This is a discussion is about how the PMO is really just the custodian of a portfolio. The only reason a project portfolio exists is to deliver on business goals, and so the portfolio really belongs to “the business”. But in most organizations there is little consensus between executives on what the goals are and how they should be prioritized.
The process of getting agreement between executives on business priorities is, therefore, like herding cats… only these cats are killers because 72% of PMOs are called into question by these same execs.
It’s not your project portfolio
As a Brit, it’s my patriotic duty to watch Downton Abbey. There’s a law, apparently, which the Queen herself enforces with a nail-brush and rubber gloves. Now I realize that not everyone will know what Downton is…
Downton Abbey is a TV show that follows the fictional lives of Lord Grantham and his household over a period that starts in 1910 and ends sometime in the 1930s. Lord Grantham is an Earl. He rubs shoulders with royalty. He has a huge stately home and lots of servants. His estate covers hundreds of acres / hectares.
Yet he makes the point again and again that he is merely a custodian of the estate. The house and grounds will be there long after he’s gone; it’s an important employer, it’s a focus of the community. His job is simply to keep it all together during a time of great change.
It’s exactly the same with a PMO. Your task is to deliver on the projects that will help your organization adapt to change, to thrive and to deliver on its goals. The portfolio will be there long after you’ve died and are managing your Gantt charts in the sky. It’s the organization’s resources you’re deploying. It’s simply not your portfolio.
This means that you have a fiduciary duty to look after that portfolio, to maximize the return to the business.
Defining value
But how can you measure value? Many people try to use return on investment (ROI) or net present value (NPV) to define value, but these measures are generally not very flexible. They don’t necessarily take account of other factors (e.g. enhancing brand, strengthening the quality of service, etc.) These factors, of course, have an impact on financial performance, but often it’s in an indirect way and ROI / NPV can be almost impossible to define… yet the project can still add huge amounts of value.
This problem of defining value is even worse if you happen to be in a public-sector PMO. This is because the “bottom line” is not what’s important. The focus in a typical government agency is more around delivering “social good” (lower unemployment, higher educational standards, etc.) rather than a financial ROI.
So, you need a way to capture these goals and to assess their relative importance. But gets worse.
Cats in neck-ties
The executive team, and other stakeholders, will each have a view on what’s important, on where the value lies. Unfortunately for you, stakeholders will seldom agree on where the value lies. Herding these cats-in-neck-ties (or slacks, or pant-suits or whatever other dress code applies in your environment) is, however, a vital first step to delivering value from your portfolio. If you can’t define what value IS, you can’t build a portfolio to deliver it. It’s impossible!
Many PMOs / executive teams ignore the problem, or rather they think they are addressing it when they’re really not. What they do is run a beauty parade of possible projects in front of the execs who then approve/reject the projects. This leaves you wide open to projects getting picked because they were “sold well”, because it was a pet project for someone powerful, etc. This usually has very little to do with value generation and, if you know what you’re looking for, it’s easy to spot.
So how can you herd the cats without getting mauled?
AHP and value-oriented prioritization
It should be no surprise to hear that the analytic hierarchy process (AHP) solves this problem. In fact, it was designed specifically to solve this kind of problem. The discussion today is what AHP does to the cats – to your key stakeholders.
First of all, AHP forces stakeholders to be explicit about what their drivers are. This isn’t some woolly mission-statement. AHP forces you to brainstorm them, to write them down, and to make clear judgements over which goals and drivers are more important through a process called “pairwise comparison”.
You bring the stakeholders together and compare their answers in a very structured way. This pairwise structure allows you to identify areas where stakeholders agree and where they disagree. This gives them a chance to discuss, explicitly, the trade-offs involved in setting priorities and to build agreement around them, which is critical if you’re drive the portfolio using the priorities.
The structure of AHP means that your cats are neatly shepherded, the meeting is not a free-for-all. Rather, it’s focused and oriented around making quick-and-sharp decisions. The cats don’t really have a chance to get their claws out, because the process doesn’t allow things to spiral out of control.
The output is a clear set of priorities that are used as criteria for objectively selecting projects for your portfolio. This ensures that your portfolio is aligned with the value that the business needs. You are being a Good Custodian and adding value in your own right.
SOURCE: https://blog.transparentchoice.com/project-prioritization/cats-in-neck-ties-pmo-killers
