The original C-3PO

At the portfolio management level, selecting the ‘right’ projects and programs to continue, cancel or start is vital to the future success of the organisation. The CP3O should be a key advisor to the executive team responsible for the strategic plan and selecting the on-going mix of work for the organisation; balancing high-risk, high-reward projects that may define the future of the organisation with ‘safer’ projects that help keep the lights on and grow today’s business. The capacity and capability of the organisation’s program and project delivery systems is a key enabler and the primary constraint on this process. The CP3O should be the person with the knowledge to facilitate effective decision making.

Program management focuses on the efficient coordination of multiple projects to deliver benefits. Each program is focused on delivering key elements of the organisation’s overall strategy and consequently has a significant contribution to make to the organisation’s ability to deliver value to its stakeholders. The CP3O should be actively engaged in ensuring the programs meet their businesses objectives. The program sponsor and other managers may have line responsibility for the initiative, the CP3O focuses on skills and support.

Project management is focused on the efficient creation of the deliverables defined in the Project Charter. Projects are most effective when their objectives are clearly defined and unnecessary change is minimised. Whilst Project Managers may report to a variety of managers, the CP3O should focus on skills development and performance.

Most organisations have developed PMOs to support the delivery of Projects and Programs and to provide the data needed for both governance and Portfolio Management decisions. The development and operation of the organisation’s PMO structure should be a core responsibility of the CP3O.

The role of a Project Director (at least in Australia) is as the manger of project managers. The difference between Project Directors and Program Managers is the Program is created to deliver a defined benefit (the responsibility of the Program Manager) and projects are created to deliver the outputs required to enable the benefit. The Program Manager has overall responsibility for both the performance of the projects within the program and enabling the benefit; whereas Project Directors tend to be responsible for oversighting the performance of the projects within their area of responsibility. The Project Director is typically discipline and location based; eg, the Director for IT projects in Sydney. The project deliverables may contribute to a range of initiatives within the organisation. Project Directors should be direct reports of the CP3O.

The CP3O (or CPO) role is becoming more common. Defining the value proposition for this executive will be critically important to the improvement in delivering value through projects and programs. One of the key initiatives a CP3O can use to drive continuing improvements within the organisation is to develop a focus on process improvement using an effective maturity model. PMI’s OPM3 is probably the best tool from the perspectives of rigour and its focus on projects, programs and portfolio management.

This post has covered a lot of ground. For more information on specific topics see:
Portfolio Management: See White Paper1017
Types of Program: See White Paper1022
Programs -v- Projects: See White Paper1002
PMOs: See White Paper1034
OPM3: http://www.mosaicprojects.com.au/OPM3.html

Sourced from: Breaking through the Project FOG. Author, James Norrie, Published, Jossey-Bass. See: http://www.projectgurus.org/project-fog.html

Identifying, developing and using the right processes is a key factor in organisational maturity. Research by Carnegie Mellon University and the Software Quality Institute shows that organisations who improve their process maturity gain:

• improved schedule and budget predictability
• improved cycle time
• increased productivity
• improved quality (as measured by defects)
• increased customer satisfaction
• improved employee morale
• increased return on investment
• decreased cost of quality.

And the best way for an organisation to improve its process maturity, is to use a process maturity model. Three models seem to dominate, these are:

• CMMI from Software Engineering Institute (SEI): Carnegie Mellon University. CMMI (and predecessors) has been used by organisations for many years, there is statistical proof of effectiveness and two approaches to maturity assessment (staged and continuous). CMMI is a systems engineering maturity model with project management as one aspect of systems delivery.
• OPM3 from PMI: offers most comprehensive assessment and reporting, supported by software (OPM3 ProductSuite). OPM3 offers reports on a continuum of best practice by project, program and portfolio and by stages of improvement. OPM3 is a project, program and portfolio management model supported by hundreds of best practices. For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html
• P3M3 from Office of Government Commerce UK (OGC): offers a staged approach that supports an organization’s journey through progressive maturity in all three domains. P3M3 is more aspirational in its approach, lacking some of the rigor and detail of the other two systems.

