Managing portfolios of change

Managing portfolios of change

Michael Young

Defining Change

The Changing WorldExternal• Globalisation & competition• Customer sophistication• Technological advances• Rapid change• Legal environment

Internal• Increasing complexity• Do more with less• Change weariness• Short-term focus• Generational differences

Source: Antonio Nieto-Rodriguez (2012): The Focused Organization, Gower, London

The Research Shows…$100 billion were invested in projects in the State of Victoria over the past decade without any evidence of improvement in their strategic goals

Leading organisations admit that as few as 10% of their strategies are implemented

¾ of mergers and acquisitions never pay off

Projects Success: On-time On-budget Standish

0%10%

20%30%40%50%

60%70%80%

90%100%

1994 1996 1998 2000 2002 2004 2006 2009

Successful Challenged Failed

Project governance in Australia is highly dysfunctional

Low performing organisations complete only 36% of change initiatives successfully

40% of an organisations resources are spent on strategic initiatives yet top executives pay little attention

My department has

more pressing iss

ues..

I don’t have the budget for this..

I haven’t got time for this..

P3M3 Maturity Levels

Control Governance Benefits Stakeholder Risk Financial Resource0

1

2

3

4

5

AVERAGE Project mgt Program mgt Portfolio mgt

P3M

3 M

atur

ity Le

vel

0Rqr7Sk2c0VJ7z37qQfsmR

2013 Maturity Levels – 2nd best agency


1

2

3

4

5


P3M

3 M

atur

ity Le

vel


2013 Maturity Levels – large agencies


1

2

3

4

5


P3M

3 M

atur

ity Le

vel


Deliver them well

Select the right

initiatives

The Right Initiatives

Ideation

Customers

Partners

Markets

Scans

Open Source

Business Intelligence

Competitive Intelligence

Internal Database

Staff

Idea Generation

Ideation Events

DataMining

IndividualInput

Initial Screen

andReview

Ideas Portfolio Management Idea Transition

Strategic Fit

MeetsCurrent /Future

CustomerNeeds

CompetitivePosition

Conceptof

Operations

Revenue Potential

FeasibilityandRisk

Analysisof

Alternatives

Investment CostAnd

FundingStreams

Enterprise Capabilities

BusinessPlan

VirtualPrototype

WorthinessPartner

Alignment

Opportunity Pipeline

Business Unit Pursuit

Source: Boeing Corporation

Your resource capacity

The best organisationsPfM3 - Management Control – Level 4 PfM3 - Organizational Governance – Level 5

1. Robust organizational framework for categorizinginitiatives, measuring and monitoringorganizational performance, and measuringcontribution from portfolio

1. Governance of investment management hasmoved from a programme/project-centricprocess to organization-centric

3. High-level reports on key aspects of portfoliomade available to Executive Board to supportinformed decision-making

4. Prioritization within portfolio based on priority ofstrategic objectives

6. High levels of operational engagement withdecision-making and direction of portfolio

5. Executive Board has clear accountability forstability of the organization and activelymanages portfolio to ensure sustainability andrealization of strategic objectives

7. Decision-making based on maintainingalignment and balance within portfolio,and its optimal configuration, to achievestrategic objectives

6. Organization proactively enables, supports andachieves business process improvement

9. Trend reporting on progress, actual andprojected cost, level of risk, and initiative andstakeholder confidence, are routinely collected,reviewed by Executive Board and used fordecision-making

10. Quantitative and qualitative measures andlessons identified are routinely used to improveeffectiveness of portfolio management

IT Investment process (2011->2012 from $50Mpa -> $27M pa)

The theory … The practice …

‘decibel-driven’ processesMore productive and inclusive

Australia

Employment projects

Schools projects

Early childhood projects

Help …

Key Changes

From ‘tunnel to funnel’– Concept Definitions (3p)– Detailed Proposals ($20k-50k)– logic needed to cull earlier in

the process• Analysis

– 4R, 6Q Governance

2 template changes• ValIT Categorisation vs ‘Essential’

1. Doing better things2. Doing more things3. Doing things better4. Keeping our promise5. Keeping lights on6. Keeping our job

• Value Risk Assessment (Existing)– Policy– Strategy– Savings– Risk

Timing 2012-13Cluster Employmentinvestment category (Multiple Items)Value AssessmentCount of cost pa Column Labels

Row Labels

Policy Strategy Savings Risk

Grand Totalimplement govt policy 3 3

support govt policy - clear & measurable benefits 2 2

support govt policy - intangible benefits only 4 4

No clear linkage to govt policy 1 1

implement dept strategysupport dept strategy - clear & measurable benefits 6 6

support dept strategy - intangible benefits only 1 1

No clear linkage to dept strategyROI > 200%ROI > 150%, <200%ROI > 100%, <150%ROI > 0%, <100% 2 2

no ROIwill reduce dept risk rated High or Extremewill reduce op risk rated High or Extremehelp reduce dept risk rated High or Extreme 1 1

will reduce dept risk rated Moderate or Low 1 1

help reduce dept risk rated Moderate or Lowhelp reduce op risk rated Moderate or LowNo linkage to risksGrand Total 10 7 2 2 21

Timing 2012-13Cluster Employment unaligned:

Alignment with investment priorities45% 26% 6% 19% 3%

Count of cost pa Column Labels

Row Labels

Policy Strategy Savings Risk

#VA

LUE!

Gra

nd T

otal

0 1 11. Doing New Things (Transform) 0%2. Doing more things (Grow) 2 1 3 10%3. Doing things better (Enhance) 8 6 2 2 18 58%4. Keeping our promise (Compliance) 4 1 5 16%5. Keep lights on (Core) 1 3 4 13%(blank)Grand Total 14 8 2 6 1 31

Head of Projects

Key Take-Aways

• Change’s are a significant investment – treat them as such• Understand and develop your organisation’s change

delivery capability• Prioritise! You cant do everything.• Create and reinforce a delivery culture• Don’t kill your change initiatives by under-resourcing them• Project sponsorship and governance are core skills for

executives• Stop initiatives that no-longer deliver any benefit

Got a question?

0411 243 [email protected]

www.transformed.com.au