Whew! These are some challenging times. As I read the news daily I am struck by the fact that our economic woes are primarily management failures - failures in the areas of governance and strategy. This only inspires me to redouble my efforts to spread the word about integrating the strategic level of organizations with the task level via great project management discipline.

As the CEO of a small company, it’s hard to fathom how corporate leadership could let an organization come within weeks or months of complete meltdown without making radical changes to avert disaster. Granted, the sheer size of some of the businesses that have failed creates difficulty - the old “turning the battleship” phenomenon - but still, when it comes to strategic and financial failure, the role of the CEO is that the buck stops here. A closer track on whether or not the organization’s strategies were working, and workable, would have flagged approaching problems months, if not years, ago. A scoreboard of measures that included metrics beyond the short-term financial ones would have helped, too.

A couple years ago, we envisioned that the role of project management would expand upward and outward from the project level to change the way organizations are run. That’s happening, though not as fast as I’d like to see. Governing organizations as portfolios of projects will streamline and revolutionize business, providing a path forward out of our present economic turmoil. As we discussed in our 2007 book, Seven Steps to Strategy Execution, strategy must flow down through the organization and permeate it, with governance bringing methodology, portfolio processes, and resource management into harmony. When we see an enterprise-level PMO orchestrating these areas -  as CBP research shows is increasingly the case - we know that the organization is moving toward a structure that can potentially achieve great things by streamlining processes, eliminating duplications of effort, and bringing project management discipline to all the organization’s strategic initiatives. When I see an organization implement the CPO title - Chief Project Officer - I’m even more impressed. We’ve long campaigned for this role, putting the discipline of managing by projects at the highest level of the organization.

Turning around failing projects … faltering organizations … struggling industries … a challenged economy … for CEOs and CPOs, it’s a great opportunity to put the logic of project management into play. Where old-school management and processes have failed us, it’s time to put some new thinking in place. That should be every leader’s game plan for 2009.

[NB to my Faithful Readers: Wednesday's post that was truncated has been corrected! If you missed the last couple paragraphs, they are up there now. Technical difficulties ... !]

In yesterday’s post, I alluded to headlines in the business and technical press that made me feel there’s a dawn simmering somewhere on the other side of this doom and gloom economy. Here’s a sampling:

IT Remains a Bright Spot in Gloomy Jobs Numbers according to Ed Cone of CIO Insight.

Not that IT is the last word in project management - there are plenty of non-IT applications of the discipline that also provide opportunities to streamline, cut costs, and avoid rework - but the Ten Upsides to the Down Economy discussed in Eric Lundquist’s eWeek blog display quite a few opportunities for project management (and project managers).

Small and Midsize Businesses Continue Hiring says this eWeek column, noting that despite the economy, small business owners feel optimistic overall. Since, historically, these are the businesses that create the most jobs, and where innovations are born, this is good news. The brontosaurs of the business world are operations-heavy, while smaller, newer businesses race from project to project.

Other articles view U.S. economic challenges from an outside perspective. For example, Coca-Cola CEO Muhtar Kent, interviewed on the Knowledge@Wharton site, remains bullish because he takes history into account, and because of his “outsider” perspective (as a Turkish-American educated in Britain):

[M]any Americans, under siege in the 1970s and 1980s from rising gas prices and economic competition from Japan, thought the economy was falling apart back then as well. “But the system did not collapse,” he noted. “America came out of that crisis so much stronger because … this country and this nation did what it always does best — reinvent itself and innovate.”

More about some of the more innovative projects and products in the news in our next post. Stay tuned.

One of my favorite scenes in movie history is from The Lion in Winter, which takes place at Christmas in the castle where Henry II (Peter O’Toole) has imprisoned his uppity spouse Eleanor of Aquitaine (Katherine Hepburn). In the midst of a raging domestic battle over the king’s mistress and his succession plans for their three sons, Hepburn winds up lying on the floor. “Ah, well,” she says in a calm, philosophical tone, her cheek on the threshold. “What family doesn’t have its little ups and downs?”

Well, it’s Christmas time again, and members of the global family we call “the economy” are having our ups and downs. Mostly downs, you might say, And yet - speedreading the headlines in the various business and tech newsletters arriving daily in my inbox, I’m getting the sense that, at the same time that certain aspects of our economic life are darkening and dwindling, other aspects are getting ready to come into their own.

