Gaining executive support for project portfolio management
Managing Partner, BUCERO PM Consulting
The difference from one organization to another, in terms of strategic execution, is the discipline of engaging the strategy with the tailored portfolio of projects and programs that will bring it to life. In a savings bank organization, with limited resources and not very mature in project management, it is as much about choosing what not to do as about deciding which strategic projects and programs to invest in. The organizational success or failure rests on how an organization governs its project portfolio.
This paper explains a real case of a Spanish savings bank who decided to implement a project portfolio process in their IT organization. The project management office (PMO) manager from the savings bank led the project, with the help of a project management consulting company. They worked on team with the savings bank professionals to sell the executives on the need of a project portfolio process, and the added value of this process implementation for their organization and for their customers. This paper deals with the problems and difficulties found and with the lessons learned from this challenging project.
As the organization had been growing up in terms of projects and people, knowing more and more about project status became a real issue from the management perspective. Then, the management team decided to implement an IT project office for relieving the project managers of low-value activities. After two years, the organization (BUCERO PM Consulting) was selected to help a savings bank organization located in the north of Spain to implement a project portfolio management system in their organization. The customer was called “Caixa Galicia,” located in northwest of Spain. They had a project management office (PMO) in place but only focused on control. The customer used the PMO to prepare progress status to the management of the bank, but they did not gather enough information about the projects they manage in their organization. I worked as a project portfolio management (PPM) consultant, and the first activity I did was a project portfolio assessment. Because of that assessment, I discovered that they were doing too many projects, which resulted in the following:
- No holistic view of project portfolio in the organization;
- Mix between senior project managers and outsourced people;
- Lack of discipline;
- Lack of sponsorship; and
- Focus on control.
Upper management had the feeling that they were investing too much in not added value projects. I mean they were investing effort, time, and money in projects that had very little added value. Something needed to be done in order to operate more efficiently as a banking organization. The urgency of implementing a project portfolio management system was clear enough.
Executives Beliefs and Expectations
Caixa Galicia executives did not have a high level of project management maturity. They believed that the PMO was helpful for project control, that it was tactical and focused on launching new products on time and being the first to market. I looked for the opportunity to talk face to face with the general manager from that organization, and after several tries, I achieved it. The general manager did not see the project management added value, he thought about project management as a tool.
He was not able to create the right environment for successful projects in his organization because he did not see that need. It was curious because that professional had been working for a consulting company in the past, before managing the IT department in the bank. However, his way of managing people in his organization created a lot of interruptions, so project managers and technical professionals were involved in firefighting most of their time. Projects priorities changes were so frequent. Therefore, middle managers followed the same behavior. The general manager was focused on control instead of results most of the time. He asked people to set up priorities but he changed them very frequently. I spent some time explaining to him the project portfolio management basics and how that approach would help his organization to be more efficient and better organized. The general manager asked me to educate middle managers and business managers on project portfolio management because they had a lack of knowledge. Then I prepared a training workshop for middle managers and executives where I explained the concepts regarding Exhibit 1.
Exhibit 1: Middle Management Training Structure
When I started the session, they asked me why they needed a portfolio management process. They said that they had been successful so far, so why should they change? I answered them that process would help them to decide in which projects to invest and it would help them to monitor them and making decisions about moving forward or cancelling projects. They also asked me about what would be the cost of implementing and running a project portfolio process and I asked them that it would be always less money and effort that not having one. Finally, we went into discussion regarding what would be the services and added value for that system. I can remember it as a very challenging meeting for me as a consultant. However, it was very helpful for everybody because the workshop helped them to identify the current situation and they bought the idea that they needed to change. I got very good feedback from the workshop: “It has been great to find somebody who spent time with us talking about strategy and portfolio management without any interruption.”
