What the Rubik's Cube taught me about project management
Organisations are increasingly focussing on project management to rapidly implement strategy to create value in search for competitive advantage. The creation of value requires effectively integrating and governing strategy, portfolio, program, project, and operations (process) management. Focussing and managing these functions is often very different, requiring a broad range of technical skills, philosophies, and cultures. Successfully integrating these systems is as challenging as solving the Rubik's Cube. If we just focus on one face of the cube it is possible to solve that face. But when we move on to solving the next face we invariably undo our good work on the first face. Just as we need to approach the Rubik's Cube holistically if we wish to solve it, we need to do the same in integrating and governing strategy, portfolio, program, project, and operations management to create value.
Using the analogy and example of the Rubik's Cube and many years of practical experience, this paper will enable organisational leaders and project management professionals to understand and act on the barriers to integration. It will provide a model, tools, and process to clearly and constructively act on the barriers to integration, thereby improving project outcomes and accelerating the value creation process for any organisation.
This paper is based on more than 15 years of practical experience assisting organisations in introducing and harmonising portfolio, program, and project management with existing systems. Its aim is to practically examine the real-world challenges that organisations face in introducing these capabilities and to provide a practical approach (framework or model) to addressing these.
A fundamental conflict exists between projects and operations: projects seek to introduce change, and operations seek to resist and minimise the impact of change. This conflict needs to be carefully managed and balanced in the overall context of an organisation's strategy and current performance.
Most organisations approach improving project management by focussing on establishing a project management capability. This might include implementing a project management method, selecting tools for managing and scheduling projects, selecting, training and perhaps accrediting project managers, and setting up a Project Management Office. All of these steps are necessary and can be considered good practice. Organisations can take these steps to implement a project management capability and still fail to achieve acceptable outcomes from their projects. Outcomes achieved can typically include:
- Little marked improvement in project performance and outcomes
- Improved performance in project outcomes and reduced operational performance
- Little marked improvement in project outcomes and reduced operational performance
The cause of these results does not usually lie with the quality of the work performed in building project management capability. Rather, the suboptimal outcomes result from addressing part but not all of the areas of a business that impact upon project and operational performance. In this sense, the right work was completed in some but not all of the areas that impact on organisational, and therefore project and operational, performance.
Introducing effective project management is a major organisational change, normally requiring the introduction of portfolio and program management capabilities to ensure that projects are done right and the right projects are done. These new capabilities need to integrate with each other (portfolio, program, and project) and with existing organisational capabilities, specifically strategy and ongoing operations.
The impact of these changes has significant implications for the individuals within the organisation. Almost certainly they will impact upon the roles and responsibilities of most and the key performance indicators (KPIs) and the work performed by nearly all employees and contractors. The most significant impact is often the increased need for teamwork between functions that have different objectives, and in some cases, significantly different cultures.
The major challenge for many organisations is to establish and integrate these capabilities so that they are working in harmony for the overall benefit of the organisation.
Conflicts Between Functions
The nature of each function results in natural conflicts between them, which is understandable when the objectives of each function and behavioural preferences to deliver them are considered.
Typically, strategists and portfolio managers are forward looking and conceptual, more concerned with ideas and innovation than implementation concerns and details. Program managers tend to have their eye on the bigger picture and emerging opportunities. They are likely to be results-focussed, innovative, display a high degree of risk tolerance, be politically attuned, and keen to broker creative deals to support the desired outcomes of their programs. Project managers like to introduce change, are generally less creative than program managers, have the battle scars to remind them of the practical realities of delivering projects, value well thought-out detailed plans, do not like uncertainty, and favour risk management and contingency plans. Long, painful experience has taught them the value of fighting for as much budget, resources, and schedule as they can get. Operations professionals are cautious of change, as it introduces risk into the environment. They place great faith in tried and tested processes and practices, and are very concerned about the short and longer term impact of change on their ability to operate and support the many system processes within their environment.
Understanding the differences in objectives and preferences helps us understand why there is often tension and sometimes conflict between those who “change the business” and those who “run the business.” As we can see, the sources of these conflicts are structural, driven by the need to create and sustain value. As the causes are structural, so too are the solutions.
There are many ways of integrating the functions of strategy, portfolio, program, project, and operations management to ensure optimal outcomes. The key point is that functions need to be integrated and the integration process needs to recognise that design and implementation decisions made in one function will impact the others.
The problem of solving the Rubik's Cube is a good example. Let's imagine that we have a Rubik's Cube and the face that represents the operational processes of the business (say, orange) is solved. This could represent the fact that a lot of good work has been put into defining, implementing, and improving the business processes to the extent that they are stable, operating efficiently and effectively.