Case in point: Management Consulting News reports in its December 2 edition on the generally lousy state of the ten top publicly-traded consulting firms the organization tracks. No surprise there; but wait - there’s one exception:

Of the companies in the MCNews Index, only Hewitt has managed to hold onto a gain in its stock price over the period of the last two years. From the inception of the Index in January 2007, Hewitt’s stock price has gained almost 6.0 percent, while all of the remaining companies face heavy losses in their stock values.

What interests me about this fact is that Hewitt, alone among all the other companies in the MCNews Index, has been a finalist in the CBP’s PMO of the Year Award competition. Their innovative management of information technology globally and their application of project management problem-solving techniques to the challenges of going public; are described in the 2008 CBP Summit awards program. Since I don’t much believe in coincidence; I’m betting that great project and portfolio management has allowed this HR outsourcing and consulting firm to do the things that less-savvy businesses are now scrambling to implement: resource optimization, portfolio management, aligning strategy with action via projects. None of these processes can be well managed without a PMO, so companies that hope to thrive in lean times should take a leaf from Hewitt’s notebook.

A few years ago I attempted to map the high-performing organizations in our Strategy & Projects study to available financial metrics. It turned out to be impossible, as the companies ranged from big nonprofits to small close-held consultancies; from government agencies to the Fortune 500, so no common metric could be found. But, what I did find when I Googled their names was a string of superlatives along the lines of:

Winner of the 2005 Best Place to Work Award!

Professional Services Company of the Year!

Customer Service Award!

Regional Poll Says We Are Tops in Patient Care!

… and so on. That’s when I knew that our instincts about the bottom-line effects of managing by projects were correct. Now, I’m thinking that economic collapse is the perfect environment for project management to prove that executing strategy as a portfolio of projects, balancing resources wisely across the portfolio, eliminating rework and duplication, and so on, will be the differentiator between organizational success and freefall.

Going up?

… well, besides our own that is–is Paul Ritchie’s/SAP’s Crossderry blog, especially the PM Quote of the Day feature. Worth starting your day with a cuppa joe and some words of wisdom. Paul’s wide-ranging net finds relevance to our work days in sources from Esther Dyson to Sappho. Kudos, Paul …

For an old-time print-publishing dinosaur like myself, publishing on a blog is the very essence of agility. The ability to “converse” with readers in real time seems as magical to me as the telephone must have seemed to a generation of folks accustomed to the pace of letter-writing. It also has an element of collaboration that enriches the usually solitary existence of this writer and editor: a “newsroom” feel, in which thoughts, opinions and resources can be shared at lightning speed.

(And then there is the thrilling ability to fix typos after you’ve gone to press–!)

Karen White wrote a couple weeks ago about the definition of agility, incorporating the ideas of teamwork and agency and iterative change; to this, I’d add that agility is a thing of our present internetworked age, a process deeply interwoven with the ability to collaborate, correct, and plan online or at e-speed.

The deep connection between the way we work now, and the tools that facilitate work, is the reason why IT has shown itself to be somewhat recession-proof over the past decade. And even now, in the face of what many forecasters are now calling “depression” rather than recession, I’ll go out on the limb and bet that those in IT who focus on the ways technology can facilitate agile collaboration and innovation will continue to thrive.

Likewise, project management has a tendency to flourish in rocky ground. Rework and missed deadlines, overrun budgets … all seem less drastic in a boom-times environment. When the mantra becomes “better, faster, cheaper,” project management—and project managers—have important contributions to make.

What’s really piquing my interest these days are the ways in which we can combine project management, agile methods, and collaborative technology to really pour alternative fuel on the fire (to coin a new phrase). At the CBP’s Strategy & Projects Summit last June, the CIO of the Kennedy Center, Alan Shapiro, delivered a presentation on the innovative ways his organization is using technologies we often associate with leisure time—Twitter, social networking, blogging, text messaging, wikis, Flickr, YouTube—to create community and manage projects at warp speed.

Such technologies are disruptive, said Shapiro, because they force project managers to think differently about process. “They can no longer see projects with a beginning, middle and end, but as a process of constant ongoing development.”

