CHAPTER ONE Spotting Project Fog The last five years of my professional life involved completing a doctorate in project management (DPM) and exploring strategic issues related to the practice of project management in organizations. The research conducted for my thesis is the genesis of this book. As I traveled the world of project management and C-suite executives that are so critical to the process of sponsoring and executing projects, I began to recognize that both parties were frustrated with the efforts and results from the other. Project management professionals often feel distant and unconnected to the strategic management processes of their organizations. Rather than being strategic partners, they feel like a pair of hands that kick into action once a project has been selected and approved for implementation. Yet they could contribute so much more to the process if they were involved from the outset in the definition and selection of projects and worked closely with the executive team to help them realize their strategic vision. Since projects are often the building blocks of strategy execution, something that all executives should be focused on, it would seem like a natural partnership. Project managers want to ensure that their hard work matters and that what they are doing is truly strategic. Yet in my surveys, many project managers worldwide report feeling like they work on a never-ending list of projects with doubtful intentions and lack a clear strategic focus. They rarely feel connected to their executive sponsors or feel that they are on a strategic mission together towards a defined destination. This feeling of drift is not healthy for any professional. Its origins need to be examined so that organizations can address their level of motivation and engagement. Over the past twenty years there has been an unprecedented level of investment in project management, as more of the work of most organizations comes in the form of projects. Accordingly, executives have stepped up and approved investments in new resources in a wide variety of ways. This can mean funding additional dedicated PM positions or functions, such as a project management office or center of excellence. Some organizations buy, and some build, standardized project management methodologies to support consistent project management practices internally. Others have invested in online tools and other forms of automation to support PM processes in the belief that project management practices, properly implemented and executed, improve productivity and returns. However, the reality for many CEOs that I talk to is that they are not always seeing these returns clearly. In fact, there are almost as many published studies about how many strategic projects fail at huge cost to their organizations as there are articles about the success of project management practices in organizations. So all this leads to valid concerns about the value of all these PM-related investments and just exactly what the benefits are. What is really going on? I believe the answer lies in the presence in most organizations of project fog. Project fog happens when we have so many things we call projects (or initiatives, or programs), picked from an even larger list of potential concepts, approved or not over the space of many years, and now overlapping to the point where the many potential business benefits may or may not still be valuable. We lose track. We get lost. Like real fog, project fog creeps up on us and overtakes us almost unaware and before we know it, it's too late to avoid it because we're in it. Oddly, most of the organizations that I studied do not actually have a "project management problem" per se, even when they report feeling like they are in a project fog. In fact, most organizations have become pretty good at executing single and multiple projects; this is not where the problem lies. So my research focused on identifying the real underlying problem and trying to understand why executives and project managers feel the way they do. As I determined from various case studies, the origins of project fog occur well before an organization begins to execute projects, and instead relates to how projects are proposed and selected. In project management terms, this is referred to as project portfolio management (PPM)-an emerging buzzword in the profession today. However, while there is substantial discussion about this important aspect of project management, little that is definitive has been written about how to do it well, and this is both the source of and solution to the project fog. If we learn to manage the ways we propose and select projects as well as we know how to execute them, the project fog will clear up and your organization's strategic potential will improve. So let's begin.

HOW THE FOG ROLLS IN

Spotting a portfolio management process problem among my clients often begins with a simple complaint: "We have too many projects and project proposals!" (This is the salient symptom of being in the fog for most organizations.) How is it, I wondered, that these organizations were selecting and then approving so many of the same strategic projects they were now complaining about in the first place? As I discovered during research interviews, there were in effect so many forms of effort inside most organizations called a project-a program, initiative, pilot, campaign, product launch or a host of other names-that losing track of them was easy! The senior executive team obviously must think they are all "strategic" or they wouldn't be approving them, and project managers must have been consulted on the plans for them. So then who exactly is responsible for an organization having "too many projects"? Those actually proposing them or those ultimately approving them? The answer, it turns out, is both. I began to refer to this in my consulting work as "project fog," and the term seemed to really resonate. This also led to three simple questions that I pose to organizations I work with to help them determine if they might be in the fog. These questions are: 1. Are you planning the most strategic projects possible, and how do you know that as an executive team member or project manager? 2. What if the most strategic projects are not being conceived and proposed because your project selection criteria mostly encourage projects that are financially efficient versus strategically effective? 3. And what do you do if your organization's primary purpose cannot be measured in terms of profitability? How do you measure strategic contribution and connect this to project selection? Using these questions, I began to notice that the portfolio project management approaches that organizations were using to try and manage all of this effort seemed inadequate to address the true complexities of enterprise-wide project selection and management. In fact, if they had a systematic approach to project selection at all, it seemed to be one that validated simply having lots of projects! Too many projects were getting approved, and for all the wrong reasons. And then they were not managed cohesively for maximum strategic benefit. All approved projects were chasing the same limited resources available to do all the project work, so some were bound to fail. Project chaos was exhausting everyone. It became clear to me that new strategic project portfolio management practices were needed. I realized that, for all of the effort to professionalize project management, maybe we had missed a strategic underpinning of huge potential value: what if we were actually expending all this effort to execute projects that were potentially not very strategic? And what did this mean for the profession? Could avoidance of defining solutions to this problem be a lapse in professional responsibilities? Similarly, as executives or board members, what could you contribute to solving this problem and encouraging a level of partnership with project management professionals that would focus on strategy execution rather than purely on project execution? To clarify the extent of the problem, my initial research efforts focused on a few large corporations. What became immediately obvious was that their business objectives were normally related to enhancing profits. In and of itself, this is not a surprising objective, nor would most shareholders say this is inappropriate for a private sector firm. But when I looked more deeply into this challenge, it became instantly clear that if an organization's effort at project scoring, a critical aspect of picking and prioritizing projects, was based exclusively on financial efficiency, it was then sub-optimizing strategic outcomes. Why? Because the most strategic projects were unlikely to always generate the highest return. Ask any CEO and he or she will tell you honestly that innovation and creativity cost money-and that is exactly what strategic projects are all about. They are vital to long-term health but may actually cost us in the short term. (So while you can probably agree with this statement, I expect that your project selection system today likely defeats this outcome by focusing on the selection of projects with high financial returns.) This was intriguing on another front, because almost all of the organizations I studied had complex, written strategic plans, and a review of most of these would reveal fairly complex underlying business acumen. Yet few of them had non-financial measures as part of their project selection criteria, as seen in the graph below. Planning & Measuring Paradigms The shape of this...