The Role of Executives in Effective Project Portfolio Management

High office teaches decision making, not substance. [It] consumes intellectual capital; it does not create it. . . . They [executives] learn how to make decisions but not what decisions to make.

—Henry A Kissinger, White House Years

Stating that executives need to be aligned with our portfolio management strategy seems intuitively obvious. But taking that from an intellectual statement to a behavior can be a challenge. If an alignment is not true, we soon find that new projects are being championed and interjected atop our current portfolio commitments and we are spending time defending a position rather than delivering on it. In this chapter, I address a natural and ideal role for executives in effective PPM as well as suggestions for enrolling them in it.

Decision maker is a natural role that an executive plays in the organization. It is a safe assumption that executives within the organization will have an impact on the portfolio. Whether formally or informally, executives will make decisions on portfolio content. Consider this scenario:

At Venturceuticals, John, the senior director of packaging, meets Bill, the executive vice president of product development, in the hallway. Bill greets him, "What's new in packaging these days?"

John replies, "Nothing much here, but I read a press release that states Xendram is introducing chewing gum as a delivery mechanism for their product, which is comparable to the function of our Quiletine product."

Bill reacts: "We can't let this happen. Xendram is always a half-step ahead of us. John, I want you to work on this capability for us. We will introduce it at the sales off-site in September. Get the formulation department to work on it with you. This is a top priority."

What just happened? Bill has made an on-the-spot decision to launch a project. Is this a good decision? What is the opinion of the chemists and the marketing department? How important is this relative to the goals of Venturceuticals right now? Where will the resources come from to do this project? What will be displaced in order to jump into this unplanned project? Bill's decision was made in a vacuum, and it may have been a poor one. Chances are good, however, that John will press ahead to fulfill Bill's request. We are accustomed to obeying the directives of senior executives, especially if we have no basis for challenging those directives. Did Bill think he did a good job? Bill prides himself on finding problems and fixing them. He walked away from the encounter smiling at his first accomplishment of the day, never to assess the impact of the project he just initiated.

Informal executive decisions typically increase the risk to achieving goals of PPM. "Piling on"—deciding or demanding that more projects be launched than can be resourced—results in lack of focus, a lower percentage of projects completed and related business objectives met, and employee exodus when the economy is good. Unlike the chance hallway encounter described, executives are fre quent targets of those in the organization who are seeking support for a new idea or their pet initiative. When an executive approves lobbied-for projects outside the process, it redirects investment of assets to special interests not necessarily in strongest alignment or in balance with the organization's strategy. When an executive gives unilateral approval to invest in a new project, she behaviorally reinforces that PPM is hers alone, ensuring future circumventions of any PPM process.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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