Given the shifting economic scene, I don’t think we will have the luxury to rest on our old laurels. Challenging times demand new tools. Here are just a few of the mentions I’ve found online of the ways companies are using new tech:

http://www.amanet.org/performance-profits/editorial.cfm?Ed=640
http://www.cogniview.com/convert-pdf-to-excel/post/how-to-run-your-project-on-the-web/
http://www.cio.com/article/print/163250
http://www.ddmcd.com/managing-technology/ok-what-is-a-project-blog-anyway.html

I’m curious to hear from others who are using these technologies in a business/project setting.

Without proper performance measurement, there’s no way to know. That’s why we need to measure performance. Yet the question persists:  Does the cost of measurement pay for the value?  My response is a classic one … it depends.  It depends on who’s asking you to measure…and why?

For example, if you feel that your process is not working and want to validate a new one, then yes, by all means … measure your performance!  You need to remember, though, a measurement program takes commitment, resources, and time. First, you have to know what to measure and always keep in front of you WHY you are measuring…what your objectives are, and what you are going to do with the information once obtained. Then, assuming you have the support and the resources, you’ll need a measurement model to be consistent in the planning, collection, and analysis of your measures.

Developing Performance Measures
While there is general agreement that “you can’t manage what you can’t measure,” the actual measurements themselves can prove to be a source of conflict. What will you measure and why? What’s the connection between the performance measures we collect regarding individuals and their tasks and the ultimate performance of the company—if any?

Measures are the easy part—knowing what you want to measure, and why, is hard.  Therefore, following a structured process helps to develop less fuzzy measures, while engaging a wide variety of the people who actually do the work in the process prevents the chosen measures from diverging too far from reality or ease-of-use.

There is no single set of measures that universally applies to all companies. The appropriate set of measures depends on the organization’s strategy, technology, and the particular industry and environment in which they compete. Like any aspect of any “living company,” measures cannot be static: they cannot be chosen once and locked into place. Along with strategy, they evolve and are refined as the organization becomes more focused on and skilled at meeting strategic goals.

Again, if you commit to a measurement program, you will need to have appropriate sponsorship and know what your ultimate objectives are; you’ll need a model to begin implementing. The PEMARI model (Planning; Establishing Measures; Measuring; Analyzing; Reporting, Improving) has proven to work well in dozens of organizations. (This model is discussed in more detail in our white paper here.)

Pilot your program using this model.  Show success and value to the organization, and then expand the program to a larger audience.  Performance measurement can transform your organization and reap huge rewards when done properly.  Basically, I’m an advocate.  My only advice is, don’t start it if you can’t finish it.  And, if it is a politically sensitive area, bring in external staff to facilitate so that there is no perception of an “agenda” from the stakeholders or senior management.

What have been your experiences–good and bad–with implementing measurement programs?

No, this post isn’t about the Rockies … except in the sense that projects face a rocky road when confronting with resource management challenges … which is, according to our research, the most common challenge in project management.

No, the divide I’m posting about is the one between projects and the executive level … the divide between decision makers and reality. That divide is legend, but it’s also apparently very real: in our latest study on Resource Management Challenges (to be released soon at www.cbponline.com) respondents indicated that executives commonly believe that there are enough resources to accomplish projects–when the reality is quite the opposite.

Resource Management literature is filled with descriptions of “best practices” and software vendors rave about the resource management capability of their sophisticated tools. Yet study after study shows that resource management issues continue to be the number one challenge to organizations that practice project management. What are the root causes of these resource challenges and what can be done about them? And how do best-in-class organizations manage their resources differently from the rest of us? The Center for Business Practices recently conducted a survey in order to understand the issues surrounding resource management challenges and to see if we could find some possible answers to those questions, and here are some of the findings:

• Resource management maturity is low in organizations
• There is a direct connection between the level of resource management maturity and the performance of organizations
• There are significant challenges particularly in resource planning and estimating

What’s particularly puzzling is that organizations fail to practice many of the resource management standards noted by the Project Management Institute. In fact, organizations don’t seem to even practice some basics consistently — like creating staffing management plans for their projects. But high-performing organizations are significantly more likely to practice these standards than low-performing organizations. Those standards in particular include:

• Resource career plans used to effectively utilize and train employees
• Information about potentially available resources used for estimating resource types
• Staff assignments are effectively negotiated with functional managers
• Scope of work and resource data is used in estimating activity durations
• The organization has a centralized pool of resources
• Resources required is used to determine the duration of activities
• Project performance reports provide information on resource performance
• Resource leveling is used to keep resource usage constant
• Resource reallocation from non-critical to critical activities is used

It isn’t hard to imagine how bad resource management can cause otherwise good strategic planning and portfolio management to implode. High-performing organizations (as identified by our study) address strategy, the portfolio, AND resource issues wholistically by centering project personnel in a strong, effective PMO. They have a resource-sharing culture as well as a project management culture.

