Organizational Agility

Project Management

The fast pace of change, combined with the increasing complexity of the global economy, and the challenge of cross border competition, means that companies must re-examine and adjust their strategies on a continual basis. Really successful companies have the ability to predict trends and re-design themselves, their product and service offerings, their operational effectiveness, and their customer service performance, all at extremely high speed. But, defining strategy alone does not ensure success or meet market demands. Organizational agility is the way we translate strategy into business success, using a proven project-based approach.

With increasing competition within all industries and professions, organizations worldwide are embracing project management as a way of successfully completing projects, meeting business objectives and achieving organizational goals. Organizations such as IBM, AT&T, Pfizer, NASA, and Softbank all use project management to continually redesign themselves.

And I would like to stress the point that project management is not just about IT anymore. Any organizational change is best managed as a project, with the proven processes, tools, and discipline that project management brings.
Typically, the responsibility for determining goals and objectives and the strategies for achieving them is left up to the “C suite” of executives – CEO, COO, CFO, CIO, etc. The task of execution is then often handed to operational managers, who usually have a full workload and a cross-functional team with a similarly full workload and multiple reporting lines. These temporary endeavors to change and build up organizational capability are of course, programs and projects, but they are very often assigned to people without program or project management experience or training, with no tools and no defined process. This seems very risky to me. If any of your organization’s past strategy implementations has failed to achieve objectives, there is a proven framework for identifying the causes and improving your processes for future change projects.

PMMM (Project Management Maturity Model)

What is the project management maturity model? Basically it is a framework for assessing the portfolio, program and project management maturity level of an organization, and then proposing concrete, actionable steps for improving how we plan and execute projects. Below is a simplified view of the model:

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Figure 1: Project Management Maturity Model (Simplified)

In next month’s article we will include a few simple steps that can be used to raise the level of program and project management maturity of your organization.
The next few items are three of the critical success factors to building organizational agility through program and project management maturity.

Portfolio Management

Company resources are usually scarce, and are usually the limiting factor in project selection. If we take on too many projects, we overload our resources, if we do not take on enough, we do not utilize them economically enough. So portfolio management is partly about resource utilization. But it is also about making wise investments, so that projects that become approved and funded can reasonably be expected to help achieve some business objective. Some selection methods are highly intuitive while others try to add rigor through more scientific selection processes. And true portfolio management is an ongoing process – as conditions change, programs or projects may best be stopped or even killed when their objectives become irrelevant or to make way for higher priorities.
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Figure 2: Portfolio Management; Selection

 

Program/Project Governance

Definition: The role of program/project governance is to provide a decision-making framework that is logical, robust and repeatable, to govern an organization’s capital investments (programs and projects). In this way, an organization will have a structured approach to conducting both its business as usual (operational) activities and its temporary (program and project) activities.
Below we see a visualization of the program/project governance framework. This model stresses the direct linkage between organizational strategy, and operational outcomes. Similar to Portfolio Management, Program Governance is also an ongoing function. It provides a mechanism for continuous review of program/project content and direction and assessment against current circumstances and success criteria.

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Figure 3: Program/Project Governance Model

Effective Program governance is achieved through a structured approach and (four) key roles .ⅰ

Executive Sponsor: Direction and Oversight

A program needs one or more executive sponsors to ensure that it will make an appropriate and necessary contribution to the overall enterprise business strategy.

Steering Committee: Direction and Advice

Large initiatives typically impact more than one business segment, and multiple segments often own different (but dependent or integrated) outcomes and results within the context of the overall business strategy and direction. Such initiatives require a governance mechanism through which all segment representatives can reach agreement on a direction that will result in desired outcomes for everyone.

Program Manager: Management and Integration

Program managers direct project managers to achieve defined outcomes aligned with business strategy, essentially acting as the implementation arm of the Executive Sponsor or Steering Committee. A program manager is responsible for the delivery of measurable benefit to the organization, and this is the primary metric that will be tracked during the program life-cycle.

Project Manager: Management and Control

The person assigned by the project performing organization to use time and resources to achieve project objectives.

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Figure 4: Project Governance Structure and Roles

 

PMO (Project Management Office)

Definition: An organizational body responsible for centralized and coordinated management of the programs and projects under its domain. Companies that have implemented PMOs have enjoyed many benefits:ⅱ

  • Reduction in failed projects
  • Projects delivered under budget
  • Improved productivity
  • Projects finished ahead of schedule
  • Increased final cost savings (project outcome)

A well-designed PMO can help achieve these benefits by providing certain baseline functions. ⅲ These are shown below in order of frequency:

  1. Program and project monitoring and controlling
  2. Program and project management methodology, standards implementation and management
  3. Program and project policies, procedures, templates implementation and management
  4. Program and project coaching and mentoring
  5. Program and project initiation
  6. Program and project planning
  7. Program and project closing
  8. Multi-project coordination
  9. Portfolio tracking (performance monitoring)
  10. Alignment of projects with strategic objectives

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Figure 5: PMO Organization (example)

The trend these days is for PMOs in high performing organizations to go beyond these basic functions and be more strategic and results oriented in their focus . ⅳ These high performing PMOs will:

  • Align themselves with business objectives and strategy execution
  • Engage in performance measurement
  • Practice resource forecasting and capacity management
  • Provide training in both basic and advanced project management skills as well as “soft skills” such as leadership, cultural awareness and communication.
  • Assess project management competence and provide a well-defined career path for project and program managers.

Conclusion

Talk – Action = 0. But effective action needs an organization, a well-defined process, good tools, and the right people.

ⅰ  Adapted from: www.ibm.com/developerworks/rational/library/apr05/hanford/

ⅱ  www.pmsolutions.com/The State of the PMO 2010

ⅲ  Adapted from “The State of the Project Management Office (PMO) 2014”

ⅳ  Adapted from “The State of the Project Management Office (PMO) 2014”

This post is also available in: Japanese