Project Management Institute

No simple matter

to keep organizational complexity from slowing progress to a crawl, portfolio managers must bring order to chaos

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BY DONOVAN BURBA

ILLUSTRATION BY CARL WIENS

Organizational complexity builds an intricate web of dependencies that can snare even the most experienced project leader. It introduces uncertainty and adds layers of risk that slow progress and absorb resources across the organization—all the way up to the C-suite.

A 2015 survey by The Economist Intelligence Unit (EIU) found that more than a third of global executives say managing complexity takes somewhere between 16 percent and 25 percent of their day—and 17 percent spend between a quarter and half of their time navigating complexity.

“Frankly, you would have to come from Mars if you haven't noticed the explosion of complexity to our organizations,” says Linda Szmyt, PMP, PfMP, head of enterprise project portfolio management, TMX Group, Toronto, Ontario, Canada.

This explosion is taking its toll on the bottom line. From slower time to market to decreased employee morale and retention, complexity is creating an economic drag across global organizations. Fifty-five percent of EIU survey respondents said complexity has cut into their organizations’ profits in the last three years. To fight the headwind, program, portfolio and project management office (PMO) leaders must be prepared to manage sweeping change and facilitate strategic decision-making, Ms. Szmyt says.

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PHOTO BY JOE DOOD

“Even nontechnical projects are complex enough to drive the need for enterprise project management.”

—Heather Casey, PMP, PgMP, PfMP, Floyd Medical Center, Rome, Georgia, USA

“As a portfolio manager I've had to spend significantly more time than ever before analyzing data and understanding the impact of changes to the portfolio,” she says. “At the same time, there has been a higher expectation from the C-suite that adjustments to the portfolio take into account all the interdependencies of the portfolio, as well as upstream and downstream operations.”

Tactical information gathering helps Ms. Szmyt cut through the static and make decisions that will deliver positive results in an increasingly competitive business environment. For instance, analyzing support tickets by software or platform version could help uncover a systemic issue in user adoption, ease of use or user training that needs to be addressed. This tactical approach helps time-crunched executives prioritize the right projects—rather than getting mired in complex metrics reports, says Ms. Szmyt.

The Human Element

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Combating complexity often means making large-scale shifts that affect teams across the organization. If project leaders try to change too much too quickly, the internal pushback could make matters worse. But if they don't do enough to challenge the status quo, systems and processes will stay the same. Finding that middle ground takes finesse, says Ken Kramme, PMP, PfMP, SAP services director and delivery executive, Augmentis Group, Brisbane, Australia.

“Often the organizations with which we deal have low or developing maturity,” he says. “The challenge is to properly pace while promoting the strategic growth of the organization in their adoption of portfolio management processes and practices. That respects the maturity while also challenging it.”

Breaking down programs and projects into more manageable chunks can help these organizations cut through complexity. But any significant changes in processes or protocols require that staple of effective project leadership: good communication. To ensure the right information gets to the right people, Mr. Kramme conducts communications requirements analyses and creates business process flowcharts that outline the decision-making and approval processes.

“When people have a common understanding of the end state, they can remain on the journey of change,” he says. “It's better to over-communicate than under-communicate.”

“People get overly fascinated about the analytics, when it's the story that counts,” she says. “It's the story that tells the C-suite the 'so what’ so that they can cut through all the complexity and make the best informed decision.”

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“I've had to spend significantly more time than ever before analyzing data and understanding the impact of changes to the portfolio.”

—Linda Szmyt, PMP, PfMP, TMX Group, Toronto, Ontario, Canada

Each organization is complex in its own way. Complexity often stems from three broad categories: human behavior, systems behavior and ambiguity. But its unique character varies in each organization.

In healthcare, for example, the industry's regulated nature, partnered with its increased dependence on technology, has led to overlapping risks, a broader pool of stakeholders—and greater complexity, says Heather Casey, PMP, PgMP, PfMP, IT director of projects, Floyd Medical Center, Rome, Georgia, USA. And the medical center's project leadership is on the front lines, charged with keeping the organization's wide-ranging portfolio on track.

“Departments are going to conferences, finding solutions and are ready to move on them immediately,” she says. “It's becoming essential for departments within a healthcare organization to become dependent on each other, as even nontechnical projects are complex enough to drive the need for enterprise project management.”

Because virtually every project at Floyd Medical Center, regardless of its internal owner, is in some way also an IT project, mature portfolio management practices have helped Ms. Casey bring clarity to a complex system. For example, when Floyd Medical Center had one all-encompassing portfolio of 150 projects, clinical projects tended to get most of the attention and resources. Projects in other departments, such as infrastructure, ambulatory, business, construction and strategic, often fell by the wayside.