The Key to Getting Upper Management Support
The key to getting upper management support was to show how a project portfolio system would help them to solve current problems and provide business impact. They did not have a common list of projects and programs in the organization. They knew some projects were delayed but they did not know if they were investing in the right ones. They knew that they were investing a lot of money but they did not know the risk. I asked the general manager to be the project sponsor. The success or failure of any project often hinges on how well the project sponsor—the person who funds the project and ensures that desired benefits are achieved—relates to the project, the project manager, and other stakeholders. However, executives who are assigned as project sponsors often have little if any experience understanding their roles and responsibilities during the project life cycle. Problems in communication and execution are inevitable as long as senior managers and project managers do not understand the mechanics of their relationship. In addition, I ran a stakeholder analysis using the model (Exhibit 2).
Exhibit 2: Stakeholder Analysis Process
I asked the project team these questions:
- Who are the stakeholders?
- What are the stakeholder expectations?
- How does the project or product affect stakeholders?
- What information do stakeholders need?
Once I got their answers, I classified them and organized my project stakeholders in a matrix using the tool shown in Exhibit 3. The bubbles show the stakeholders, the size of each bubble represents the amount of project support. You can see in the diagram that around 45 percent of the stakeholders had high power and interest in this project.
Exhibit 3: Stakeholder Assessment Tool
I was lucky because the PMO leader was able to influence people and this person helped me to convince them about the importance of that project and the value for the organization. In any case, the level of resistance at the beginning of the project, because every stakeholder believed that were the key stakeholder, changed very soon because requirements prioritization was a big issue. I needed to be a “good preacher and bull fighter.” I needed to clarify roles and responsibilities for all the team members, and I needed to be flexible with the whole organization. Managing politics during the project portfolio project in the customer site was a challenge for me. Some managers only managed “win-lose” situations. All business units believed they had the same strategic weight at the organization.
I always say that politics are more difficult than physics because of physics can be formulated but politics is like playing a chess game. I coached the customer project manager how being political savvy in organizations and projects is a “must.” The bank procedures were so difficult to follow and the level of management pressure to launch new products to the market was so high. I worked with the PMO leader in a political plan based of the stakeholder analysis we did.
Selling Project Portfolio Management to Executives
To sell project portfolio management to executives, I had to spend time with managers, saying what I believed and acting on what I said. I delivered some talks and workshops by speaking the language management understands and asking questions like:
- Where do you expect to take your organization in two years' time?
- How do you know you will get there?
- What is your organization doing now (de facto strategy)?
I explained to them that a company's project portfolio drives its future value. Successful strategic execution requires tightly aligning the project portfolio to the corporate strategy. I explained to them the key was translating the strategy into the project portfolio. I proposed the customer a process to sell sponsorship into the organization. The set of steps to be followed are shown in Exhibit 4. Individuals fulfilling the sponsor role need to be sold on the features, advantages, and benefits that result from excellence in sponsorship.
Exhibit 4: Sponsorship selling model steps
Understand the need of having a sponsor assigned to your project. Understand the need: Focusing on the organizational need for a project sponsor is the first step in the process. Each level in the organization will have its own list of what their priority needs are. The best way to cover the executive needs is to understand what the key strategic priorities are for the organization. This could be obtained through periodical reports, discussions with senior executives, and meetings. Understand their strategic priorities, goals, and objectives, and see where your project is and how important it is for your organization.
We strongly recommend assessing your environment (project environment assessment tool). Then you must select a sponsor that will be most affected by the benefits and value produced by the project. Find a sponsor that is responsible for a critical business. If this same individual was also responsible for troubled projects from the past, it will even be easier to gain his or her support when you can relate back to those projects and explain how a strong relationship between the sponsor and the project manager can produce a big business impact. Share your findings with other managers in the organization, and speak always about the project and its business impact, not about you as project manager believer. Ask the management team for consensus about getting a sponsor assigned to your project.
Involve your assigned sponsor from the beginning, and talk about his or her expectations and your expectations. Remark how the project sponsor can help the project manager and his or her team to achieve a big business impact throughout that project. Brainstorm about what, how, and when the sponsor will be necessary and his or her interaction with the project manager.
