Everyone in the world of project management seems to be getting excited about portfolio and programme management. The Association for Project Management (APM) is putting the APM Body of knowledge through major heart surgery to align it with a portfolio, programme and project view of the world. Government departments have identified that the failure of projects is often down to the constraints imposed by the portfolio of projects planned for the year. It seems, that everyone has moved on from trying to deliver successful projects, to play with strategic issues like project prioritisation, corporate alignment and strategic implementation. These are very important topics, but are they areas in which project managers can make a significant contribution or are we drifting into areas more often associated with strategic and business planning; areas which have their own well developed and substantial body of knowledge. The danger is that this effort on portfolio and programme management will divert us from Mike Nichols vision of a world in a world where all projects succeed.
Link between strategy and portfolio management?
No one doubts that the strategic choices organisations take has major impacts on project and programme implementation. For example the strategic defence review at the MoD will have a significant impact on the priority and resources dedicated to specific programmes or a decision to invest in high speed rail, changes to strategy of Network Rail. Hence strategy and portfolio management are very close bed fellows. We can see portfolio as a powerful and structured framework to implement corporate strategy. The issue at point is the degree to which project and programme managers should be involved in exploring the strategic options for an organisation and influencing the strategic choices.
What is Strategic Planning?
The models for strategic and business planning, as taught in many business schools on MBA and business studies programmes, are well developed. They are often highly intuitive and set against a background of high ambiguity and uncertainty. In summary the aim is to match the internal capability of the organisation, with an understanding of the changing external environment and plan which is flexible enough to respond to emergent change. As a result they rely heavily on the experience, expert judgement and vision of the organisation’s leaders. Think about the following examples
- An electricity generator deciding which type of power station to build nuclear, coal, gas or wind.
- A technology company deciding if they should enter the mobile tablet market.
- A transport provider deciding which mode of transport to invest in, metro, heavy rail or bus.
- A water utility deciding which infrastructure investment should get priority.
The factors organisations consider when taking these decision are focused on understanding the market demand, understanding the actions of competitors (if any), understanding the organisations current capabilities, and an analysis of the general business outlook. Project feasibility is only one minor element of an organisations capability. The tools and techniques to use to support these strategic decisions are well understood and documented. But what is the role of project and programme managers in this strategic planning process?
The role of project managers in strategy development and strategic choice?
In this article we argue that strategic planning is primarily the responsibility of the leaders of an organisation (normally its board of Directors) and with input from the heads of function, Finance, HR, Marketing, Operations etc. Project and programme management has a role to play in these decisions, by providing advice of the practical feasibility of the planned changes. However this role certainly is no more significant than the evaluation of the market demand or the assessment of the ability of the organisation to raise the finance required to implement the planned changes. The strategic decisions and implementation must the owned by the organisations leaders.
So what might be the role for portfolio management or a portfolio manager?
1) Developing the strategic objectives for the portfolio.
2) Evaluating projects and programmes against the strategic objectives to ensure they support the organisations goals.
3) Evaluating the priority of project and programmes within the portfolio to ensure that those that meet the organisations objects receive sufficient resources.
4) Balancing the capacity of the organisation of the organisation to deliver projects and programmes with the resources available.
The problem is that these sound very like the roles of the CEO and a Board of Directors.
Will we see project managers joining the board rooms of major organisations?
The natural conclusion of this argument is that project and programme managers should have a much stronger voice in the board rooms of major organisations. It has long been a cry that engineers are under represented in the board room, maybe it is time for project and programme managers to get more involved in the strategic planning process. For this we do not need to re-write the project management body of knowledge, we just need to learn the language of corporate strategy, in its many forms. To my mind the project management body of knowledge (and APM) should continue to focus on Mike’s vision of vision of a world in a world where all projects succeed and leave portfolio management to the world of strategic analysis, choice and implementation.
Parallel Project Training offer project management training across the whole range of roles from an introductory to strategic level.