Bring portfolio management, at least partially, under the umbrella of the program manager.
Figure 11-5: The portfolio review cycle in an agile versus classic portfolio.
Agile Strategy Integrate portfolio management into the routine project management process, via the operational infrastructure as much as possible, to avoid the “once annually” portfolio review.
A good project management infrastructure (see Chapter 10) provides a common framework for efficiently processing day-to-day project data, thus freeing up the valuable time of the project manager to keep a vigilant view on the project and the environment external to the project. The portfolio that surrounds a project is, in fact, one of those critical, external elements that must be watched by the project manager. By integrating portfolio management criteria into the project management infrastructure, you let the infrastructure’s systems and the program analyst process the routine data. In this way, the portfolio is constantly and efficiently monitored for changes in strategy, weighting criteria, or the projects themselves that may trigger the need for a reprioritization/rebalancing of the portfolio. Therefore, the project or program manager only needs to get actively involved when certain triggers are hit. For example, let’s say adealis closed that requires a new customer project to be initiated immediately. There are no resources available, so they must be pulled from an active project, effectively putting it on hold. This on-hold project, in turn, is a dependency for another internal project. The triggering event for this second project is the delay in the first project (its dependency) and would be flagged by the program analyst. At this point, the program manager would get involved to determine if it still made sense to push forward with the second project, or if the portfolio should be rebalanced until the first project is restaffed.
Agile Strategy Make portfolio management part of the program manager’s responsibilities. Since the program manager works in the middle between the high-level strategy and tactical projects, she is best able to manage the two-way interactions and impacts between them.
By bringing portfolio management under the wing of the program manager, you accomplish two things. First, you significantly reduce the end-to-end cycle time of reacting to a change. Second, you reinforce the concepts that the projects are the business and that program managers need to be aware of the business environment external to the actual projects. These concepts involve a major role change for most program managers (and functional managers) and should be approached with caution. In Chapter 5, when we discussed having the project manager take an outward orientation, it was primarily to monitor external factors so that he can make appropriate adjustments within his project. Now I am suggesting that program managers (who are generally more senior than project managers) be given responsibility for overseeing the company’s project portfolio, which is really an overlap of functional and executive management’s traditional roles (see Figure 11-6).
Figure 11-6: Portfolio management responsibility in an agile versus classic portfolio.
This shifting of responsibilities is necessary in order to increase overall organizational efficiency, and there are a few practical ways to implement it. The most direct implementation is to give the program manager responsibility for identifying triggers anywhere within the corporate/business environment that cause the portfolio to be revisited and for making recommendations to rebalance/reprioritize the project portfolio. Executive/functional management would still make the decision on whether (and how) to act on the recommendations. This scenario develops the program manager. It pulls her deeper into the business decision-making process and, simultaneously, frees up executive management from focusing on the tactical portfolio management process, so executives can instead spend more energy on matters such as understanding the customer’s needs, the competition, resources, and the macro business environment.
Agile Strategy Ease into agile portfolio management by delegating responsibility to program management for identifying triggers, performing analysis, and making recommendations, while maintaining ultimate decision making at the executive level.
Another possibility is to give ongoing tactical portfolio management responsibility to the functional/executive manager who is closest to the core program objectives and/or who owns the majority of resources involved. This shift is taking place more and more frequently because these managers already have a good understanding of the business thresholds, especially resource-related ones, that trigger portfolio rebalancing. By providing them with real-time information via the project management infrastructure (which is now integrated with portfolio management), they will be able to effectively monitor and adjust the portfolio on a fairly continuous basis to meet business objectives.
These are just a few ideas for getting started with integrating project management and portfolio management. Every organization is somewhat unique, and the actual implementation must be tailored to that business. However, the bottom-line message is that integrating portfolio management with project management is an efficient way to ensure that your valuable resources are working on the right projects.
Agile Strategy Another approach to implementing portfolio management is to delegate this responsibility to the functional manager closest to the overall project set. This not only gets functional management more deeply involved at the strategy and project levels, but also paves the way for establishing a project-based organization.
Creating Your Portfolio View
When getting started with portfolio management, or when performing a comprehensive review of a current process, it makes sense to start at or near the top. However, this isn’t always necessary, especially if you’re just getting started with formal portfolio management. In this case, it may make sense to start from both ends, and see if and where they meet. The general hierarchy for mapping a project portfolio is strategy, then business objectives, then programs, and finally projects (see Figure 11-7). In the final portfolio, you should have a clear understanding of how every project you’re working on supports one or more strategies. For this reason, the result of this mapping process is referred to as the Portfolio View.
Figure 11-7: Portfolio mapping hierarchy.
One approach is to list your business strategies across the top of a whiteboard. Then lay out the high-level business objectives under each strategy. Under each business objective, list programs and then projects. This sounds pretty easy, but it may become confusing. You may discover that things don’t line up into neat columns. Some projects map to multiple programs; some programs map to multiple objectives; and some things don’t map to anything. Very soon, you may have a complex and tangled web that will make your head spin.
Because the agile portfolio is influenced just as much from the bottom levels of the organization (where projects reside) as the top, you may find that the classic top-down methods of portfolio construction do not always work smoothly. You may find, for instance, that lower-level projects are significantly disjointed. There may be numerous, loosely linked efforts proceeding simultaneously without a strong objective tying them together. In this case, you would need to start at the bottom and first organize your projects, then your programs. You will probably identify some overlap as well as gaps that need to be addressed. At the same time, you may start to go down your list of business strategies and see if they meet the bottom-up projects and programs. Most likely, you won’t have a clean linkup. You will have to work to get everything into alignment by nudging the project portfolio, the business strategy, or both.
The agile environment is one of discovery and breaking new ground. Its inherent nature encourages grass-roots efforts to address challenges. As project, program, portfolio, and executive managers, we need to recognize that not all projects will be driven from the top down. In fact, significant projects will initiate themselves among the core rank and file. Some of these grass-roots efforts may actually create a profound influence on top-level business strategies. In this situation, it is imperative that you initially construct your project portfolio with a strong bottom-up perspective (see Figure 11-8).
Figure 11-8: Portfolio construction in an agile versus classic environment.
There are many ways to help organize your current portfolio, and all of them involve a little brute force and cranking through details. The exercise itself will involve many parts of the organization, and it can be very beneficial, if conducted correctly and tactfully. Organizing your portfolio “correctly” means that all linkages and dependencies are captured and understood. It is especially important to recognize the lower-level, interproject dependencies that are often overlooked but, if not understood, can end up wreaking havoc on a higher-level program or objective. Working “tactfully” means that portfolio management is an emotional and political exercise. You need to take an objective perspective when creating your overall portfolio mapping. If you are too subjective or let personal preferences, pet projects, or a silo mentality enter into the mix, then you may find that every project supports every strategy and that all are equally important. This may be true, but probably isn’t, which means that you won’t get the added value that you need from portfolio management.
In-depth discussions to prioritize projects are required to get and keep the portfolio aligned. These efforts may be painful and unpopular, but they are essential to maintain business agility.