Success, maturity, matrices and portfolio presentation by Robert Buttrick

Robert Buttrick 17 June 2015

Projects fail,

are late,

overspent or

never started

No clear strategy No defined

approach

Wrong projects started

Projects not aligned to strategy or to each other

Short term focus

Business plans do not reflect strategy

Decisions not aligned

Inadequate prioritisation

Functions reverse previous

decision

Too many projects started

No support systems

Lack of open resource management

Resources are overstretched

Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009

It’s not enough to be good at project management

Excellence is not enough . . .

Successful project management

Successful project

Successful business

So what makes the difference?

Successful project management

Cost

Time Scope


Successful project

Cost

Time Scope

Area of benefit viability


Successful project

Cost

Time Scope



Successful project

Cost

Time Scope



Successful project

Cost

Time Scope



A successful business

Example of a “herd of projects”

0.0

1.0

2.0

3.0

4.0

Time

Be

ne

fits

(E

uro

m)

Project 5

Project 4

Project 3

Project 2

Project 1

Current


How well we perform

Maturity and its implications

Stage 0 Stage 1 Stage 2 Stage 3 Stage 4

Informal management

Portfolio excellence

Project excellence

Collaboration excellence

Functional excellence

© Copyright Pittiglio Rabin Todd & McGrath See also The Project Workout, Robert Buttrick, FT Prentice Hall, 2009

. . . Significant advantages


Project excellence


Average growth

Profit advantage

TTM Index

Productivity increase

8% 12% 19%

2.0 1.0 0.8

35% 54% 67%

0% 10% 25%

© Copyright Pittiglio Rabin Todd & McGrath

Maturity and its implications

Stage 0 Stage 1 Stage 2 Stage 3 Stage 4

Informal management


Project excellence

Collaboration excellence


Can be led from the “middle” Must be led from the “top”

Working across the organisation

Unit A Unit B Unit C Unit D Unit X

Projects cross departmental (unit) boundaries

time

Eff

ort

A

B

C

The two dimensions of the matrix

Project dimension

Business focussed

Benefit focussed

Flat

Flexible

Line dimension

Cost control focussed

Line manager focussed

Hierarchy

Stability

“We value cost centre budgets over business performance.”

“We value business performance over cost centre budgets.”

Benefits Project Sponsor

The Matrix

Low

High

Authority of the project

sponsor and manager

Co-ordination Full project Matrix

High

Low

Authority of the line manager

Functional

Matrix

Project

Matrix

Balanced

Matrix

Strong

Weak

A definition . . .

Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.

Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing of power is a delicate proposition.

Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.

Source: http://en.wikipedia.org/wiki/Organizational_structure#Matrix_structure

http://en.wikipedia.org/wiki/Organizational_structure

A definition . . .

Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.

Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing of power is a delicate proposition.

Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.

X

Tipping the balance

Chief Executive

Benefits

Benefits

Project Sponsor

Project Sponsor

Portfolio


Focussing your entire effort on what matters

Portfolios ?

Portfolio (MSP and MoP)

The totality of an organisation’s investment (or segment thereof) in the changes required to achieve its strategic objectives.

Portfolio management (MoP)

is a coordinated collection of strategic processes and decisions that together enable the most effective balance of organisational change and business as usual.

Portfolio (APM)

A grouping of an organisation’s projects and programmes. Portfolios can be managed at an organisational or functional level.

Portfolio management (APM)

The selection, prioritisation and control of an organisation’s projects and programmes in line with its strategic objectives and capacity to deliver.

Portfolios ? Portfolio (ISO)

collection of portfolio components grouped together to facilitate their management to meet strategic objectives.

Portfolio component (ISO)

project, programme, portfolio, or other related work

.

Portfolio – ISO view

A “portfolio”

Portfolio

Sub-

Portfolio

Programmes Projects “other work”

Projects “other work”

Done in full, it’s a completely different way of looking at your business – benefits and value focussed.

Sub-

programmes

Portfolio management provides . . .

Strategic alignment

Making sure we are all facing the same way towards the same objectives. From this: To this:

Balance

Reduce our exposure to extremes, near term versus long term, new products versus old cash cows; etc

Risk assessed

We can afford to take risks, if we aren’t taking risks on everything.

Aligned capabilities

Knowing we will have the skills and resources to complete our business plans From this: To this:

Capacity for change

Knowing our people, customers and suppliers can absorb the changes we need to do.

BT Values

10

tonne

Unit Unit Unit Unit Unit

Suppliers

Business Portfolio: Sub-portfolios, programmes, projects, processes

Inputs

Services

Products

Customers Benefits

Projects

End to end processes (Bau)

Business portfolios are the 2nd dimension of the matrix

Customer and value driven and cost

constrained.

Unit Unit Unit Unit Unit


Customer and value driven and cost

constrained.



