Author: Kiron Bondale

 It is hard to refute the position that an objective approach to prioritizing projects can result in better realization of business value than subjective methods.  For determining order of execution as well as for resolving resource contention during execution, objective methods can reduce the influences of politics, bias and emotions from the decision making process.

However, this is not an easy evolution for most organizations given the size and complexity of their project portfolios.  With a small portfolio size, a governance committee could use pair-wise comparisons to order the projects, but the significant effort involved in applying this methodology to fifty or a hundred projects reduces the benefits and applicability of this approach.  Scoring models are another commonly used method that can be used to prioritize portfolios – the challenge with these is that scoring of individual factors is often done subjectively, and it is difficult to guarantee a lack of bias from the analysts that are performing the scoring.

Instead of just relying on financial portfolio management theory which emphasizes the use of key performance indicators as a prioritization method, perhaps we can apply some lessons from modern consumer marketing theory?

In her book, The Art of Choosing, Dr. Sheena Iyengar explores a common consumer paradox – we like the idea of choice when selecting products, but we overestimate our capacity to effectively manage those choices.  Faced with too many product choices, the actual task of choosing causes us stress or pain instead of the pleasure that one would expect.  Given this, four approaches are suggested which can be adapted to project prioritization.

1. Cut the number of options – It will be easier to prioritize 10 critical projects than 50.  Of course, this requires more discipline in selecting which projects will be accepted now, and deferring all others.
2. Create confidence through expert recommendations – While scoring models must not exclusively be used to prioritize project portfolios, they can “capture” expert opinions and could be a valuable input into a governance committee’s discussions.
3. Categorize your offerings so that the consumers better understand their options – This is a basic principle of project portfolio management as this categorization or classification can facilitate multi-dimensional analysis which in turn can increase the likelihood of balanced decision making.
4. Help consumers by gradually introducing complexity – While a governance committee might be overwhelmed if asked to prioritize 50 projects during their first review meeting, starting them off with a handful of projects and then slowly increasing the number as their confidence and capabilities improve might be a better approach.

Bringing objectivity to project prioritization can be an arduous task, but exploring and applying the lessons from other business disciplines may help to ease your governance committees through this transition.

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Jim Collins wrote “Good is the enemy of great” as a corollary to Voltaire’s quote “Le mieux est l’ennemi du bien” (“The best is the enemy of the good”).

This phrase comes to mind when reviewing a common approach to improving organizational project management capability.  A catalyst motivates the leadership team to invest in project management improvements – perhaps it’s a string of failed projects, or reduced market share resulting from poor portfolio decisions or from increased time-to-market.  A consulting firm is brought in to implement a governance framework, processes & tools to address the issues.  The organization’s project management capabilities initially improve but then they stagnate.  Sometimes, this is a conscious decision if the perceived benefits resulting from continuous improvement are less than the change management and financial costs incurred.   Unfortunately, a many times it is simply a shift in priority – once project management maturity is no longer the “flavor of the week” or the management team is more keenly aware of the change management involved, the initiative gets shelved.

The one scenario where a commitment to greatness can hurt an organization has to do with regulatory projects.  The FUD (Fear, Uncertainty & Doubt) factor associated with Y2K, Sarbanes-Oxley & HIPAA generated obscene amounts of effort and money to be squandered on projects that at best were gold-plating and at worst created critical opportunity costs for strategic (albeit discretionary) spending.  While we hope that management teams learn from their mistakes, it won’t be long before some new regulation emerges that restarts this process.

This is an opportunity for project management to evolve beyond its traditional role of planning and executing projects to ask the important question “Are we doing the right thing?”. 

The project manager can first confirm that their organization has a defined policy for the regulations.  I’ve witnessed some compliance projects whose scope was purely defined by a third-party consultant – this is akin to the fox guarding the hen house!  If your organization has not established a documented stance for compliance with a particular regulation, the project manager should push for that. 

Once an organization policy is in place, the project manager can facilitate the discussion between the compliance champions (who might be inclined to do too much) and business stakeholders (who might be inclined to cut corners) to forge a scope for the project that everyone can live with. 

At the portfolio level, it can become difficult to prioritize individual non-discretionary projects against the discretionary, strategic ones.  Depending on who has more influence, either the non-discretionary projects will get higher scores, or the discretionary ones will.  A better approach is to not try to prioritize these two different sets of projects against each other individually, but rather to focus on defining what percentage of financial or resource capacity will be allocated to each in aggregate.  Once that has been defined, it can then be left to the appropriate governance committees to decide how this allotted funding will be spent for individual initiatives.

Regulatory and other compliance projects are hygiene factors –  your organization won’t succeed through over-investment in these projects as your clients and regulatory bodies expect that you will be compliant.  Project management can play a key role in helping the organization strike the “good enough” balance between catastrophic risk and gold-plating.

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If you have been involved with project management for any length of time, you likely have been asked to explain or justify the value of project management.  The challenge in answering this question is that while it is fairly easy to provide a comprehensive response, you may not feel that confident if you are put on the spot to answer this question in a stereotypical “elevator pitch” of thirty words (or seconds) or less! 

A reasonable assumption is that the answer will be role-specific based on who is asking the question so let’s evaluate this from the perspective of key stakeholders.

Project sponsors provide financial and influence funding and support for projects.  In this capacity, they act in a similar fashion to investment managers in a brokerage. To be successful, they need their investments to provide guaranteed returns.  While a project manager cannot be held solely responsible for the successful realization of the benefits of a project, application of project management practices can reduce the surprises and increase the likelihood of projects being completed within established constraints.  This in turn helps to reduce uncertainty for the sponsors so that they can focus on ensuring that the benefits of the project are achieved.

For resource managers, gaining better visibility into the demands on their staff while simultaneously reducing resource contention is a key benefit.  Without knowing when resources are needed, for how long, and with what skills, as well as knowing when changes occur on projects that can affect these commitments, it is very difficult for them to do their jobs as resource providers or to motivate their staff.  Project management can extend the knowledge of planned resource allocations and can improve visibility into those factors that could affect the planned allocation.

For senior executives, projects are a means to an end. They help to deliver the strategic plan for the organization as well as supporting other objectives, including regulatory compliance and maximizing shareholder value.  In the absence of project management practices, the likelihood of success for large initiatives rests solely on the skills, motivation and dedication of staff. This is certainly a critical success factor for any project, but insufficient to assure executives that long running projects will complete on time and on budget, while providing the expected “bang for the buck”.

Finally, let’s consider project resources. They might perceive project management as an administrative burden.  However, with appropriate project management skills being applied to their projects, they should have a better understanding of their short and long term task lists as well as how the work they are doing will benefit the organization.  The issues they encounter on their projects will hopefully be escalated and resolved in a timely fashion, and the expectations for how they perform their work, as well as the performance evaluations they receive, should not be unexpected.

While each role may experience slightly different benefits from the use of project management, a commonality to all of these value propositions is improved predictability.  The advantage of using this simple statement is that the focus of the predictability is in the eye of the beholder. For a sponsor, it is about having their project completed when they expected at a price point they had justified. For a project resource, it could be knowing what they will work on this week and feeling confident that hurdles they encounter will be appropriately escalated and addressed.

So the next time someone puts you on the spot to “sell” project management, counter with “improved predictability.” Of course, when those elevator doors open, you might be invited to deliver a more comprehensive explanation!

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