“”When it comes to approving projects, the first question to ask should be: ‘How will this project help deliver my corporate objectives?’””
– Stick to your Knitting, Tom Peters
Way, way back in the ’80s, when companies were searching for excellence, Tom
Peters offered the advice that businesses should focus on their core competencies. “”Stick to your knitting,”” he recommended.
His guidance should be front and centre when companies are deciding where to spend their project dollars. The deadliest of project sins occurs when a company undertakes a project that should never have been started. Projects can “”stick to the knitting”” by being aligned to their companies’ strategic game plan. This is commonly referred to as portfolio management. And, as project management discipline matures, so does the business of organizing, aligning and prioritizing projects to meet corporate goals.
Project planning sprouts from the corporate planning process. Once the company agrees on its objectives for the coming year, it has essentially begun its project planning. For example, a company may identify three key objectives: (1) increasing market share by x dollars (2) cutting its operating costs by x per cent and (3) lowering risk of exposure due to disaster.
It will then determine which projects can achieve those initiatives. But here’s the rub: In order to have the right projects approved, funded and delivered, a very effective project approval process and robust project control disciplines must be in place. If you find the following clues in your company, you will have found evidence that effective portfolio management has arrived.
Clue 1. Projects are approved at the “”top of the house.”” The area of the business that is in charge of cutting operating costs is not likely the same area that would strive to increase sales. Therefore, senior executives must have objective means by which to agree on, prioritize and approve projects.
Clue 2. Project approval is a well-oiled process. Project approval or rejection is decisive, fast and painless. Once initiatives are identified, there must be an initial assessment done to determine feasibility. This is usually a two- to eight-week mini-project to determine if the project will deliver the anticipated ROI. The results would be presented to a project approval group (AKA the company’s senior management team), and the project would be given the green or red light. An agile project approval process ensures that only projects tied back to the company’s “”knitting”” plans are approved.
Clue 3. The company must use the same objective yardstick to measure all projects. Enter the project office. When the CEO of the company can drill into the status of each project underway, when he can get up-to-the-week financials and can get a one-page snapshot of the project’s health, the project office has arrived in style. How you end up in this state of project management nirvana has a lot to do with how well you implement your project office. That will be the subject of my next article on how to start up a PMO without overwhelming your project teams with change.
Robert Black is president of Project Masters Inc. and has 22 years experience working in the IT sector.