Author: Manfred Muell

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Apply a Simple Rule to Improve the Effectiveness of Your PMO

The Problem

When looking at the program / project portfolio management from our clients we often hear, “we start many projects and initiatives, but we are having trouble seeing them through to the end” as an explanation for poor performance. This means projects get kicked-off due to urgent needs and then get stuck in execution. I.e. projects fall into the “Work-in-Progress” trap.

All too often this is simply seen as a lack of discipline from the executives, rather than an organisation-wide issue. However there are a few simple governance practices and rules that can help you avoid getting stuck in the “Work-in-Progress” trap.  In order to get anything done, a project needs:

  • A clearly defined product, service or result
  • A clearly defined owner
  • A clearly defined timeline / due date
  • A realistic, approved resource budget

Our observations at clients indicate that the quality of the projects (or portfolio of projects) often is surprisingly poor, even in mature organizations. We typically identify two key issues:

  • Projects or initiatives are actually ambitions, i.e. express wishful thinking not action

(e.g. increase market-share by 3%-points, reduce cost by 100 m p.a.)

  • Projects or initiatives have very heterogeneous time horizons

(e.g. we have projects with a 2 year horizon together with projects with a 2 week time horizon)

Whilst it is obvious that ambitions cannot be projects simply because they cannot be actioned directly, the issue with heterogeneous time horizons is more intricate.

In order to get things done we need to start both the 2 year and the 2 week project, but the 2 year project remains stuck in “Work in Progress” for a long time with little progress visible. And the longer a project is stuck, the higher is the probability that new “more urgent” issues appear which compete for resources and management attention.

This means the long projects are more likely to get delayed, milestones are missed, the environment or requirements for the project change and eventually the initial purpose of the project is forgotten entirely.

 

The solution

To solve the problem of heterogeneous time horizons is actually quite simple:

As a governance rule we simply need to introduce a standard time horizon for a project or initiative (sometimes this is called “chunking”, i.e. breaking problems down into manageable chunks). In our experience a 3 month or 100 days guideline has been very successful.

This means we need to break down ALL your problems or programs into 3 month or 100 day projects and ensure that the deliverables can be produced within this 3 month period.

This allows us to plan and manage our projects in a project pipeline through the life-cycle stages (idea, plan, execute, close-out).

Then we implement a 3 month governance cycle, i.e. we review our project pipeline at least every 3 months with the understanding that once a project is approved for execution it GETS DONE, i.e. there are no interruptions through more urgent issues.

This approach has quite a number of advantages:

  • Our projects in “work-In-progress” are limited
  • We can create a project pipeline in line with existing capacity constraints
  • We can re-prioritize every 3 months if required
  • We have transparency on implementation progress at a reasonably granular level
  • People are happy when they can “tick off” tasks or projects

 

How Scientrix supports this

The Scientrix platform enables chunking and normalizing of project time horizons because users can granulate large programs using the Matrix concept.

Here is an example for a Post-Merger-Integration Program:

 

1.1

 

Behind each Matrix intersect we can now define detailed projects with a max. time horizon of 3 months and see the complete Project List:

 

1.2

 

In the Kanban (Staging-) Board we get an overview of the project pipeline and can manage according to the existing capacity constraints.

 

1.3

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Effective Leaders Need a Bird’s-Eye View

The Problem

Whether you’re a CEO, president, general manager or managing executive, your ability to consistently maintain a comprehensive view of the organization you’re leading is crucial.

It’s this bird’s-eye view that will enable you to effectively direct, guide and facilitate what’s needed to successfully strengthen and grow the business. When leaders find themselves overly engaged in a particular aspect of the business, they may lose sight of the bigger picture. Although there are times when focused attention may be necessary, a leader’s prolonged shortsightedness can weaken the momentum of a thriving organization, or worse, generate dysfunctional communications and operations.

Individual contributors, as well as managers, are required to focus on a particular project or department within an organization. It’s the leader of the organization who is responsible for setting expectations and standards for interdepartmental communications that will minimize noncooperation and maximize collaboration.