Develop a communication plan. Communication with business leaders and those in need of project management is often forgotten. The organization must be informed about the value and capabilities of project management and the willingness of your group to help the business units meet its goals. The plan must include the target audience, frequency, and type of information presented (issues to be mitigated, escalation process, progress updates, capabilities, and benefits. Advertise, advertise, and communicate, you must sell sponsorship. Prepare a business case: A business case must be completed with all key business unit personnel. Producing the business case as a team will help to get buy-in from all departments involved and the upper managers. This business case will be your selling tool for gaining funding approval.
The business case must include these:
- Key business challenges, goals, and objectives you want to address;
- Proposed sponsorship strategy. Your approach, your expectations, project resources;
- Benefits and value project sponsorship will bring to the organization;
- Proposed cost; and
- Roll out plan.
The secret to selling an executive is to focus on the primary business needs and the value sponsorship can bring the organization. The primary business needs comes from the first step (understanding the need). The two key value items that executives want you to focus on are (1) how project management can reduce costs; and 92) how project management will increase revenues.
Talk to your sponsor frequently. Keep him or her informed about the project. Help him or her to understand that by working together, the sponsor will know much more about the project and about the customer, then he or she will be much more valuable for the organization. Use management meetings to reinforce and underline the support and help of your sponsor. Explain the value to the rest of managers.
The project portfolio—The array of investments in projects and programs this company chose to pursue was the agent of change. I provided them with small but tangible results as soon as possible. We did several actions:
Executive involvement in projects reviews: The PMO called for a meeting of some project managers and executives randomly. They sat down together in order to run a project review. That meeting was a great opportunity for the executives to know more details about the project, and to understand much better the project manager difficulties, and lack of skills in order to improve project management in the organization.
Project portfolio training for all the project stakeholders: In that training, I was helped by the PMO team to gather information about the projects in the IT bank portfolio. In that way, I was able to understand the level of knowledge executives had about the projects they sponsored in the organization.
Half day session training for business managers: In that session, I explained the concept of project sponsorship, its meaning, and implications to all business managers. I spoke the language management understands.
General manager coaching in project sponsorship: It took some time and effort, but the general manager appreciated the value added at the end of the project. He understood the role of sponsor very well and it was one of the reasons for project success.
From the very beginning in the project, we obtained small results and those were showed to management. It was one of the key elements to be successful. The PMO was a key role in the project managing project stakeholders. The PMO leader knew all the main stakeholders and it helped me very much when I proposed to them some actions to be taken. The behavioral change from the sponsor step by step during the project life cycle was very helpful to influence positively to all project stakeholders.
The Project Portfolio Management Training
The training was focused on the these key subjects:
- All projects need an sponsor;
- Project sponsor role and key responsibilities;
- Understanding organizational culture (Strategic alignment and business impact);
- Commitment and ownership; and
- Setting and maintaining the agreed upon priorities.
We reviewed all the type of projects and we demonstrated that every project would need a sponsor to be successful. We defined the role and responsibilities for the project sponsor in Caixa Galicia. They used a project management methodology, but the sponsor role was not implemented. We made a cultural assessment in order to find out the strategic alignment and the business impact.
We explained the importance of commitment and ownership from the executive point of view, and we remarked the importance of setting up and maintaining project priorities.
We explained some criteria to select the right project portfolio sponsor, as you can see in Exhibit 5.
Exhibit 5: Sponsor attributes checklist
After the training, the executives understood sponsorship implementation may have a big business impact. Effective sponsorship can contribute to increased business success. Sponsors implemented the plan agreed upon with the general manager. Finally, the PMO did the follow up with the general manager. Caixa Galicia was a functional organization with a very autocratic management style. It was not easy to change those behaviors systematically. I had to use my passion, persistence, and patience during the whole project life cycle. Although I had a lot of enthusiasm acting as a consultant, the project was managed by the PMO leader who had worked more than 25 years for Caixa Galicia and knew very well the procedures, the politics, and, more important, the people at all hierarchical levels in the organization. He really acted as a change agent in this challenging project.