For a more in-depth discussion see: Modelling Your Maturity, P3M3, CMMI and/or OPM3

These basic processes closely align with my SRMM model for Stakeholder Relationship Management Maturity. For more on this see: http://www.stakeholdermapping.com/

Maturity modelling is an important step to attaining process maturity, the challeng is choosing the best model.

The survey found the drivers for project management effectiveness were behavioural attributes such as problem solving and the ability to relate effectively with key stakeholders. Whilst many people may initially want to disagree with these findings, they are consistent with many other trends and on reflection quite logical.

Firstly, the survey did not look at the PM’s track record, merely the time the PM had been in project roles. It is reasonable to assume highly effective PMs will have a relatively short PM career and then move on and up the organisational hierarchy. Less effective PMs are likely to stay in their PM role focused on process and technology.

Secondly, whilst PM credentials such as PMP remain very effective tools in the job market; passing your PMP does not make you an effective project manager (see more on PMP). The PMP knowledge framework gives you the knowledge to be an effective project manager. Being effective requires you to become a competent project manager.

Competency has three aspects, knowledge, skills and behaviour:

• what you know,
• your ability to apply the knowledge (essentially personality traits) and
• your willingness to use the skills effectively (essentially behavioural traits).

Qualifying project managers based on behavioural competencies is in its infancy. The Australian Institute of Project Management (AIPM) has recently moved its professional certification program (RegPM) from a procedural view of competency (eg, do you have a project schedule – the artefact?) to a behavioural view of competency (how effectively do you manager the schedule on your project?). This is ground breaking work.

PMI have adopted a different, but similar approach in their program management certification (PgMP) with a 360 degree review testing how effective the candidate is in the workplace. These trends have a long way to go but are likely to be the next step in project certification.

Of more direct interest in the short term is the demonstrated link between how effectively a project manager engages with his/her key stakeholders and high performance outcomes. These skills are a core element in a number of workshops we run including Successful Stakeholder Management and The Science and Art of Communicating Effectively, and are supported in part by our Stakeholder Circle® methodology and tool set.

Learning how to apply the skills in the workplace though is not quite as simple as attending a workshop or buying a set of tools. Soft skills are very hard to acquire and use. My feeling is they are called ‘soft’ because they change shape and texture depending on the environment they are being applied within. The calculations for EV or CPM are universal; the best way to engage a senior stakeholder is totally dependent on the culture of the organisation. Some elements remain consistent (eg, the need for an effective relationship) but the way this is achieved varies.

Developing these advanced skills that are the attributes of high performance project managers requires context sensitive coaching and mentoring rather then formal courses (see: Executive PM Coaching & Mentoring). Ideally organisations seeking to develop high performance PMs will move beyond certification towards implementing internal mentoring systems – it’s the best way to ensure they are contextually relevant.

However, where we differ from the survey findings is that we believe certifications such as PMP are still relevant. Passing a PMI credential such as PMP or CAPM (see more on the PMI credential framework) is a positive demonstration of the initial knowledge component of competency; it’s just that knowledge alone is not sufficient.

Achieving this next level of high performance PMs will also require organisational competence in at least two domains. Process competence measured by tools such as PMI’s OPM3® framework and relationship management maturity measured by tools such as my SRMM® framework.

These are definitely interesting times for our profession.

PMI’s 2008 Pulse of the Profession survey shows improved performance from 2006 with over 55% of project completing on time and over 58% on budget.  The survey also found a strong correlation between the project management maturity of the organisation and improved project outcomes.

Meanwhile, the new Standish Group report (April 23, 2009) shows a marked decrease in project success rates,

• 32%   Successful (On Time, On Budget, Fully Functional) – worst in 5 years
• 44%   Challenged (Late, Over Budget, And/Or Less than Promised Functionality)
• 24%   Failed (Canceled or never used) – worst in 10 years

These numbers represent a downturn in the success rates from previous studies, as well as a significant increase in the number of failures.

Around the same time as PMI, Human Systems International Ltd and the Association for Project Management (APM – UK) conducted a survey. The results of this survey reported in the May 2009 edition of Project Manager Today which showed that whilst value realisation is a long way from satisfactory it is not as bad as Standish would suggest. The survey showed 48% of organisations do not measure benefits realisation and of the remaining around half achieve more than 80% of the expected benefit and 22% less than 60%.

