Measuring Strategic Performance PMIWDC June 20, 2011 11:30-13:00 Jenine Serviolo, PMP, SDI® Facilitator SMART Management Consulting, LLC 1
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Measuring Strategic Performance
PMIWDC June 20, 201111:30-13:00
Jenine Serviolo, PMP, SDI® FacilitatorSMART Management Consulting, LLC
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Introduction
President & CEO, SMART Management Consulting, LLC
PMI Involvement• PfM for the PM 2005• Standard for PfM 3rd Edition
Relevant Certifications & Industry Engagement• PMP• SDI® Facilitator• Master’s Certificate in PM,
GWU• Performance Measure
Blueprint with Stacey Barr• September 2011
o Balanced Scorecard Strategic Execution with Kaplan and Norton
o Relationship Awareness Conference
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Agenda
Strategy discussion Performance versus
progress Management
disciplines From the top Cause and effect
o Strategy mappingo Results mappingo Gantt chart
Defining measures Designing reports Report analysis
• Tracking and recommendations
Tips References
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Strategy
Strategy is about achieving change or maintaining excellence• Where are we now?• Where do we want to go?• How are we going to get there?
Strategy stretches the organization• Far enough for productive tension• Not so far to cause it to snap
Strategy comes from the top• It is the framework within which we
make operational decisions
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Performance vs Progress
Performance focuses on meeting objectives• Strategic• Top down view• Used by Executive Leadership and Portfolio
Managers to assess and manage strategy execution Progress focuses on hitting milestones
(schedule, cost, scope)• Tactical• Bottom up view• Used by Program and Project Managers to explain
performance variances to Portfolio Managers and Executive Leadership
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Focus by Management Discipline
Management Layer
Management Focus
Executive Leadership
Give us the overall direction to achieve the mission and vision
Organizational Performance
Portfolio Management
Ensures we do the best combination of work to meet the mission and achieve the vision
Portfolio Performance to meet objectives
Program Management
Ensures we do the work most efficiently to deliver benefits in a coordinated fashion
Program Performance to deliver benefits
Project Management
Ensures we do the work right - on schedule, within budget and scope
Project Progress to meet
milestones
The related management disciplines of Portfolio, Program and Project are also known as P3M3
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Portfolios
A portfolio is a collection of projects or programs and other work grouped together to facilitate effective management to meet strategic business objectives. (PMBOK® Guide – Fourth Edition)
The components of a portfolio are quantifiable; that is, they can be measured, ranked, and prioritized. A portfolio is a true measure of an organization’s intent, direction, and progress
Portfolio management (PfM) is the coordinated management of portfolio components to achieve specific organizational objectives. (PMI® Standard for Portfolio Management – Second Edition)
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Programs and Projects
A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually
Program management (PgM) is the centralized coordinated management of a program to achieve the program’s strategic objectives and benefits. It involves aligning multiple projects to achieve the program goals and allows for optimized or integrated cost, schedule, and effort (PMI® Standard for Program Management – Second Edition)
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A project is temporary endeavor undertaken to create a unique product, service or result
Project Management (PM) is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements (PMBOK® Guide – Fourth Edition)
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From the top
What do we need to achieve?• Goals Objectives
What do we need to Start, Stop or Change to achieve our objectives?
Alignment• Cascade down• Link up
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The Strategy Pyramid from Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World by David La Piana
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Cause and Effect
Cause and Effect relationships • Direct correlation between completing a work effort
and gaining a benefit or meeting an objective Cause
• Initiatives (Annual, Business, Corporate Plans)• Portfolios, Programs, Projects, Operational Activities
Effect• Goals, Objectives, Benefits
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Results Mapping
Stacey Barr • Performance Measure
Blueprint• Define the results that
spell success and depict them showing cause and effect relationships
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Success
Corporate Capability
Process
Activity
Results Mapping StaceyBarr.com
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Results Mapping
Focuses on the results of each area
Lines indicate key relationships• Companion• Cause and effect• Lead-Lag• Conflict
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Results Mapping StaceyBarr.com
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Strategy Mapping
Balanced Scorecard (BSC) is an industry best practice approach to manage strategic performance and is used for strategic planning
First detailed in a series of articles and books by Drs. Kaplan and Norton
Balances the Financial perspective with• Customer• Internal processes• Learning and growth
Requires us to develop objectives, metrics, collect data and analyze the organization relative to each of these perspectives
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Objective
Objective
Objective
Objective
Objective
Fin
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Objective
Mission/Vision
A strategy map assigns strategic objectives to each BSC perspective and defines relationships between efforts
• Reflects complete set of key objectives to achieve the vision
• Defines cause and effect relationships between objectives
• Action plans, performance measures and other detailed plans are developed and executed to support the strategy map
The balanced scorecard framework is recognized by the General Accountability Office (GAO) and used by the Department of Defense and other government agencies
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Objective
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Objective
Mission/Vision
Placement of Customer &
Financial perspectives
reflect working with Government
Organizations
Strategy Mapping
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Objective Gantt Chart
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Excerpt from PMI’s Project Management Journal, December 2010: Measuring Portfolio Strategic Performance Using Key Performance Indicators by Hynuk Sanchez and Benoît Robert
Objective
Statement of what must be achieved and what’s critical to its success
The level of performance or rate of improvement needed
How success in achieving the strategy will be determined
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Measure TargetKey programs, projects, activities required to achieve objectives
Initiative
Mission/Vision
Defining Performance Measures
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Defining Performance Measures
Focus on objectives using the measure and target
ExampleObjective: Develop and deploy timely IT solutions (from IT department)
Measure: By 30 SEP 2011 complete 50% of projects within 20% of their first approved date and cost baseline
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Defining Performance Measures
Measurement worksheet• Assigns ownership and responsibility• Defines data at lowest levels
o Key termso Calculationso Assumptions
• Sets data collection and reporting dates• Key communication tool
o Output becomes part of Strategic Communications Plan
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Performance Measure Worksheet
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Measure Status Is this measure fully operational, in use but needs updating or is it new? If it is fully operational or in use, please note the name by which the measure is currently identified today.
