoP: Organizational energy

It’s a good start to have your processes in place to accommodate the practices of the portfolio definition and delivery cycles. But you need more. If there is no commitment of senior management it will be a mission impossible to accomplish the portfolio goals.

Your staff must show involvement, looking for new opportunities, new innovations, willing to take decisive actions to solve problems because they want to work for a successful organisation, or in other words they must show productive energy.

MoP describes the energized change culture as one of the principles and sees this organization energy as the linking pin between the two portfolio management cycles. The energy is the “fuel” for change and performance.

Being successful is all about people and in that sense it’s a pity the MoP manual spends just a few pages on this topic. Searching on the Internet gave some interesting presentations and articles from Vogel.

Henley Business School/Vogel defines organizational energy as ‘the extent to which an organization (or division or team) has mobilized its emotional, cognitive and behaviour potential to pursue its goals.’

This article is divided into the following paragraph:

• Intro
• Portfolio management principle 5: Energized change culture
• Organizational energy matrix
• What is the energy state of your company?

To download: MoP (practice Organizational energy, 150515) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP: Portfolio management organization

To implement en maintain portfolio management in your organization you need to have senior managers who are committed to portfolio management. The first step will be the institutionalization of a portfolio board. In line with the P3O and MoP theory we see the following portfolio bodies and teams (see Figure 1: Portfolio management organization):

• Portfolio Direction Group or Investment Committee
• Portfolio Progress Group or Change Delivery Committee
• Portfolio Office (permanent)
• Centre of Excellence

This article is divided into the following paragraph:

• Overview
• Purpose and responsibilities

To download: MoP (practice Organization, 150422) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice 5: Plan. How to create a portfolio plan?

The purpose of the ‘plan’ practice is to collate information from the portfolio definition cycle and create a portfolio strategy and portfolio delivery plan which will be approved by the portfolio direction group/investment committee. Both documents can be combined in a single document (Portfolio strategy and delivery plan). The objectives are to:

• Provide a longer term overview
• Provide clarity to stakeholders
• Motivate people to commit to the delivery of the shared goals
• Convert the balanced portfolio into a plan
• Provide a baseline (the portfolio delivery plan) against which progress can be monitored, reviewed and managed (via a portfolio dashboard).

The portfolio office will normally update the plan on at least an annual basis in close cooperation with the business strategy, finance and performance management functions in your organization to assure that the plan is still aligned with the corporate (mid term) strategic, financial and business plans.

This article is divided into the following paragraph:

• Portfolio delivery plan
• Examples
• Keys to successful planning

To download: MoP (practice 5 Plan, 141128) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice 4: Balance. How to get a balanced portfolio?

The purpose of the ‘balance’ practice is to ensure that the resulting portfolio is balanced in terms of factors such as timing, coverage of all strategic objectives, impact across the business, stage of initiative development, overall risk/return profile, and available resources.

You have to ask yourself if your prioritized list of initiatives (of all categories or segments) is still optimum.

This article is divided into the following paragraphs:

• Factors to take into account if your prioritized list of initiatives is still optimum
• Possible graphical representations to support decision making
• Keys to successful balancing

To download: MoP (practice 4 Balance, 141109) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice 1: Understand. How to obtain a clear and transparent view?

The purpose of the ‘understand’ practice is to obtain a clear and transparent view of what is in the current portfolio and the project (initiative) development pipeline, performance to date and, looking forward, the forecast costs, benefits, and risks to delivery and benefits realization.

But you have to be careful with transparency, see e.g. the quote from the Victor Lamme, professor of cognitive neuroscience at the University of Amsterdam (see article). You could also ask yourself if the transparency is one of the reasons why senior management are sometimes hesitating to implement portfolio management. Do they want to show what change initiatives are there in the pipeline to the whole organization? What does it mean or do with the organization if they are aware of an upcoming reorganization or transformation? On the other hand if there is no transparency, if not all initiatives are clear, it will be very difficult, if not impossible, to build a portfolio that is achievable.

This article is divided into the following paragraphs:

• Collection of the needed and consistent information
• Approaches to obtain initiatives
• Keys to successful understanding

To download: MoP (practice 1 Understand, 141006) v0.1

This post will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice 2: Categorize. How to define groups or segments?

The purpose of the categorize practice is to organize change initiatives into groups, segments or sub-portfolios to make it easier for senior management to understand what initiatives are part of the portfolio and how they will contribute to e.g. the strategic objectives of the organization. It will also help to decide on the balance of the portfolio across the different categories and on the optimum use of available resources (funding, people). Allocation of available resources across the different segments must reflect the strategic alignment of each segment. Each group or segment can have its own investment criteria to appraise and prioritize.

This article is divided into the following paragraphs:

• Reflection on a simple portfolio
• Categories or segments
• Agile development teams
• Building your segmented portfolio
• Keys to successful categorization

To download: MoP (practice 2 Categorize, 140926) v0.1

This post will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice: Prioritize 3. How to build a prioritization model?

The purpose of the prioritize practice is to support senior management, portfolio board or portfolio governance body to answer the following questions:

• Which initiatives are the right projects to invest in?
• What are the most important initiatives?
• What initiatives must be resourced above all other initiatives?

The official MoP manual stated that answering these questions is only possible when all initiatives have been prioritized. This prioritization can be done for the portfolio as a whole or when the portfolio has been divided into several categories or segments, for each category or segment.

In this article I will emphasis on the how. I will look at the approach and will go a step further than the manual to give you more in depth details what you have to do. E.g. the manual stated “Agree the importance of each criterion by assigning a weighting or percentage of relative importance – and ensure that the total percentages of all criteria add up to 100”. Sounds easy, but how can you decide and calculate which weighting or percentage of relative importance you have to use for each criterion?

This article is divided into the following paragraphs:

• Different types of metrics or selection criteria
• Single criterion analysis
• Multi-criteria analysis (MCA)
• Keys to successful prioritization

To download: MoP (practice prioritize, 140908) v0.1

This post will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.