It’s hard to know what to make of the conflicting data – superficially, it would appear that organisations that employ professional project management staff (APM and PMI members) do better then organisations overall. But even then, the results are not that good. 

An alternative view may be the definition of a project with the APM & PMI membership being more focused than the Standish survey. For more on this see: What is a project?

The last alternative is IT projects (surveyed by Standish) are worse on average than projects in general.

Confused????  I certainly am. The real key seems to lie in the area of project management maturity. Maybe OPM3’s time has come at last?? (PMI’s Organizational Project Management Maturity Model).

The second edition of PMI’s Standard for Portfolio Management describes good practices in the discipline of portfolio management focused on ‘doing the right work’. It does not matter how good an organisation is at delivering projects and programs if the outputs are of no real benefit to the organisation. On-time, on-budget and not used is just a wast of money and resources.

The new standard builds on the processes for managing a portfolio of projects and programs defined in the first edition to include Portfolio Governance to include the responsibility of senior management to be accountable for investment decisions throughout the portfolio lifecycle; and Portfolio Risk Management. The key element in portfolio risk management is not avoiding risk, but balancing the types of risk accepted to deliver the maximum potential return from the organisation’s overall investment in its portfolio of projects and programs. Portfolio Governance makes sure the investmant is managed effectively.

We have been advocating the need for PMI’s standards to include Governance since 2005, Patrick Weaver presented a series of papers at PMI Congresses that appear to have had some influence on the new Standard. For copies of the papers see: http://www.mosaicprojects.com.au/Resources_Papers.html#Governance

The most significant difference between the First edition and the Second Editions of the Standard for Program Management is in the development of program-specific knowledge areas. These included knowledge areas that are critical to successful program management as well as knowledge areas that are significantly different at a program level than at a project level.

A second significant difference between the two editions was in the removal of “themes” that were introduced in the first edition.

• The theme of Program Stakeholder Management was expanded into a knowledge area.
• The theme of Program Governance was significantly expanded and also became a knowledge area.
• The theme of Benefits Management was incorporated into the body of the document. 

The challenge now facing organisations is to make effective use of the resources represented by these new PMI Standards; this is where OPM3 comes into play.

OPM3® – Second Edition

OPM3 is a model for measuring project management maturity against a comprehensive set of best practices based on the PMBOK® Guide (projects), Program and Portfolio Management Standards. The updated OPM3 Standard, its self assessment module and the more capable OPM3 ProductSuite are fully aligned with the new PMI standards and have incorporated the concept of Organizational Enablers, previously only found in ProductSuite. Organizational Enablers are the attitudinal and structural elements of an organisation that enable the efficient management of projects and programs.

The updated OPM3 tools and reports allow assessment results to be categorised by Knowledge Area, by Business Results, and by Balanced Scorecard to ensure any planned improvements are focused on the areas of a business that provide the greatest return on investment. In short, OPM3 is the tool that allows organisations to create a better value proposition from their investment in projects and programs.

For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html (this page will be progressively updated as we develop a better understanding of the new OPM3 tools – Mosaic is one of the very few organisations in the Asia Pacific region with consultants qualifed to deliver OPM3 ProductSuite assessments ).

PMI Global Congress Asia Pacific 2009

I’m pleased to say my paper for the PMI Asia Pacific Congress is finished at last…. it’s focused on effective schedule management in the 21st century. To pre-view the paper go to http://www.mosaicprojects.com.au/Resources_Papers_081.html

Apart from my scheduling paper, Mosaic’s other contributor to this blog, Lynda Bourne, will be presenting the official PMI OPM3 presentation: ‘Optimizing Organizational Performance: Harnessing the Power of Project Management’ and also our workshop ‘The science and art of communicating effectively’ as part of the PMI SeminarsWorld following the congress.

So with all of the hard work done, we are now starting to plan our travels to Malaysia for February 2009. The PMI Congress is being held at KLCC from 9th to 11th Feb. We have both been regular visitors to KL over the years and are looking forward to returning to a wonderfully vibrant city.

Between us, we have been to all of the PMI Global Congresses in the Asia Pacific and find them both educational and enjoyable – if you can make the Congress, we would certainly enjoy catching up.

