There are probably numerous ways to extend the product development process to encompass portfolio management, but one critical goal that we are trying to achieve is ongoing portfolio management versus the annual portfolio review approach. Generally, this means monitoring and analyzing the situation and events on a regular basis.
One relatively easy way to start toward an integrated solution is to look for ways to tie portfolio management decisions to major project reviews. Most product development processes in the technology space are based on the stage-gate concept, which requires formal reviews at predesignated milestone points before the project team can continue to the next stage (see Figure 12-3). This is a logical point to extend the normal stage-gate criteria to include a review of how the project fits into the portfolio, how recent project decisions may affect other parts of the portfolio, and how other portfolio decisions may affect this project. In theory, this is not quite as continuous a process as you may want, since portfolio reviews only come at stage-gates and then only for the projects in question. However, depending on the number of projects running simultaneously in your portfolio, progressions to stage-gates may happen as often as monthly, which is certainly much better than only addressing the portfolio once a year.
Figure 12-3: Portfolio reviews tied to stage-gates.
Agile Strategy Tie portfolio reviews to stage-gates as a first step toward integrating portfolio management into the product development process.
Stage-gate review meetings should be scheduled at regular periodic intervals (i.e., on the first Thursday of each month), so key managers can get them on their calendars; however, only projects that are at a stage-gate need to be discussed. In fact, at any particular stage-gate review meeting, only one or a few projects may be specifically reviewed, though you can focus part of that review on how the specific project affects and is affected by the rest of the business project portfolio. Even when a minority of the total projects is reviewed, the discussion on interactions with the rest of the portfolio may extend to the majority, if not all, of the portfolio projects.
The first few times that you use this integrated process, you may find that most of the discussion is off-the-cuff or consists of brainstorming. Once project teams realize how interdependent they are and how much they can learn from each other, you can better facilitate a learning process. Project teams will become better able to communicate specific dependencies on other projects or areas of interest to the other project teams in the portfolio, as well as to the stage-gate review committee. By reviewing any particular project’s status against a “master dependency” list from the larger project portfolio, project managers can quickly identify issues and synergies that may not otherwise have been specifically identified or discussed.
The idea here is for the project team and stage-gate committee to identify issues (based on the master dependency list), follow them up with a discussion to qualify the discovery, and then scheduling time offline from the stage-gate meeting for further investigation with the appropriate parties. This process tends to help individual projects come together as a single portfolio with common objectives. The result not only adds value to the project, it is partially a criterion for progressing to the next phase.
For example, let’s say that the project under review is one of five projects that together comprise a program to develop an ultra-light notebook computer. The team responsible for the video display subsystem comes to the stage-gate review meeting having met all of its objectives for the previous stage. Additionally, it has created a project plan (i.e., a Project Data Sheet) for the next stage and is ready to begin executing on it upon receiving approval from the stage-gate committee, which it fully expects to receive. The video display design is right on target for all specifications except one, steady-state power, which is on the high end of the tolerance but still within spec. The video team considers this a low priority since it is still within spec. This issue, however, comes up at the stage-gate review meeting during a review of the “potential impacts to other portfolio projects”. The technical leader from the power-supply team realizes that this could be a critical issue because his team has been considering lowering the steady-state power specification to a point that would put the video display out of spec. A discussion ensues and it is determined that the video team, while meeting its own objectives, should not continue further development until the steady-state power question is resolved.
This example demonstrates how being cognizant of the potential impacts your project may have on other projects in the portfolio, and actively communicating those impacts to others, can help optimize the overall portfolio. This situation may have had a different outcome had the power-supply team identified steady-state power as a potential problem on the master dependency list, with a comment such as “Review all steady-state power requirements with power-supply team before finalizing designs”. In this way, the issue could be identified prior to the stage-gate review meeting. Subsequently, it may have been resolved before the meeting as well.
Agile Strategy Develop and maintain a “master dependency” list for the portfolio, then have project teams address how their projects affect and are affected by this list at each stage-gate.
Integrating Project Management Into the Product Development Process
It is in the tactical planning and management of individual projects where any new ideas or issues that were identified at the stage-gate/ portfolio review are acted on. To this end, coming out of the stagegate is generally a good point at which to make detailed modifications to your project plan (see Figure 12-4).
Figure 12-4: Phase-to-phase detailed project planning.
To effectively get the outputs from a stage-gate/portfolio review input into the detailed planning for the next project stage, you must clearly articulate how the project management process will be integrated with the product development process. If you don’t, valuable information can slip through the cracks and won’t be addressed. One method I have found effective is to use the Project Data Sheet (PDS) format to create a new subproject for each new stage. This means that you will have one Project Data Sheet and high-level plan for the whole project, plus a sub-PDS and detailed plan for each stage. The executive summary format of the PDS makes it ideally suited for presentation and discussion with the stage-gate committee, as well as providing an organized framework for making modifications based on the aforementioned discussion.
Agile Strategy Use Project Data Sheets to define each project stage as a subproject, to ensure that outputs from a stage-gate/portfolio review are integrated into the detailed planning for the next stage.
The extension of the stage-gate product development process described in this chapter will help you better manage your projects and portfolio on an ongoing basis, while maintaining a focus on the critical technical and innovative engines of your company. In today’s competitive and uncertain business environment, innovation alone will not win the day. Product development needs to reach outside of R&D, create a linkage, and become immersed in the business environment. Gifted managers (product and project managers) often create this necessary linkage, but they will eventually be stretched too thin. Extending your product development process by integrating portfolio management and project management is one way to support these leaders, as well as broaden the bridge so that other project managers and team leads can help maintain this critical connection.
Summary
Extending your product development process by integrating portfolio and project management is a light and effective way to introduce these concepts to the highly technical-driven organization.
Many organizations maintain this integration by relying on project and product managers with the right combination of technical, business, and interpersonal skills, but employing this approach alone is not easily scalable.
Stage-gate review meetings are a good place to integrate portfolio reviews into the product development process.
Planning each project stage as a distinct subproject ensures that outputs from the stage-gate/portfolio review get integrated into the detailed plans for the next stage.
Conclusion
The most innovative companies of today and tomorrow will continue to push the project management envelope. For them, being able to effectively define, plan, and execute projects in a dynamic and fastpaced environment will be the difference between merely surviving and flourishing. The individuals leading these groundbreaking efforts know that their projects are challenging the status quo and that the classic PM thinking “just doesn’t feel right”. Project management is no longer just an academic exercise; it is needs to be a tactical tool that will help organizations reach their goals. Only those approaches that resonate with the team and organization will be given serious consideration, with techniques that create synergy between process and creative freedom being paramount. Agile PM swings the pendulum back to the creative side, while remaining in the background to facilitate project and organizational success.
While the theory of project management discusses the full project lifecycle, the practical application has largely focused on the planning stage. This focus is reflected and propagated by the predominant project management tools on the market, which are principally designed to automate planning activities such as timeline creation and resource allocation. However, in agile project environments, successful project management requires a shift of focus to the execution stage, because the inherent uncertainty of the environment places limits on how far into the future you can effectively plan your project. Agility is about making the right decisions during project execution (as well as planning); agile PM is about creating the environment and tools to support those decisions.