The CEO decides that while the operational processes are very sound, they are not the fastest way of introducing new products and services, and determines that a project management capability is needed. The team that is formed to deliver the project management capability is given the same Rubik's Cube and asked to solve the green face, representing project management. The team focuses on solving the green face (this was the job they were asked to do) and does not take into account the need to maintain the orange (process) face. After some effort, the green (projects) face is solved, but the orange face is scrambled. The team, using the knowledge that they gained, tries to re-establish the orange face. When they have achieved this they find that green face is scrambled, and on it goes. The team wonders if they will ever be able to solve both faces at the same time.
Metaphorically, this is what often happens when organisations introduce or improve project management. We try to get project and operations management right and never seem to be able to find the right balance and harmony between the two. Organisations often find that projects and operations conflict in their objectives, compete for the same resources and lack a clear decision-making framework to resolve this conflict. Often the conflicts are resolved on the basis of power and politics and the organisation never achieves the results that it could have or needs.
There are many different approaches and methods for solving the Rubik's Cube. All involve approaching the problem holistically: understanding that an action taken on any face impacts each of the other faces. Most solutions counterintuitively involve approaching the problem in layers rather and faces. A holistic, layered approach:
- Solving one face, taking into account the need to establish the first layer of the four faces supported by this face
- Solving the middle and top layers
- Solving the top face while keeping the top layer intact
In this sense, every action in solving the cube is taken in the context of the whole cube, not just the part being acted upon.
On the surface, integrating the functions of strategy, portfolio, program, and operations (process) management may seem to be straightforward, as standards exist for portfolio, program, project, and process management. In fact, these standards are well defined, and it is possible to implement existing frameworks and methods. However, it is very unlikely that these frameworks and methods have been holistically developed and if so, they almost certainly have not taken into account the needs and culture of the target organisation.
A change of this nature is a true organisational change and needs to consider:
- The strategic context within which it is implemented, specifically, the key critical business issues that will be addressed by implementing such a change and their relative priorities. For example, responsiveness to changing customer needs may be more important than reduced cost. In this case, changes that accelerate improvement of customer satisfaction should be prioritised ahead of those that reduce costs
- Existing organisational strengths and deficits in each capability
- The conflicts within the organisation that will likely result from such a change. This includes understanding whose role and authority will be changed, positively and negatively, and actively managing and resolving the resulting issues.
- The overall maturity of the organisation with regard to project and operations management
- The prevailing culture and values of the organisation with regard to changing circumstances
- The fact that people are more open to and supportive of change when they understand its greater purpose and are positively engaged in the process of change.
Barriers to Integration
In the author's experience there are nine common barriers to integration, and if the majority of these are addressed, an organisation can be well be positioned to establish and harmonise strong project and process management capabilities. Following is a summary of each barrier.
1. The organisation's strategy is poorly defined and understood. The strategic objectives, critical success factors, and desired results are not sufficiently defined, articulate, and communicated.
2. Key Performance Indicators (KPIs) are misaligned:
a. Functions and individuals within functions are assigned KPIs that are not aligned to organisational objectives.
b. Assigned KPIs drive functions and individuals to compete with each other.
3. Inconsistent and incomplete business cases:
a. Standard business cases are not used, making it impossible to perform a like-to-like assessment when selecting and prioritising projects.
b. The business case deals only with what is easy to measure. Normally, this is quantitative financial data, not taking into account the qualitative benefits required.
c. The business case does not assess the organisation's capacity to deliver the project, particularly Full Time Employee (FTE) or asset constraints.
d. The business case does not sufficiently address the impact to existing operations.
4. Lack of an overall functional and systems model and architecture to integrate the differing functions. Each function needs its individual management systems, methods, and tools to achieve its objectives. Each of the following is critical:
a. The systems, methods, and tools do not overlap and compete for the same work.
b. The systems, methods, and tools holistically address the scope of functional requirements, ensuring that all required functions are clearly identified and ownership is established.
c. Clear and consistent functional outputs are defined and supported by interfaces defined to ensure that the necessary information and work products flow between each function at the appropriate times.
5. The organisation is not effectively designed to deliver the functions of project and operational management.
a. Organisational design does not include all required functions
b. Organisational design does not provide the required focus and skillsets for all functions. For example, it would be unusual for an excellent strategist to be an excellent project manager. The author has seen more than one organisation where the strategy department has been responsible for project delivery, and the staffing plan did not include appropriately skilled project managers.
c. The tasks that each function must do in support of the others are not defined within the roles and responsibilities sections of job descriptions.