So Ms. Casey created a new system where each of these departments has its own mini portfolio that's reviewed on its own. “We went from looking at an overwhelming list of 150 projects to prioritize to smaller portfolios of around 20 projects,” Ms. Casey says. “This made decision-making much easier.”

Cyril Cortizo, PMP, took a similar approach to loosen the knot of complexity in his role as project portfolio director at consumer goods firm Groupe SEB, Tokyo, Japan.

A portfolio management implementation in 2013 helped his organization break out of a partially siloed system and get more comprehensive information about all of the projects in the works—and make sure everyone was working toward the same goal.

“The creation of a project portfolio management department helped us to centralize some projects,” says Mr. Cortizo, who recently left Groupe SEB to pursue his MBA at INSEAD in Singapore. “It used to be complicated to handle resource allocation due to the different stakeholders, but project portfolio management helped us not only optimize resource management, but also simplify internal communication.”

Support From Above

An enterprise project management office or center of excellence can help an organization overcome complexity and deliver better business results. Here are some of the benefits this level of portfolio support can provide, according to PMI's Navigating Complexity: A Practice Guide.

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  • Standardized processes, procedures and guidelines that provide structure and help project managers navigate complexity
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  • Guidance on how and when to perform project and program assessments
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  • Stage gate reviews and audits that lead to better control and decision-making
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  • Clear roles and responsibilities, which reduce ambiguity
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  • Governance, expert feedback and mentoring that help eliminate roadblocks

Mr. Cortizo uses a combination of project management and spreadsheet software to manage the 100-plus projects in the portfolio, a system that gives executives an organized view of the big picture, even as the situation on the ground remains complex. Ranking projects by priority and highlighting critical risks and resourcing issues clarifies where executive input is needed and streamlines decision-making.

“The top management has better visibility on the portfolio, and the different teams have a better understanding and a better view of the progress of the different projects they are involved in,” he says.

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“It's important to have a good enough grasp of what is happening, steer the team in the right direction and keep things afloat without micromanaging.”

—Kim Ling Chan, PMP, PgMP, Fusheng Industrial Co. Ltd., Taipei, Taiwan

FULL-SCALE ASSAULT

Delegation is another way project leaders can manage systemic complexity—without putting the brakes on the portfolio's progress. Passing off some decisions frees up time for portfolio managers, PMO heads and C-suite executives to tackle bigger issues, such as strategic alignment and organizational structures. But successful delegation requires a project leader who knows when to jump in—and when to step back.

“Delegation is critical, because I can't be involved in everything,” says Kim Ling Chan, PMP, PgMP, CIO at Fusheng Industrial Co. Ltd., Taipei, Taiwan. “It's important to have a good enough grasp of what is happening, steer the team in the right direction and keep things afloat without micromanaging.”

But successful delegation still requires some oversight. Ms. Chan uses a “delegate and observe” approach, where she hands off responsibilities and then coaches her team as necessary. That might be a simple conversation for an experienced team member, she says, or a hands-on demonstration for someone more junior. She also recommends documenting who will make what decisions as soon as tasks are delegated to prevent conflicts among team members later on.

On the other hand, there are some decisions that are so important that the portfolio manager or PMO head should hold on to them, even at the expense of streamlining processes, Ms. Casey says.

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  • Organizational process assets, such as historical databases and lessons learned, which might reduce project unknowns
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  • Formal training on how to manage project or program complexity

“I tend to delegate more of the day-to-day mentoring of project managers and project management methodology development,” she says. “I tend to hold on to specific details of portfolio management, managing the governance process and overall resource management.”

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PHOTO BY JOE DOOD

PATTERNS IN CHAOS

Regardless of how responsibilities are assigned and tasks are prioritized, presenting a simplified—but comprehensive—picture of the portfolio helps executives provide meaningful feedback on its overarching direction, Mr. Cortizo says.

“We went from looking at an overwhelming list of 150 projects to prioritize to smaller portfolios of around 20 projects.”

—Heather Casey, PMP, PgMP, PfMP

“Portfolio management helped us to engage key stakeholders more easily. They were able to see a clear expression of global strategies through different projects,” he says. “They then can have better judgment and provide us better feedback. Transparency and communication have been greatly improved.”

More importantly, he says, since Groupe SEB started using portfolio management to counter complexity, all of its projects have reached their business goals. And that, ultimately, is the key: not only delivering projects in the face of complexity, but delivering projects that align with organizational strategy.

“For all business related to projects, the company keeps growing steadily,” says Mr. Cortizo. “And even though the business has become more and more complex, portfolio management helps us to keep control of our business.” PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK MAY 2016 WWW.PMI.ORG
MAY 2016 PM NETWORK

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