Healthy organizations have leaders who understand the connect-the-dots approach. Maintaining a full-page view allows a leader to promptly identify and understand the strong and weak links within an organization, and offer strategic direction. Your ability as a leader to dive in when you identify weak links, engage employees in recommending solutions, delegate effectively and promptly return to the helm and your bigger-picture view will allow you to continue to serve your employees and organization well.

In today’s work environment, like their employees, leaders find themselves stretched to the limit with multiple and immediate demands. Search the Internet for “behaviors leaders need to demonstrate” and the search generates more than 16 million links. In the midst of incredible pressures to perform, making it a priority to maintain overview will catapult your ability to lead effectively. (from Donna Rawaday)

The Approach (Matrix Structure)

The Scientrix™ matrix is an ideal approach to ensure overview and focus for leaders. Starting from a clear understanding of their ambition leaders can create a matrix structure that covers the landscape (big picture) and allows to prioritize and then deep-dive into the relevant focus areas. This can be done on corporate-, departmental- or team level.

Matrix-concept-Scientrix

The priority intersects in this Matrix can be granulated further to gain more insight resulting in a matrix architecture for a specific ambition.

Here are some exemplary use cases which provide the much needed overview and focus for leaders:

Revenue / Growth Matrix:

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Functional Finance Matrix:

Drive-Shareholder-Value-strategy-Scientrix-framework

Customer Experience Matrix:

Great-client-experience-strategy-Scientrix-matrix-framework

As can be seen granulating and visualizing ambitions in a matrix format is easy to understand, provides leaders with overview, helps to focus on the critical issues and reduces the fluff & noise in team conversations.

Once the landscape and the focus areas are clarified, leaders and their teams need to ideate and prioritize initiatives (projects), assign execution responsibilities and monitor progress and overall results. All this must be seamlessly linked as depicted below:

scientrix-software-capabilities

This will ensure that leaders have the bird’s-eye view on the relevant landscape and transparency on the execution progress towards their ambition.

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Managing Post Merger Integration with Scientrix

The Problem

Scholars and Management Consultants such as McKinsey, Boston Consulting, Deloitte and others estimate the rate of failure of Mergers & Acquisitions (M&A) anywhere between 50% and 80%. Some of the primary reasons for this dismal result are identified as lack of planning of the integration, limited synergy potential (not detected during the Due Diligence), problems in executing the Post Merger Integration (PMI) process, differences in management / organizational culture, etc.

This makes the decision to acquire or to merge with another company one of the riskiest decisions in Executive Management.

The Approach (Matrix Structure)

In using the Matrix logic to address this problem we first need to determine as clear as possible what is the intended objective of the merger. This is typically taken from the submission to the shareholders when asking for M&A funding. Let’s assume the objective of the merger is to achieve synergies of EUR200 Mio p.a..

Then we need to determine the X and Y Dimensions of the Matrix. In this case the X-dimension are the sources of the synergies (e.g. Revenue synergies, Material cost synergies, People synergies, etc.). The Y-dimension is simply the value chain of the combined organization (i.e. the high-level organizational functions).

In the intersects we define the main outcomes that need to be achieved by each combined function to contribute to the synergy objective.

The illustration below provides an overview:

Post-merger-integration-synergies-Scientrix-matrix

The Process

In order to avoid nasty surprises it is essential that the PMI Matrix as outlined above is already created during the Due Diligence process and is finalized and signed-off BEFORE the M&A agreement is finalized. In other words the complete Matrix with initiatives defined and KPI targets set is a key outcome of the Due Diligence process.

This Matrix clarifies the expected synergy potential and details (through the initiatives) how these potential synergies will be realized. It is also essential that the key executives of the new combined organization structure are familiar with the synergy targets and the initiatives and agree to them. After all they will need to implement these initiatives afterwards.

Once the M&A agreement is signed then it is merely about the execution of the agreed synergy initiatives. In the PMI Steering committee meetings the Matrix with its initiatives and KPI’s then servers as the main monitoring and tracking mechanism.

Organizations which are frequently involved in M&A activities can develop templates which will speed up the development of the PMI Matrices and Initiatives for each new M&A project.

Screenshots of an example

Matrix Example:

Post-merger-integration-synergies-Scientrix-matrix-framework

Example Initiative List:

Post-merger-integration-Scientrix-initiatives

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