A portfolio of (bad) options
Whatever the reason, a project is how an organization translates an executive strategy.
The ability to scope and deliver a project is a competitive advantage.
The best organizations realize project management capability as a strategic differentiator, the lagging organizations only staff project management skills within Information Technology departments.
What is a project:
- a project has a definitive beginning and end;
- a project is a temporary effort, specifically to create a unique product, service, or result;
- a project is not part of business operations, but can develop capability and become part of operations
A note on this: Â do not confuse temporary with short duration and do not confuse temporary as something that does not, ultimately, become operational once the project is stabilized or delivered i.e. a new facility or new production technique or Google Chrome OS.
Business Portfolio
I have come to rely on using portfolio planning to describe the translation of strategy to project options an organization can undertake.
A portfolio view, projects are prioritized with the same risk and return criteria capital expenditures and other financial or strategic commitments are evaluated.
C-level business executives fully understand financial risk and when I link a portfolio of projects as organization risk then projects take their place as business drivers and begin to reveal that the capability to deliver projects is an organization risk.
Organizational planning impacts the projects by means of project prioritization based on risk, funding, and the organization’s strategic plan. Organizational planning can direct funding and support…on the basis of risk categories, specific lines of business, or general types of project*
The ability to scope, plan, and deliver a project on time, on budget, and up to expectation is the business differentiator today.
Yet, project management as a profession and as a business enabler has too little traction outside IT and within IT has little success — the two mutually reinforce misunderstanding and misguided notions of the competitive advantage project management is.
While I worked at Deloitte Consulting and Booz Allen Hamilton they both had a competitive objective to get as many consultants project management certified. This was their strategic go-to-market differentiators.
Deloitte and Booz Allen did not want every consultant to act as a project manager. Â When the client asks for project changes, while underway, a project management-savvy consultant can model the impact of change to budget, scope, resource, or quality against the project baseline.
Every change has effect.
Strategy Goal Portfolio
By using a project management portfolio view I can further quantify the impact of change to executive strategic goals.
My role then shifts to business partner, not for me to say, “no”, but for me to provide business case detail that my client can use to meet their sponsor’s expectation; every client has a sponsor, everyone has a sponsor.
Although I, as a consultant, have to deliver to the client, I also know the trying to please the client with every change they request will impact expected results.
The more detail I gave to the client, the more information they have to deliver projects on time, on budget, and within scope. Those new changes can become a second-phase option, abandoned, a new project, or added with a full understanding of impact.
The more the client delivers results, the more I become a trusted advisor and a business partner to that client and I, in turn, separate my value proposition from the self-interested contractor or a staff-augmentation house.
The end is reached when the project’s objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exits.*
The majority of projects end when “objectives will not or cannot be met” or the project saps the life and resources out of the organization and “the need for the project no longer exits”; also known as bankruptcy.
*Source: A Guide to the Project Management Book of Knowledge, Fourth Edition
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Comments 8
Cool..I did not understand the title but because of the good explanation i just get it :) nice article thanks for sharing it.
Well, the objective is that the blog title intrigues and the blog content reveals. However, I am not too sure of the degree I reliably delivered on that objective.
Thank you for the feedback.
I was in limbo when I came to your first paragraph, however, as I kept on reading, it became clear to me why you considered “business strategy” as a project portfolio. I like how you made comparison between the project sapping the life and resources of the organization to that of bankruptcy.
Author
Perhaps I need a bit of work on my blog introductions. I appreciate your willingness to continue reading and that I found a way to have the post lend insight into something you work with.
How might the post provide new lines of question or opportunity in your professional interaction and service?
Thank you for the post Terri.
Title has a catch and you did a splendid job on putting your thoughts onto this. The idea is of having your strategy as a portfolio is a plus, I’ve been using the outcome of the strategy as my portfolio, It never hit me to use my strategy as my portfolio. This is worth to try tho. Thanks toby
Author
Using a portfolio concept seems to link risk and resource with a bit more tangible sense. If the business of business is business then a portfolio of a basket of high, medium, and low risk projects builds a tolerable risk weight.
Strategy decomposes to a group of projects. The risk of those projects is the risk of the strategy rollout. Business strategy failures are project management failures and The frontier of competitive advantage may be 2 other blogs on this site I would welcome your perspective on.
Offsite (kind of like off world) there is a couple of bloggers who convey a lot of relevant strategy/reality topics you might enjoy. I recommend Shim Marom and his quantmleap blog or David Kasprzak and site My Flexible Pencil blog.
As a business owner, am a little bit wary of having my business strategy as a portfolio, but I can see that it can be beneficial to growing my business if done correctly. I will have to implement that as soon as possible. Thanks for the ideas!
Thank you for the comment. What causes concern in relation to your strategy as a portfolio? If your strategy represents potential options and every option requires resources – some larger than others and every resource commitment has a level of risk grouping that pool of resources and risk together is a portfolio.
Every hour of time invested in one endeavor is an hour of time lost to another endeavor. As a business owner this use of resource should provide a return on effort.
An hour invested is never recouped, so invest wisely.
Every dollar invested in one endeavor is a dollar lost to another endeavor. As a business owner this use of resource should also provide a return on investment.
A dollar invested is lost until a dollar is recouped in sales revenue, taken from a new source of investment, or pulled from reserves, so, again, invest wisely.
Just an alternative lens that may provide a different way to view capital – financial and human.