The PMI study, ‘Researching the Value of Project Management’  [download the summary] has clearly demonstrated the value of effective project management but was unable to quantify a specific ‘Return On Investment’ (ROI).  The primary reasons for this were: organisations do not measure business results from project management and they do not measure the costs of PM implementations. Consequently, they are unable to calculate a financial ROI for their investment. But ROI is only one measure of ‘value’.

The ‘Researching the Value of Project Management’ study employed a ‘multi-methods’ approach to collect and analyse data from 65 case studies involving 418 project descriptions from organisations of all sizes, types and structures spread around the world. Of these, 95% of the case study organisations realised a range of valuable improvements including:

• Improvements in decision making
• Enhancement of communication and collaboration
• Improvements in effective work cultures
• Alignment of practices, terminology and values within the organisation
• Overall effectiveness of the organisation and its management approach
• Improved transparency, clarity of structure, roles and accountability.

The types of value realised by the organisations included:

• Revenue increases
• Greater market share
• Increased Competitive advantage
• Customer retention
• Increased customer share (more engagements per customer)
• Reduced write-offs and rework
• Cost savings

Given projects account for 21% of the world GDP or 1/5th of the world’s value generation improving the efficiency of the process of PM delivery should be a valuable wealth generating activity.  The

One Size does not ‘fit all’

One of the key findings of the study was that understanding the organisational context and selecting the ‘right project management’ processes to implement are essential for value realization.

The context of the organisation, its geographical location and industry dictate the type of PM implementation that will be most effective. Fitting the correct PM implementation to the needs of the organisation was repeatedly demonstrated in the case studies as critical for delivering value. Unfortunately, there is no simple formula where implementing ‘x’ amount or type of PM will deliver ‘y’ amount or type of value. Each organisation is unique as are its PM needs.

Three of the factors that determine the appropriate ‘fit’ between PM processes and the organisation identified in the study are:

• Maturity.  Even minor improvements in PM resulted in value realisation in some organizations. Values associated with internal efficiencies and productivity dramatically increased in more mature organisations.
• Culture. National, organisational and even the PM culture of the organisation affects value realisation. Understanding the culture is a contributing element to the correct fit of PM implementation.
• Sustainability.  Once implemented, ongoing value realisation needs to be sustained by nurturing the PM processes. Even the organisational fit of the PM implementation should be regularly assessed and changes made as appropriate. Overzealous/bureaucratic PM practices can actually destroy value.

One option to determine the current levels of maturity and capability in an organisation and then plan the optimum improvement strategy for the organisations current situation is to conduct an OPM3 analysis this was discussed in the first blog in this short series, Waking up the C Suite. 

For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html

To buy ‘Researching the Value of Project Management’ visit the PMI MarketPlace

PMI are launching an on-going marketing campaign surrounding the release of its Value of Project Management research study. This groundbreaking study has clearly demonstrated the link between implementing good project management practice and a solid ROI [download the Research Overview]. PMI’s campaign through 2009 is designed to get C level executives and Boards of Management to recognise and support project management in their organisations by making a compelling case for project management’s ability to positively influence bottom-line drivers.

Increasing the awareness of the value of project management among the top organisational decision-makers is the vital first step in enabling organisations to introduce the capabilities they need to achieve well executed projects (as identified by OPM3 ProductSuite). Only when executives are actively thinking about, evaluating and seeking to improve their organisation’s project management practices, that the value of well executed project, program and portfolio management can  be fully realised.

Many organisations may already feel they have implemented effective project management processes and have an array of project, program and portfolio managers on staff. However, without an impartial measurement of their actual capabilities there is a high probability things are not as ‘rosy’ as senior management would like to think. There are several reasons for this:

• Taking a ‘top down’ view: Human nature tends towards optimism; experiments have shown most people feel they are ‘above average’ in any given situation. In the absence of effective benchmarking and an empirical measurement system some of the ideas in ‘prospect theory’ are likely to take over and senior management would ‘expect’ their business to be ‘above average’.
• From the opposite direction, it would require a very open culture to allow middle and junior managers to honestly inform their seniors ‘we are not very good’. In most organisations if this message is heard the messenger would be blamed.