Services

Products

Customers

Inputs

Business portfolios are the 2nd dimension of the matrix

How well we perform - maturity

Customer service

delivery

Common way

for business

portfolio

management

Cost

transformation

Investing for the

future

Aligned

capabilities

Balanced

portfolio

Strategic

alignment

Reduced time to

market

Healthy

organisation

Less stressed staff

More projects

completed, RFT

Joined up risk

management

More benefit for

same cost base Fewer, better

initiatives • Approve only

what we need

• Approve only

what can be

done

• Kill bad projects

early

• Make better

business

decisions

Processes which

work, end to end

Change which

can be absorbed

Consistent service

and operations

There are clear benefits, which contribute to strategic objectives

What sets high performing organisations apart?

Booz & Co’s annual Global Innovation 1000 research confirms PMI’s findings: it isn’t how much money you spend on innovation that counts, but the quality of the talent, processes and decision making. These are the pillars of effective portfolio, programme and project management.

Those with higher portfolio management capability perform better.

Source: The high cost of low performance; PMI; March 2013

Some more research

PMI survey

Gartner sets the challenge . . . .

By 2015: 60% of the Fortune 1000 will establish an EPMO to improve the value created by investments in projects and programs. Organisations should establish an enterprise-level function to ensure strategy execution and program success, and manage across silos commensurate with maturity, immediate need and culture desired by the organisation.

By 2016: Organisations must institute enterprise wide mechanisms to ensure similar fundamental approaches and use of practices and tools of project management delivery, whether it's communities of practice, enterprise.

Their survey in 2012 shows portfolio management makes a difference:

Research – Technology management

Portfolio adopters have a clear lead in share price performance

Average % of projects

Effective portfolio

management

Minimal portfolio

management

% increase

Met original goals

77% 65% 18%

Met ROI 62% 48% 29%

On time 68% 50% 36%

To budget 64% 54% 19%

International Data Corporation findings

Performance indicator Value

Redundant projects dropped 78%

Cost per project reduced 37%

Project failure rate dropped 59%

Payback time of initiative 8 months

Their findings show clear benefits which excellence in processes, programmes and projects alone cannot achieve.

2012

Different industries are in different places

© PPPM – Moorhouse Consulting / Deloitte Original Research 2012.

Typical portfolio management process maturity and process effectiveness of organisations in selected industries

Process maturity

Po

rtfo

lio

pro

cess

eff

ect

ive

ne

ss

Good practices • Strong effective sponsorship • Clear linkage between strategy,

project delivery and benefits realisation

• People, process and technology work in concert

• Frequent reviews of ideas and projects against priorities

• Holistic view of ideas, projects and assets/applications

• Continuous improvement cycle

Make sure you really understand projects

Don’t deal with it a s a “process” issue

Different methods can harness the extended project lifecycle . . .

Output Outcome Benefit

£

Recognition eventTM Value flashpointTM

£

Condition of satisfaction Project Workout

Isochron’s

Source: Isochron

Benefits mapping and project scope

Output

Output

Output

Output

Outcome

Outcome Benefit

“Delivery” management

Change management methods

Benefits management methods

Benefits and outcomes always matter

Output

Output

Output

Output

Outcome

Outcome Benefit

“Delivery” management

Change management methods

Benefits management methods

What levers can you use to make this work?

Culture

Process

Systems Structure The accountabilities and relationships

Brings consistency, when consistency

adds value

Makes processes more effective and efficient

How we behave (or misbehave!)


What levers can you use?

Make them “end to end”.

Make them role driven.

Mirror the accountabilities.

Reinforce the culture

Design them on the assumption the

organisation WILL change.

Who is accountable to whom

. . . . and for what?

Be clear on decision rights.

Have compatible goals.

Vertical and horizontal

Shared values (e.g. trust)

Team based methods

Pull rather than push

Team, not “individual”

Benefit and value, no just cost

Culture

Portfolio management in context

Don’t meet every problem by reorganising

A flat structure ? A few minor changes A Pyramid

“I was to learn later in life that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization.”

Quotation from Gaius Petronius Arbiter, AD66

Summing up

Successful project management is not enough for a successful business – be change and benefits focussed

How you implement project management at an organisational level matters

Unless you totally separate your resources and funding, you will have a matrix – admit it.

The leadership team to decide on the strength of the matrix

It is fundamental to accountability and corporate governance

Rethink your paradigm on what a project is all about – consider change (outcomes) and benefits as being within the scope.

. . . and perhaps you’ll solve some of the problems we started with . . . and start to make portfolio management work

Robert Buttrick

projectworkout.com

For more articles

“The benefits of are there to be taken, if we, as leaders, are brave enough”

http://www.projectworkout.com/

http://www.projectworkout.com/

Education

Success, maturity, matrices and portfolio presentation by Robert Buttrick