6. Differing and inconsistent implementations of processes and methods that are common across the functions. For example, risk management is performed by all functions within the enterprise and needs to operate at the operational, management, and enterprise levels. It is not possible to perform effective risk management at the enterprise level if differing assessment standards are used at the management and operational levels.
7. Tools are not aligned to process and informational requirements.
8. Lack of teamwork. By definition, each function needs people with differing interests and preferences. For example, strategists are likely to be highly conceptual and forward-looking, and not overly interested in the needed implementation actions. On the other hand, operations professionals and project managers are likely to be practical and interested in the here and now. Project managers are most interested in delivery to scope, schedule, and budget, while operations is more interested in how effectively and efficiently the new system can be run.
9. Ineffective Governance. Project and operations management are organisation wide-activities that need to be actively governed at the strategic, management, and operational levels of the organisation. Good governance ensures that the above barriers are removed.
A Model to support Organisational Alignment and Functional Integration
The following model describes the functional architecture and key system components that must be present to achieve effective organisational alignment and functional integration.
Figure 1 – Model for Organisational Alignment and Functional Integration
Many years of practical experience in a number of industries in Australia, Europe, and the U.S. suggest that the following areas be considered, in the sequence presented below, in implementing the model.
1. A Cohesive, Articulated, and Widely Understood Strategy
A clear, concise, well communicated and understood strategy is essential to shaping the direction of the organisation and driving project and operational activities. At a minimum, the strategy needs to define the organisation's vision, strategic objectives, critical success factors, and desired results (in the form of a benefits register). A clear planning and decision-making framework can be built only if such a strategy exists.
A properly defined benefits register contains the KPIs for the organisation in a Specific, Measurable, Achievable, and Timebound (SMART) format. It is important that the benefits register is not restricted to financial measures, and includes qualitative and quantitative measures. Defining the benefits register in the context of strategic objectives and critical success factors facilitates this approach.
Practical experience has shown that clear linkage within the benefits register to the strategic objectives and critical success factors provides significant benefits in enhancing organisational understanding of the desired results and provides a clear decision-making context.
A fully defined, understood, and endorsed benefits register provides the master set of KPIs needed to effectively and efficiently align all project and operational activities of the organisation. It is a critical requirement for effective portfolio management.
The vision, strategic objectives, critical success factors, and benefits register can be regarded as the organisation's “Operational Performance Constitution,” enabling effective governance and alignment of KPIs and work across the organisation.
2. A Portfolio Management Capability That Addresses Demand and Supply
Many implementations of portfolio management focus on selecting and prioritising projects (demand) based on various financial measures such as ROI, IRR, and so forth, and do not take into account the organisation's capability to successfully deliver the project (supply).
As the benefits register has been defined using quantitative and qualitative data, selections can be made in the context of value sought by the organisation, not just economic returns.
Effective portfolio management is facilitated through the use of standard business case templates for selecting and prioritising projects, allowing like-to-like assessments of proposed programs and projects. The templates ideally include, at a minimum:
- The contribution that the program or project will make to benefits as defined by the organisation's strategic objectives, critical success factors, and benefits register
- The achievability of the project, using a standard set of criteria. This includes an assessment of the impact of the change to the affected areas of the organisation, the FTE required, and assets used or impacted. This enables the proactive identification of constraints in supply. These can be addressed by:
- Providing additional resources through sourcing and recruitment activities, or re-prioritising competing projects
- Pacing the project through prioritisation actions
- Re-scoping the project, so that it delivers acceptable value and avoids the constraint(s)
- De-selecting the project
This ensures that the risks and opportunities associated with delivering selected projects are well understood at the point of approval, allowing these to be actively monitored throughout the project's life.
Effective portfolio management does more than approve new projects. If projects are to be selected in the context of the organisation's strategy, contribution to benefits, and delivery capability, it makes good sense that they are subject to ongoing review at the portfolio management level to ensure that the context in which they were approved remains valid and that planned benefits are being effectively delivered. Projects that are not performing may be provided with additional resources, be subjected to scope changes, or cancelled. This does not replace the role of the sponsor or project board. Rather, these decisions are made in the widest context of the enterprise and strategy.
3. Clear Functional Delineation Supported by Effective Organisational Design
Strategy, Portfolio, Program, Project, and Operations Management often have different definitions from organisation to organisation. They also share a number of common processes (for example, issue, risk, and change management) that serve similar and complementary purposes.