As a consequence it is easy for senior management ‘think’ their business is in good shape and middle management is encouraged to support this view if they wish to preserve their position.  The antidote is hard data and benchmarking but the only way this type of assessment can be introduced successfully is from the very top.  The CEO and governing board must lead the initiative to assess the real situation with a view to investing in appropriate improvements.  To achieve this, the organization has to effectively assess its current level of maturity against an appropriate ‘maturity model’. Maturity models are not new, CMMI has been around in the systems engineering space for nearly 20 years and there are several newer models focused on project management.

PMI’s OPM3 (Organizational Project Management Maturity Model) offers a unique set of benefits including a focus on all levels of project governance from portfolio alignment through program management to project management. It also provides a benchmarking capability and an improvement planning capability that can be focused on the areas of ‘improvement’ that will deliver the maximum benefit to the organisation. In short, OPM3 is complete, comprehensive and customisable, particularly is the OPM3 ProductSuite is used.

The value of using OPM3 is not in the assessment; it is in the planned improvements to the organisations processes. Most organisations have a range of ‘low hanging fruits’ that are easy to pick for quick wins (and this is important). It is also true that the payback from increasing levels of maturity may reduce as the organisation’s maturity levels increase. However, as with the quality movement (TQM) the ultimate level in an OPM3 improvement process is the ability of the organisation to continually improve. This is an essential medium term objective, because if an organisation is not continually improving it will be going backwards compared to its competition. If you are not continually improving they will be with the inevitable consequences to your ‘bottom line’ over time (just ask General Motors!).

In my experience, the critical success factors for any organisational improvement initiative are:

• Firstly top level support from the CEO and governing board (it is impossible to initiate an effective OPM3 initiative at the middle management levels).
• Secondly the willingness to invest in improvements; over 95% of the cost of any initiative will be in developing and implementing the improved processes to achieve the desired benefits – doing the OPM3 assessment is the easy bit.
• Thirdly understanding real culture change takes time, investing in an OPM3 initiative can, and should, deliver quick wins but the real benefits come from the changed attitudes and culture within the organisation and this takes several years to really bed down. And until the culture of the organisation has changed, the CEO needs to keep focused on driving the improvements needed to make the organisation successful. 

The second part of this blog will provide an overview of the value proposition proved by PMI in its report Researching the Value of Project Management.

PMI are about to launch new versions of their standards for Portfolio, Program and Project management, and importantly their Organizational Project Management Maturity Model® (OPM3®). The new OPM3 standard incorporates the other three updates and takes on an interestingly new flavour:

• The weight given to ‘Organisation Enablers’ in the OPM3 standard has increased in recognition of the critical role the culture and capability of the ‘organisation’ has in allowing its projects to be executed effectively.
• The Standard for Portfolio Management – Second Edition has its focus on ‘selecting the right work to do’ (alignment) and introduces a focus on ‘Governance’ and ‘Portfolio Risk Management’. These changes place an emphasis on effective investment and risk management and an increased focus on delivering results from the organisation’s projects and programs.
• The Standard for Program Management – Second Edition has clearly differentiated the role of program management from project management.
• The PMBOK® Guide Fourth Edition’s biggest change is the increased focus on the importance of Stakeholders (including senior managers) in the successful execution of a project. The ‘iron triangle’ is no longer seen as sufficient.

The consequence of this major round of upgrades is to move the OPM3 construct towards a focus on the alignment of an organisations PPP efforts with its strategic objectives to achieve desirable ‘organisational development’. The OPM3 maturity model is ‘maturing’ into a very useful organisational asset. For more on OPM3 see: www.mosaicprojects.com.au/OPM3.html

Having been involved in a range of major ‘culture change’ initiatives and undertaken OPM3 ProductSuite assessments for major businesses, the importance of top level management support to this type of initiative cannot be over stated, it’s critical!

Over the next few weeks this blog will cover the changes to the key PMI standards and its key credentials. In the meantime:

• If you are interested in the challenges of implementing a culture change in a major business see our paper: Developing Stakeholder Management Maturity in a traditional business: an International Case Study
• For a discussion on the impact of ‘organisational maturity’ on the selection of tools see our paper: SRMM: The five stages of Stakeholder Relationship Management Maturity. The paper focuses on ‘stakeholder management’ but the principles apply to any maturity model and tool set.