Change, communications and sponsorship

Since the Project Workout was first published, I have advocated projects as the vehicles for achieving strategic objectives or as I often say, projects are the vehicles of change. When I first wrote this in the late 90s, most people were still focused on deliverables and outputs, but, I am pleased to say the drive to towards benefits driven project management as standard is gaining momentum. This blog picks up on Steve Delgrosso’s views.
PMI’s Pulse of the Profession reviews are really starting to focus on the outcomes from projects being the most critical thing from senior management a senior management viewpoint (hurray!). Steve DelGrosso, from PMI, gives his views on what the priorities need to be, if organisations are to keep pace with the escalating rate of change. In his view, these are:

  • Priority One – communications
  • Priority Two – sponsor engagement

This mirrors McKinsey’s Colin Price’s findings about the essential role of the project sponsor in his book, Beyond Performance Management. It also mirrors the view that to be effective, senior management must not only have a vision, but also be able to communicate it.
A look at PMI’s research shows that organizations report that only 52 percent of their strategic initiatives are successful. The failure of strategic initiatives has a significantly greater financial impact than just project failure: they say that nearly 15 percent of every dollar spent on strategic initiatives is wasted–US$149 million for every US$1 billion spent. By comparison, PMI’s 2014 Pulse of the Profession® study finds that US$109 million is wasted for every US$1 billion invested in projects.

So, not much seems to have changed since David Munt, founder of GenSight, did a similar study in 2002. His research suggested between 35 and 50 per cent of all investment is directed to unsuccessful projects and that about 30 per cent of project investment by FTSE 100 organisations in 2000 actually destroyed shareholder value!
Strategic initiatives are the programmes and projects though which an organization’s strategy is implemented. By their nature, strategic initiatives drive change to transform an organization from current state to future state.
Failed projects can result in huge financial losses for an organization, but a failed strategic initiative has an impact far beyond just the costs of the initiative. When an organization embarks on change, it’s likely that systems, processes, vendors and perhaps even the overall organizational mindset (or mission) will be impacted. Failure to successfully enable sustainable change can lead to an organization losing its competitive advantage.

Select the right projects to support your strategy Selecting the right projects will help you achieve your objectives by realising benefits which support your strategy.

Select the right projects to support your strategy

I have a feeling there will be a lot more blogs on this topic as it challenges the prevalent “iron triangle” or “triple constraint” view of project management, and builds on it. Developers of standard and proprietary methods take note! In the meantime, have a look at The Project Workout, Chapter 3, page 50 and Chapter 15, page 198, in particular.

Project management excellence is not enough

Beware of doing too many projects, even if they do fit your strategy and have a good business case.

Beware of doing too many projects, even if they do fit your strategy and have a good business case.

The opening plenary sessions of the 2013 Gartner PPM and IT Summit in London, set the tone for a mind-set shift in how Gartner looks at “IT management”.  To date they have focussed in on “IT” and the “CIO”, and, in my view, perpetuating the gap between what they term “IT” and the “Business” . This year, to my delight, they were starting to talk about “the business” and IT’s part in it. It’s a brave thing to do, but the right thing to do. Most organisations still have their IT split off as separate organisational units ,with a separate strategy and loads of money, which tries to work out what “the business” wants and then all too often fails to meet those expectations. What is guaranteed though, is if you give an IT department money, they will spend it all, even if the business need is unclear. . . . that’s the “business’” fault!

Mike Langley from PMI was a key note speaker and gave his view on the all important question of “how do we ensure our (IT) projects fit our strategy?”  Notice I put “IT” in brackets – the department is irrelevant as we want all our projects to align with strategy . . . don’t we?

Mike based his talk on PMI’s recent “Pulse of the profession” survey.

We are all familiar with “strategy” and “execution” (sorry for using the “e” word, but when at an American conference, you can’t get away from it!).  The story is that the business leaders set the strategy and then the “business” implements it. If it goes wrong, it’s usually the fault of the business and their dreadful requirements and poor implementation!  What new research for Harvard Business Review is now talking about is that implementation is part of strategy and we should not separate them. (look out McKinsey and Bain!.) After all, if your strategy doesn’t include how to implement itself, then it’s a poor strategy.  The new buzz words for making this happen is “portfolio management”. This is a discipline of making sure that the programmes, projects and other activities that a business decides to do are the rights ones in terms of strategic direction, fit and balance in terms of risk and skills use. It’s all about selecting the right projects.

Mike says his research shows that organisations which are good at portfolio management are more agile, and have better project outcomes. Portfolio management is integral to how the top level leaders want to manage their business; it’s an integral part of business planning. Traditional business planning adds up costs of departmental budgets, checks against revenue and makes sure there is “interlock” if different departments need to work together.  Usually this is done a year or so in advance and is therefore totally pointless for organisations in fast moving environments. It is however a neat and simplistic way to blame people when things go wrong or costs to much. Hence, getting portfolio management working right is as much to do with mind-set as having the processes, systems and operating model.

Getting this right, means organisations can continuously tune their plans, not be tied to outdated annual budgets and use their people and money where the benefit is most attractive.  The money will follow the business need, not the department doing the work. Now that is what I call true organisational agility and if you have read the Project Workout, it will be very familiar to you.

This isn’t new as a concept, but it is something many organisations struggle with.  Have a look at this article: Excellence is not enough from the Project Workout “articles” web page.

Whose success is it?

In my “enemies within” blog, we looked at how management get the project performance they deserve. In that blog we explored the important role of the programme and project sponsor in making sure that an organisation’s programmes and projects succeed. But what does “success” mean? Success is too often interpreted through the differing eyes of stakeholders.

Successful project management ensures the delivery of a specified scope, on time and to budget (PMI’s triple constraint). It is related to how efficiently a project is managed. This should be assessed during the project closure review, documented in a project closure report and measured by timeliness of delivery milestones, adherence to budgets and quality. This is commonly associated with the role of the project manager.

A successful project realises the business benefits it was set up to achieve as stated in a business case. It is related to the effectiveness of the project in meeting the objectives set. The post implementation review (post-project review) assesses this. Measures of success here must be indicative of the business objectives being achieved. This review therefore has to happen some time after the output of the project has been put into use. It is associated with the role of the project sponsor.

A successful organisation drives towards its strategic objectives while fulfilling expectations of shareholders, managers, employees and other stakeholders. Measures for this are at a corporate level and should be financial and non-financial, such as a balanced score card. This is associated with the role of the chief executive.

A project which has been successfully ‘project managed’, however, may actually deliver little of value to the organisation. Further, a ‘successful project’ may not further the strategic objectives of the organisation, as its objectives may be out of alignment organisations seeking to optimise their total portfolio of projects through the effective combination of project management, sponsorship and portfolio management. A failing company can be full of ‘successful project management’ and ‘successful projects’ all driving in different directions.

The PMI’s recent report, Pulse of the Profession 2013, has actually picked up the above themes, so may this will help senior business leaders realise the potential that effective and efficient project management has to drive their organisations.

Gartner goes one step further and state that organisations which grasp this first will have a enhanced competitive advantage over the others.

Whatever you do must help you move towards your strategic objective. Otherwise there's no point.

Whatever you do must help you move towards your strategic objective. Otherwise there’s no point.

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