Success, maturity, matrices and portfolio presentation by Robert Buttrick
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Transcript of Success, maturity, matrices and portfolio presentation by Robert Buttrick
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
Excellence is not enough . . .
Successful project management
Successful project
Successful business
So what makes the difference?
Successful project management
Cost
Time Scope
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
Successful project
Cost
Time Scope
Area of benefit viability
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
Successful project
Cost
Time Scope
Area of benefit viability
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
Successful project
Cost
Time Scope
Area of benefit viability
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
Successful project
Cost
Time Scope
Area of benefit viability
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
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
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
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
Portfolio excellence
Project excellence
Functional 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
Portfolio excellence
Project excellence
Collaboration excellence
Functional excellence
Can be led from the “middle” Must be led from the “top”
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
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
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
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
Business Portfolio: Sub-portfolios, programmes, projects, processes
Customer and value driven and cost
constrained.
Business Portfolio: Sub-portfolios, programmes, projects, processes
Business Portfolio: Sub-portfolios, programmes, projects, processes
Services
Products
Customers
Inputs
Business portfolios are the 2nd dimension of the matrix
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
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!)
Source: The Project Workout, Robert Buttrick, FT Prentice Hall, 2009
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
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”