Definition of Key Terms
What terms need clarification to remove ambiguity from the measure or target?
Counts, Calculations or Formulas
How will the measure or target will be calculated? Be as specific as possible.
Indicator Criteria Define ranges for Red, Orange, Yellow and Green.
Baseline Status Is the measure baseline fully established, in progress, not yet started or is a baseline not applicable to this measure? Please add any relevant detail. If in progress, or not yet started, what needs to be done to establish the baseline?
Assumptions What assumptions are being made about the measure, the data, processes, etc.?
ExampleObjective: Develop and deploy timely IT solutions (from IT department)
Measure: By 30 SEP 2011 complete 50% of projects within 20% of their first approved date and cost baseline
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Measure Worksheet
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Data Sources From where will the Owner get the data – may be an electronic data store, data call, survey results, etc.
Data Collection Procedure
What processes, procedures and tools will the Owner use to gather the data from the source(s) and get the collected data to the Reporting Branch?
Data Collection Frequency
How often will the data collection procedure be followed?
Report Frequency How often will the Report Branch brief the C level executive?Report Format What format (run chart, list, pie chart, etc.,) will be used?Report Forum In what forum with the performance reports be briefed? Report Location Where will the Perform Reports be stored?First Data Due Date On what date will the first data be provided to the Reports Branch?First Data Collection Period
What period will the data of the first report cover?
First Reporting Date On what date will the Performance Report first be briefed?Change Management When will this measure be reviewed again to ensure it is sustainable
and remains valid for the goal?
ExampleObjective: Develop and deploy timely IT solutions (from IT department)
Measure: By 30 SEP 2011 complete 50% of projects within 20% of their first approved date and cost baseline
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Performance Reports
Focus on Objectives• Are we meeting the objective target? • Allow program and project managers to
focus on initiatives. Use their progress data, along with other information to explain performance variations
Chart and graph development• Keep it simple• Minimum “data bite” requirements
o Target and points over timeo Context or trend data
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Respond don’t react to data.
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Performance as Aggregate
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Bottoms up focus
Example from PMI® Standard for Portfolio Management – Second Edition
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Performance by Objectives
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Includes objective, measure, target and performance summary
Top down focus
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Explaining Performance
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Explaining Performance
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Use progress charts and reports to explain performance variations – only as needed
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Performance Reporting Tips
Start reporting objective performance right away – don’t wait for supporting initiatives or projects to start• Practice data collection• Keep performance visible• Acts as catalyst to start strategic initiatives• May see changes in performance without starting initiatives
Use top down performance reporting to stay strategically focused• Use bottom up reporting to help explain variances in strategic
performance Hold formal performance review meetings Ensure each level of management is clear on their
performance reporting role and responsibility
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Performance Reporting Tips
Use performance reporting as part of your communications plan
Provide training on chart development and reading
Keep charts simple Document and communicate what
defines your red, orange, yellow, green performance indicators • Be consistent
Once enough data is collected add control charts to graphs
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References
Strategic Planning • Balanced Scorecard
o Kaplan and Nortono Palladium Groupo Balanced Scorecard Institute
• Bascom “Dit” Talleyo Instructor and Coordinator, Intelligence Analysis Program, JHU o President at Corporate and Government Consulting
Strategic Planning Leadership
Performance Measurement• StaceyBarr.com
o Performance Measurement Specialisto Performance Measurement Blueprinto Key Performance Indictor Library
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References
Leadership & P3M3• Personal Strengths Publishing
o Strength Deployment Inventory® (SDI)o Strategic Intelligence
• Project Management Institute (PMI)• Project Smart
Chart and Graph Development• Steve Souza, Liquilight.com
Discover Your Data
• Stephen Few
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Questions?
SMART Management Consulting, LLC offers training, workshops and consulting in all aspects of
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Emotional Intelligence
Conflict Management
Performance ManagementTeam building
Delegating and Coaching
Balanced Scorecard
Strength Deployment Inventory ®
Portfolio Prioritization and
Ranking
• Leadership• Strategic Planning• Sustainability as Strategy• Portfolio, Program and Project
Management (P3M3)
Strategy Execution
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Contact Information
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