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The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.
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The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

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Page 1: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

The Power of PMO Leadership

October 2008

Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

Page 2: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 2

PMO Leadership

• Current Business Issues

• PMO Challenges

• Project Portfolio Management (PPM)

• PMO, PPM, and Project Leadership

• Conclusions

Page 3: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 3

Business Problem

“90% of Corporate Strategies Are Never Implemented” – Balanced Scorecard

Collaborative, 2007

Companies struggle with formulating realistic strategic goals and turning strategy into

outcomes

Strategic Planning

Execution Results

Page 4: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 4

Industry Project Success Measures

Standish Group Results

0%

10%

20%

30%

40%

50%

60%

1994 1996 1998 2000 2004 2006

Year

Per

cen

t Challenged

Success

Impaired

Standish Group

• Success: on-time, on-budget, with required features • Challenged: late, over-budget, with fewer features • Impaired: canceled or delivered but never used

Page 5: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 5

The State of PMOs

0%

10%

20%

30%

40%

50%

Per

cen

t o

f C

om

pan

ies

Level 1 - Initial Level 3 -Institutionalized

Level 5 -Optimized

PMO Maturity

PMOs have been around for several years, but few are mature

Page 6: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 6

PMO Underachievement

• PMOs could have much more of a business impact

• Most PMOs fail for these reasons:• Created for the wrong reason• Lack of vision• Lack of executive sponsorship• Poor execution - inconsistent methods, skills, governance• Too tactically oriented• Poor alignment with the business• Lack of leadership

Most PMOs end up as order-takers

Page 7: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 7

Positioning For Success

Value to Customer

Can

Uni

quel

y S

uppl

yUnique supplier of something nobody wants

CommodityProvide something that nobody wants and can’t even do it uniquely

Strategic Goal

Guy Kawasaki

Page 8: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 8

Converting Business Goals into Action

Project Portfolio Management connects strategy to execution

Why? • Because it encourages a discipline of strategic investing

• It provides transparency

• It addresses a commonly neglected issue – ‘is the strategic plan feasible?’

• It helps the organization focus on value delivery and execution

ResultsStrategic Planning

ExecutionProject

Portfolio Management

Page 9: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 9

What is Project Portfolio Management?• PPM - applying the tools and discipline of financial

management to project management

• Portfolios are investments capable of generating value

• Portfolio considerations• Investment strategy

• ROI

• Growth

• Profitability

• Balance

• Diversification

• Risk

• Alignment to goals, mission

Page 10: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 10

PMO Focus for Strategic Value

PMO Terrain

Lifecycle

Templates

Standards

Training

Change Control

Status reports

Projects

ProgramsInitiatives

Strategy

PPM

Page 11: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 11

Project Portfolio Management Goals

• Align projects to strategy

• Facilitate the transformation of strategy into results

• Eliminate marginal and poor project investments

• Provide a way to evaluate, prioritize, and sequence

projects

• Optimize resource utilization

Page 12: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 12

Breaking PPM Down

Construct Portfolio

ExecuteEvaluateAssess Results

Prioritize

Match Investments to Opportunities, Align with Business

Program/Project Management

Financial Retrospectives, Project Post Mortems

Account For All Projects

Review Investment / Resource Allocations

The Process of PPM

Page 13: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 13

Constructing a Portfolio

Business Info Financial

ProjectLine of

Bus. Business Initiative TypeFinancial

Contribution Motive Funded

Segment Gross Margin

Segment Growth

Investment (budget)

Investment as Percent of

TotalP14 Internal Fulfillment Throughput Maintenance Operational Discretionary Y 63% 15% 11,233,456$ 27%P18 LOB-A Customer Support Maintenance Operational Discretionary N 71% 5% 8,607,643$ 21%P4 LOB-A Fulfillment Throughput Enhancement Operational Discretionary Y 71% 5% 7,000,000$ 17%P3 Internal Customer Support Enhancement Revenue Discretionary Y 71% 5% 3,569,540$ 9%P7 LOB-B Grow US Sales New Operational Strategic Y 43% 7% 2,000,000$ 5%P16 LOB-D Grow US Sales Enhancement Revenue Discretionary Y 60% 13% 965,432$ 2%P19 LOB-C SOX Maintenance Operational Compliance Y 63% 15% 890,755$ 2%

Project Name Metadata Cost

Page 14: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 14

The Portfolio is Your Strategy

$0.00

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1,400,000.00

$1,600,000.00

LOB 1 LOB 2 LOB 3 LOB 4 Internal

Investment By Line of Business

Proposed

Funded

$-$200,000.00 $400,000.00 $600,000.00 $800,000.00

$1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 $1,800,000.00

Investment By Initiative

Proposed

Funded

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

Revenue Operations

Investment By Contribution

Proposed

Funded

Page 15: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 15

Using PPM To Increase Strategic Results

Strategic Planning

Execution ResultsFeasible?

