Having attempted rolling out project portfolio management at several organizations I can state with confidence that the portfolio management process fails to deliver on its promise to streamline an organization’s project pipeline and provide high value. However, it is not the fault of the portfolio management process. Rather, I have found that the fault resides primarily with how organizations are structured (refer to a prior blog post titled Portfolio Management: Is Modern Management Practice Compatible?). Another major issue is a lack of education and understanding of portfolio, program, and project management at the upper management level (think C-suite).
It’s easy for a project manager to take for granted that everyone in upper management has a grasp on the concepts of project, program, and portfolio management. This is not the case at all. In fact, I’m continually amazed at the number of project managers I encounter that do not understand the difference. For purposes of all reading, portfolios deliver organizational strategy, programs deliver benefits, and projects deliver products, services, or results. Programs are NOT just large projects and portfolios are NOT simply a collection of work being performed in an organization. So, what is inhibiting the adoption of true portfolio management?
Some of the more common inhibitors of portfolio management I’ve encountered are:
- Inter-departmental politics and funding battles. Departmental leadership is unwilling to let go of departmental funding for a greater organizational benefit. To be fair, they are incented by departmental benefit.
- Lack of organizational understanding of project capacity. Organizations attempt, and actually believe they can, fit five gallons of work into a 12-ounce capacity bottle and grossly overestimate their ability to take on new work.
- Continuously decreasing time-to-market demands. This includes reaction time. Recall that MySpace was out prior to Facebook. How many of you still use MySpace?
- Unwillingness to kill a project. If it were ever understood, it seems to have long been forgotten that sunk costs should not be considered when deciding whether to continue a troubled project (if you hold the PMP certification you should understand this). The rationalization goes something like this: “We’ve already spent $1M on this project; if we quit now all that money spent will be for nothing.”
- No clear organizational strategy. In today’s economic climate, how can this be? I contend that operating with no direction in today’s climate will certainly lead to certain organizational death, or the organizational equivalent of a severe intestinal virus at the least.
- Disruptive technology. Social networking is a disruptive technology that many organizations resisted. They are now behind as a result.
- Exceedingly high attrition rates. Portfolio management cannot get out of the starting blocks because those individuals responsible for driving its adoption and implementation are leaving organizations at an alarming rate, voluntarily and involuntarily.
Even given all of the above, I feel the larger issue is that organizations are simply not structured properly for portfolio management; or, for that matter, business in general today. As the title of this blog implies, it is analogous of fitting a Lamborghini body to a Plymouth Horizon (sorry Horizon fans) chassis and expecting the resultant vehicle to perform like a Lamborghini.
The fix is anything but easy. Thinking “out of the box” is not enough. It will require action to actually “get out of the box”. Thought has no value if it is not acted upon. I have long been a proponent of flattened organizational hierarchy (No positional hierarchy really), dispersed power structures, and the empowering of individuals by offering them the freedom to actually choose the way they work and where they work.
A recent article on CNN titled Freedom Key to Workplace of the Future describes a workplace that would actually be a friendly environment for portfolio management; one that flattens hierarchy and has employees engaged and eager to contribute to a shared goal. Until this future becomes more of a reality, I fear the promise and value of portfolio management will remain less of a reality.