So, to us it looks like the enterprise PMO is the pass across the Great Divide: a place where strategy management, portfolio management and resource management meet and synchronize.

You can read more about my PMI paper on this subject at: Resource Optimization: The Most Significant Challenge to Project Management Effectiveness

I’m presenting it at 2:30 today. Or, stop by the booth and chat with me about it if you are in Denver this week.

There’s much being written these days about the need for agility in business. Yet I wonder whether most folks really understand or appreciate what’s meant by “agility.” Agility does not mean unmanaged or undocumented! A look in the dictionary reveals a lot about agile management practices. The word agility, derived from the Latin agere, means “to drive, act,” and is related to the word “agency.” So, it means to have a sense of ownership, to be able to drive something forward. Other definitions also mention “ready ability to move with quick easy grace.” So it’s also associated with the quick and easy changes of direction and form called for by today’s business environment. Thirdly, the definition refers to “having a quick resourceful and adaptable character.” So, agility has three characteristics important to project management in this new business world:

• Sense of ownership and authority
• Quick and easy changes of direction
• Resourceful and adaptable manager characteristics.

Every organization wants to effectively execute strategies, but many struggle to implement a process for doing so. This struggle is one reason that the Balanced Scorecard has had such a wide following and impact on business. Simply put, the BSC emphasizes the linkage of measurement to strategy. For the first time, the details of the project portfolio (what the Balanced Scorecard creators call “strategic initiatives”) become important to a company’s strategic thinkers. Companies that have implemented this model have seen measurable bottom line successes, according to research by Scorecard creators Kaplan and Norton.

Such alignment resolves thorny project management problems. Many studies have cited the lack of executive support as a key contributor to project failure. Project managers complain that their projects do not receive the resources they need. Projects completed “successfully” by project management standards (on time, on budget, to spec) have been considered failures because they did not address a business need.  All these issues are alleviated in a company that ties strategic planning to portfolio selection and project execution. In our 2007 book, Seven Steps to Strategy Execution, we call this an “execution environment”: one where strategic vision waterfalls down through the organization, linking corporate direction to goals, objectives and performance measures at every level—providing each team member with the “zest” of understanding how their work contributes to the organization. Meanwhile, excellent project management provides the data that executives need to make adjustments to the overall strategic plan.

If you’re in Denver at the PMI Global Congress North America in Denver, Colorado, come talk with me in more detail about these ideas! My presentation based on our Seven Steps book is on Monday, October 20, 2008 from 12:45 pm – 2:00 pm.

Meanwhile, here’s a question for you: Isn’t “the strategic plan” just another way of saying “the project portfolio”? And, if not … why not?

Over the past ten years, we’ve come to value the results of our Center for Business Practices action research events, the Strategy & Projects Summit and Project Management Benchmarking Forums. At these events, project management leaders from major organizations have met and exchanged advice, best practices, challenges and solutions. They’ve forged working relationships with the CBP and with their peers that have helped them to positively impact the project management culture in their own organizations. With this blog, we’re expanding these face-to-face events to a global discussion network.

For years, we’ve watched as project management has expanded in influence and clout. We’ve followed with excitement the upward trajectory of project management within organizations - and, we hope, offered research tools to lead the way. From a tactical, single-project focus to the IT project office … to the enterprise Center of Excellence, and on to the EPMO … from the project to the project portfolio … from project excellence to strategy execution … .

Today, when management gurus and CEOs discuss execution, they are talking project and program management: governance, portfolio selection and balancing, performance measurement, resource capacity and competence, and the IT infrastructure that makes interdisciplinary management of “strategic initiatives” (those things we’ve always called projects) possible.

It’s an exciting time for project professionals. Best practices are only now being worked out for the deployment of project management at the strategic level. We’re constantly identifying new practices and approaches, and look forward to sharing them with you and hearing your feedback. Sign up below to receive a heads-up when new content is posted here; or come back and visit often.

We’re looking forward to the conversation.

Onward and upward,

Jeannette Cabanis-Brewin
Editor in Chief
Center for Business Practices