With money ever scarcer, I am shocked that more organisations do not actively manage their total volume of change projects and programmes.
After all, we all already manage at least one portfolio. We all prioritise how we allocate our personal resources to the many different possible life activities in which we could participate by evaluating those activities against what is important to us (e.g. wealth, family, etc.). So why don't directors at all organisations do this at work too?
At its simplest, this portfolio management should comprise:
1. A prioritised list of all change initiatives:
- Piggy-back the existing annual business planning process to collect consistent information about each change initiative. Use a consistent initiative data sheet.
- Get a snapshot of progress of initiatives that are already underway. Compare results so far against the initial project/programme promises. Are there any clear messages (e.g. an initiative will never get close to delivering on its promise).
- Ask the management board what criteria they want to use to show how change initiatives best contribute to the organisation's strategic objectives. These should consider three factors:
- Affordability
- Achievability (level of uncertainty or risk)
- Attractiveness (level of reward or return)
Actually, this is where the fun begins - have a go at facilitating management board workshops using techniques like pair-wise comparisons.
- Agree with the management board the ranking of the planned initiatives against the criteria.
2. An understanding of resource availability:
- Determine what resources are needed to complete each change initiative (do not forget calls upon those working in the part of the organisation you are seeking to change, seasonal peaks, etc.).
- Work out when initiatives should be timed to match with resource availability.
- Ask the management board to approve a high-level multi-year plan, and detailed tactical delivery plan for the portfolio of change initiatives.
3. Monitor:
- Keep up-to-date with strategic intent. Strategic objectives will change, and so will the relative significance of the initiatives on your prioritised list. Some may be dropped or deferred. Some may be promoted and initiated earlier.
- Roll up reports from individual initiatives that show if initiatives are fulfilling the investment criteria set by the management board*. If not, ask why. Schedule regular progress reviews against the delivery plan with the management board (busy people, so only look at the initiatives that are not progressing as planned). Consider recommendations to drop initiatives that cannot deliver on their promises.
As you implement these principles, you will recognise the usefulness of cross-portfolio standards such as common business case content (to be able to compare apples with apples rather than with pears), initiative complexity-assessment and related governance-tailoring models, etc.
Click here to see research cited by The Chartered Institute of Management Accountants (CIMA) that recognises this need to better align scare resources with strategic intent. The CIMA report explores what activities and practices were involved in the portfolio management approach of the organisations reviewed, how these practices were influenced by the current economic conditions, and the benefits the organisations were deriving from its use.
* In my experience, this is the time-consuming step. It is often hard to get initiative managers to understand the need for them to send a report to someone else outside of their local governance structure; they see you as another person to whom to provide information and another distraction from delivery. One way to successfully obtain this information is to offer a carrot. Determine all the stakeholders who require information from projects and programmes, and then talk to them about what single report template and timetable could be constructed to satisfy all their needs, and agree this with stakeholders and initiative managers. This almost always results in a reduction in the volume of reporting that project and programme managers have to complete. Also, ensure that you are not trying to duplicate the job of the local initiative's governance - leave a project or programme board to control their initiative within specific, quantified parameters, and ask for reports on progress against those targets. Only get the management board involved in assisting (not condemning!) local initiative governance bodies that report they are having difficulty in meeting their targets.