PPM and Agile transformations are two birds of a feather…

At first glance you might think that there couldn’t be two organization transformations with greater difference than the adoption of project portfolio management (PPM) and the transition to agile delivery. After all, when problems occur, the former is often perceived as bureaucracy gone mad whereas the latter is negatively stereotyped as just do it chaos.

Both transformations have a lot more in common than you might think.

Both will fail if fundamental mindset and behavior changes don’t occur. Neither can succeed with just introduction of new practices or tools. The best portfolio prioritization scoring model or the most integrated sprint planning and reporting tool suite will merely provide evidence of dysfunction if behaviors don’t change. The shift for PPM requires staff at all levels to elevate organization strategy over personal pet projects and to recognize that optimizing the whole sometimes requires sub-optimizing a part. Agile requires a similar shift in thinking from centralized decision-making to embracing empowerment and self-organization. But once the right mindset has been cultivated, a parallel introduction of new procedures with appropriate supporting tools can increase the effectiveness of the change.

Both transformations require vigilance and ongoing coaching to ensure that backsliding does not occur. Without this, cargo cult behavior will be seen from both portfolio governance participants and agile teams. Re-emergence of stealth and zombie projects or multi-level decision-making and chronic over commitment and under delivery sprint-after-sprint are clear signs that discipline is lacking.

Top down and bottom up commitment is critical to both. Without the former, it is not possible to overcome political and financial obstacles and skipping the latter will usually be reflected through the reporting coming out of implemented tools as garbage in, garbage out.

You will be forced to evaluate organizational policies and structure beyond the obvious points of impacts. New roles such as portfolio managers, agile coaches and leads will emerge, and performance objectives and incentives will need to shift from individual achievement to portfolio or team achievement.

Finally, both transformations are journeys, not just destinations. No matter how efficient a company’s delivery practices or portfolio management practices get, there’s always room for improvement and instilling a culture of continuous improvement is superior to focusing on a few major changes.

 

Unintended consequences…

An organization decides to introduce a progressive governance oversight approach for projects using estimated budget as the main criterion for determining how much scrutiny funding requests will receive. While there will be grudging acceptance of the change, without other checks and balances in place, sponsors will become adept at splitting up their larger initiatives so that they fall just below the oversight thresholds. Governance over costly initiatives improves, but almost no large projects get launched.

Let’s assume that time tracking is introduced for the first time within a workgroup. Given the significant change in behavior that will introduce, the organization decides to start publishing the names of those staff who have neglected to submit their timesheets on time. While this achieves the objective of increasing timely timesheet submission, it soon becomes clear that staff are just entering a full week’s allocation against the main projects to which they have been assigned instead of entering true actuals. Compliance has improved, but data quality has decreased.

The leadership team is tired of getting project updates through traditional steering committee or portfolio review meetings, and demands that a centralized reporting system be implemented. They now have the ability to get project updates in near real time, but project managers don’t update the system in a timely, quality fashion so decisions are made on faulty data. Efficiency has improved at the cost of effectiveness.

What do all of these scenarios have in common? Good management intent focused on a primary measure, but the outcome leaves a lot to be desired.

How could this have been avoided?

First, secondary measures should have been identified. These act as the conscience of the change ensuring that the side effects of improvements to the primary measure are considered and mitigated.

Second, involve all key stakeholders in the design and implementation of the change. It never ceases to amaze me that the same professionals who wouldn’t dream of managing a project without proper stakeholder engagement will design and rollout project management practice changes with minimal external participation. Will all stakeholders be on board with the proposed changes? Of course not, but at least they can provide their input into reducing the likelihood of significant negative impact to one or more secondary measures.

Finally, the primary and key secondary measures should be measured before and then regularly monitored after the change to ensure that consequences of the change can be quickly identified and addressed.

We learn early in school that for every action, there is an equal and opposite reaction. Unfortunately, this is often the case when changes to project management practices are introduced, but with effective stakeholder engagment and monitoring of secondary measures, you might be able to overcome Newton’s third law.

What’s your sponsor’s benefits reliability rating?

Many of the companies I’ve worked with have invested significant effort in developing and implementing consistent project intake processes, often supported by fairly costly project portfolio management systems.

While these changes can reduce the occurrence of pet projects, they still won’t make a meaningful difference in portfolio value realization. Yes, increased effort may be spent in creating business cases than before and those business cases may get challenged by different levels of governance committees, but that doesn’t mean benefits will be realized as expected. Unless the requested funding is tremendous, the level of scrutiny the business case will experience is likely to be restricted to a quick review of assumptions, validation of SWOT analysis and other such sanity checks. To really validate the realism of the benefits model would require an investment of a similar (if not greater) level of effort which was spent on creating the original business case.

Most sponsors tend to display a strong optimism bias – if they didn’t, they’d be unlikely to sponsor transformational projects. However, this optimism bias can result in inflated expected benefits and the underestimation of the one-time or ongoing costs or the impact of external factors which could reduce benefits.

Without some sort of benefits management framework that insists on objective representation of expected benefits when baselines are committed and then regularly re-checks the likelihood of realizing those benefits, risky project investment decisions could still be made. And once a project is over, even if no benefits were realized, few organizations will hold the sponsor accountable for poor outcomes. While chronic offenders likely deserve some punitive action, I’m not a fan of tying compensation to benefits realization – while that creates “skin in the game”, it also might generate an overly conservative culture which could result in competitive disadvantage for a company.

This made me think about credit ratings – independently established metrics providing an objective method of evaluating the credit risk of an individual, organization or country. Could this approach not be adapted for assessing the benefits realization reliability of a given sponsor?

Similar to a credit rating, new sponsors would start out with a modest reliability rating. As they request project investment decisions and the benefits are realized (or not), their rating would increase or decrease. These ratings could then be used as an input into project intake reviews. Sponsors with good reliability ratings would be subjected to less scrutiny and have access to higher levels of project funding. Those with lower reliability ratings would have their business cases challenged more rigorously and could have more funding disbursement gates.

So who would calculate and publish such reliability ratings? This could be a job for your friendly, neighborhood PMO.