Two Key Pitfalls PPM Can address:• Inadequate Resource Management• Inadequate Risk Management

Page 16: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 16

PPM Ensures Feasibility – Capacity Planning

0.00200.00400.00600.00800.00

1,000.001,200.001,400.001,600.001,800.00

Jul

Aug

Sep

Oct

Nov

Dec

Jan

'08

Feb

Mar

Hrs

Total Staffing

Adj. Supply Total Demand Proposed Funded

Are there enough of the right resources?

0.00

50.00

100.00

150.00

200.00

250.00

300.00

Jul Aug Sep Oct Nov Dec Jan '08 Feb Mar

Hrs

UI

UI Adj. Supply UI Total Demand UI Funded UI Proposed

Page 17: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 17

PPM Ensures Feasibility – Risk Management

Key Factors Contributing to Risk

Risk ProfileImpact on Core

Business

Ability to Deliver

Political Exposure

Page 18: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 18

Risk DNA – Contributing Factors

Risk Profile Ability to Deliver

Organizational Acumen and Experience

Requirements

Resource Capacity

Schedule Flexibility

Quality Control

• Do we control the plan?

• Do we know what we are doing?

• Do we have the commitment to deliver?

Page 19: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 19

Visualizing Risk Using PPM

Is there the right balance?

Page 20: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 20

PPM Benefits

• Project investments discussed strategically

• Feasibility and risk assessed and mitigated before investing

• Transparency to stakeholders

• Resources deployed on only the highest-value projects

• Detailed trade-offs understood when new ideas are suggested

Page 21: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 21

PPM Summary

• Project Portfolio Management involves applying the tools and discipline of financial management to project management

• PPM requires competencies in strategic planning, financial and project management

• Overall objective of PPM: Manage projects, people, processes, and information assets for maximum business benefit

• PPM requires leadership to be successful

Page 22: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 22

Project Leadership

Project Leadership is expertise that combines the science of project management with the art of leadership essential

to solving tough problems and getting business results.

PMO/PPM/Project Leaders:• See the big picture• Get people to agree on priorities• Are decisive• Accommodate different executive styles, processes do not• Are accountable; they address issues and mistakes• Understand how to turn vision into reality• Conquer uncertainty• Deliver results

Page 23: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 23

Managing & Leading

Enforcing Standards Resolving Issues Budgeting Planning Reviewing Status

Coaching Providing Vision Motivating Aligning Stakeholders Demonstrating Standards

and Providing Structure

“Managers are people who do things right and leaders are people who do the right thing.”

– Bennis and Nanus, 1985

“Most U.S. corporations today are over-managed and under led.” – Kotter, Harvard Business Review 2001

Page 24: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 24

Management & Leadership BehaviorsM

anag

emen

t

L

ead

ersh

ip

Identifies Project Tasks

Estimates Accurately

Manages Schedule

Manages Budget

Identifies Issues/Risks

Communicates

Leverages Adapts Challenges

Supports

Promotes Teamwork

Acts with Integrity

Makes Sound Decisions

Solicits InputMitigates

Issues/Risks

AnticipatesSeeks

FeedbackFosters

Ownership

Innovates Motivates

Envisions

Project Leadership behaviors augment and complement project management behaviors to enhance execution

Page 25: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 25

Leadership In Action – Strategic Execution

The Problem: The client needed to evolve its online platform in order to grow and better serve customers.

The Challenge: Complex, transformational projects often fail

Project Leadership Behaviors:• Created a shared vision and a process for achieving it• Established high trust at the executive level• Created an entrepreneurial atmosphere focused on execution• Garnered crucial support from around the organization• Forced tough decisions that kept the project focused and moving forward

The Result: A successful open, scalable new technology platform

Page 26: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 26

Project Leadership Testimony

“Point B brought in a way of thinking that elevated the internal mindset and successfully got us through this inflection point. They helped us focus our innovation and gave us a lasting understanding of how to handle large-scale projects in times of extreme transition.”

- CEO

Page 27: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 27

Conclusions

• Business issues abound• 90% of corporate strategies are never implemented• Project success rates are only 35%• Most PMOs rate themselves at 2 out of 5

• PMOs should strive to be a business partner, not an order-taker

• PPM will help improve business results

• PMOs, PPM, and Project Execution will not be successful without leadership

Page 28: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 28

Contact Information

• For a copy of these slides or other questions, contact:

• Gaylord [email protected] 206.517.2762

Page 29: The Power of PMO Leadership October 2008 Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.

October 2008PMO Leadership Slide 29

About Point B

Point B is the first professional services firm focused on project leadership and execution. Founded in 1995, the firm provides a diverse and experienced team of locally-based project leaders to companies in Seattle, Denver, Portland, Phoenix, San Francisco, Los Angeles and Chicago. Organizations ranging in size from startups to Fortune 100 corporations turn to Point B for its ability to step into any segment or role of a mission-critical project and help lead it to success. And, unlike many professional services firms, Point B works exclusively for its clients and does not enter into alliances, reseller agreements, or other relationships that might compromise the firm's objectivity. Point B has attracted top project leaders from various industries by offering a culture that promotes flexible work schedules and well-rounded lifestyles for its more than 300 professionals. Additional information on the firm and its offerings can be viewed online at http://www.pointb.com.