The first step recommended in the process is to clearly define the objectives and KPIs of each function. Careful consideration needs to be given to detailing the functions to be performed in each area, allowing the identification and clarification of gaps and overlaps. The key output of functional analysis is a logical and workable grouping of function, based on the importance and volume of work performed and the skills and capabilities of available personnel, taking into account relative strengths and weaknesses in each capability. Having done this, the overlaps or interfaces between functions needed to create a value chain need to identified. Each interface needs to be specified (format, content, and so forth) and the processes, methods, and tools that support it identified.
From this analysis, specific roles and responsibilities can be assigned, avoiding duplication between areas. For example, portfolio managers select and prioritise projects, program managers approve commencement of projects, and project managers complete the initiation phase.
4. Alignment of Key Performance Indicators
The benefits register defines the KPIs to be achieved at the enterprise level. As these are developed from the strategic planning process, they address all aspects of the business and can be used to set KPIs for every department and individual in the business. The KPIs for departments and individuals represent their contribution to the overall achievement of benefits. A recommend practice is to include KPIs that relate to operational stability for project team members and KPIs that relate to project success for operations team members. This approach recognises that benefits are achieved through operational and project activities and assists in facilitating cooperation and harmonising the conflict between “change the business” and “run the business” functions.
When all KPIs have been assigned, all work currently performed in the organisation can be reviewed to ensure that it is contributing to the desired benefits. Activities that are not can be reviewed to ensure that the strategy is complete. If the strategy is complete then the work represented by those KPIs is not required, freeing up further resources to support project activities or strengthen stressed operational areas.
At this point, all employees, through the organisation's strategic objectives, critical success factors, benefits register, and individual performance plan, has a clear understanding of their roles in achieving the organisations strategy. This framework and structure, supported by the governance system, provides clear context and a decision-making framework to constructively resolve issues as they arise.
The KPIs are also informational requirements to be met by the processes, methods, and tools used within the organisation.
5. Integrated Processes, Methods, and Tools
A processes, methods, and tools framework is needed to support integration. Each function will have its own processes, methods, and tools. Based on the outputs of the functional analysis and KPI alignment activities, a clear understanding is developed regarding the relative scope and required outputs of these. The issues, risk, and change management processes need to operate consistently across the organisation and use defined escalation rules to support the governance model. These requirements can then be fed into an overall processes and methods architecture.
It is critical that the project scheduling, workforce management, and time recording processes are integrated. All projects consume resources and no project ever executes to the planned estimates and schedules. These processes manage the activities of the organisation's FTE, who are often the most significant resource constraint on the supply side of the portfolio.
Wherever possible, tooling decisions should occur after the above activities have been completed.
6. Integrated and Enabling Governance
The purpose of governance is to ensure that the organisation's strategy, as defined by the benefits register, is achieved. Governance ensures that the management systems, processes, tools, and methods are aligned to deliver, and are delivering, the benefits register.
In this sense governance is much more than a controlling process (although implementing controls is a critical aspect of any effective governance system). Governance is an active and adaptive function, monitoring actual results to ensure that planned results are achieved. When they are not achieved, governance takes enabling actions to rectify the situation.
Governance operates vertically at the enterprise (strategic), management, and operational levels of the business, and horizontally within the different functions or departments of the business. Governance is not a standalone department. It is a capability and system that is deployed to all areas of the organisation, aligned with accountabilities and operated by the appropriate executives, managers, and professionals. Accordingly, it is critical that a cohesive governance model exists and that all stakeholders have appropriate training and support in carrying out assigned roles.
Achieving good project and operational outcomes requires an integrative approach to the functions, systems, and tools required to deliver the result. Integration is most effective when:
- Approached holistically and driven by a clearly articulated and understood strategy supported by engaged and enabling governance
- Portfolio management is based on the creation of value, not just financial returns
- All functions, employees, systems, and tools are aligned to the benefits that the organisation is aiming to achieve
- An integrative framework and model is available to assist stakeholders in making sense of the changes needed and possible implementation approaches
- The structures that create tension and conflict are positively acted upon to address conflict
It is the author's experience that those organisations that take this approach achieve significantly greater results than believed possible in a relatively short timeframe (typically one planning cycle). Furthermore, the organisation can experience unplanned benefits, including increased employee engagement, collaboration, creativity, and commercial focus. These benefits permeate every aspect of the organisation, increasing its capability to execute future strategies.
© 2008, Rod Gozzard
Originally published as a part of 2008 PMI Global Congress Proceedings – Sydney, Australia