How to Sustain the Project Portfolio Discipline
A major problem with project sponsors is to keep them involved and committed to the project during the complete project life cycle. From personal experience in software and infrastructure customer projects, I find that the sponsor of the delivery organization is very committed at the beginning of the project, up until the sale is done. Then the sponsor disappears. One reason for this behavior is that project sponsors do not realize the need for continuous project sponsorship from project beginning to the end. Different personality styles, lack of knowledge, different priorities, and lack of interest are other reasons. The sponsor may not have been very committed to the project in the first place, or may be too busy with doing too many other things. When measuring sponsors by sales objectives, then when the sales are complete, they move on. Perhaps it did not occur to them that by continuing as project sponsors and staying active, they would know the customer much better and be able to sell more. The measurement system may focus only on short-term, silo-based activities and reward efficient individual efforts instead of optimizing organizational throughput and accomplishment. The sponsor can bring perspective, reinforce the big picture, and fortify or diminish project effort based upon strategic goals.
Exhibit 6: Basic Project Portfolio graphical process
Challenges to address: The activities to perform, as a project sponsor, vary during a project life cycle. The level of involvement is also different. Project sponsors better serve project managers and their teams when they support and not interfere. During initiation and planning phases, the sponsor plays an active role in helping to establish project objectives. The sponsor guides the project manager to make decisions during organization and staffing phases. The project sponsor probably is more familiar with organizational politics and can help to navigate the political factors that influence project execution.
A problem that often comes up is changes to project priorities. The project sponsor can work alone or with other executives to agree on project priority and then inform the project manager, explaining reasons why they assigned that priority. Project sponsors are managers or upper managers who know or should know how the organization works. Then the project sponsor can also help the project manager in establishing processes and procedures for the project. The project sponsor functions as the contact point for customers and clients. Project portfolio reviews helped the organization to force executives meeting project managers periodically to review the project status, to see the problems and issues their project managers faced up, and then we moved forward through project sponsorship. These activities reinforced the project sponsorship culture in the organization.
Proactive sponsorship: The ideal situation is proactive sponsorship—getting a project sponsor who is committed, accountable, takes the project seriously, knowledgeable, trained, and able not only to talk to talk but walk the walk.
The person is trustworthy in all respects. His or her values are transparent and aligned with the organization and its strategy. This sponsor protects the team from disruptive outside influences, and backs them up when times are tough. Rather than having to correct a deficient sponsorship situation, a preferable way is to start out right in the first place.
Project reviews: To create a good relationship between the project manager and the project sponsor takes time and needs fine-tuning. One method we found useful and strongly recommend is to run monthly project reviews led by the project sponsor. Those meetings add value to the project manager, to the project sponsor, and to the organization. They force the project manager to review his or her project status and pending tasks. At the same time, it drives the project sponsor to know more about the project, the customer, and other project stakeholders. In the solution business, for example, that practice helps the project sponsor know the customer much better and therefore generate more business. To do those project reviews, I prepared an Excel spreadsheet that was filled in for every project reviewed. The questions in Exhibit 7 were asked in those reviews.
Exhibit 7: Project Quality Review checklist
There are some thoughts that I would like to share with you based on my experience in this project:
- Selling project portfolio management to executives and getting buy in needs time and effort as they need to be trained.
- Politics are active in every organization.
- After training executives in project portfolio and sponsorship, you need to follow up on the manager's action plan to achieve good results.
- Selling project portfolio management to executives is dealing with power in organizations.
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Graham, R. J., & Englund, R. L. (2004). Creating an environment for successful projects (2nd ed.). San Francisco, CA: Jossey-Bass.
Englund R. L., & Bucero, A. (2006). Project sponsorship – Achieving management commitment for project success. San Francisco, CA: Jossey-Bass.
© 2012, Alfonso Bucero, MSc, PMP, PMI Fellow
Originally published as a part of 2012 PMI Global Congress Proceedings – Vancouver - Canada