Modernize portfolio management with hybrid strategy

This is an excerpt from our whitepaper “Survival of the strategist”. Got to the bottom to download the whitepaper.

Time for change

The only constant is change. The world is always in flux and organizations must evolve to keep up. Maybe this is obvious but looking at PMO’s it becomes less obvious. Few PMO’s are changing. Even fewer are leading these changes. Most are barely holding on, running after new developments that are actually already outdated.

The traditional role of PMO and Portfolio Managers has been to adjust processes, to focus on optimization and doing things in the right way. In today’s world this means becoming more adaptable than ever as the world turns to asynchronous and distributed ways of working. Across the globe people work on the same projects, at different times with their own cultures, foci, and best practices. It’s impossible to keep up with every detail of every project, and, in reality, there is no need. 

The modern PMO and Portfolio Managers create new visions for the organization. They don’t respond to change. They lead it.

The only way to do this is with data. Become a data-driven office. Data provides bigger, clearer patterns than what one person or a team can analyze and extract from the organization. Being driven by data also means changing the role of the PMO. Today’s Portfolio Management is not just about managing the day-to-day workflows or tinkering with strategy but includes the courage to lead the organization into new successful ventures. It’s less about doing things the right way and more about doing the right thing – but also doing it faster than the competitors.

In this paper, we’ll cover ways to become an effective data-driven Portfolio Manager for the modern organization and provide tools for efficient portfolio management that doesn’t lag behind new change but takes charge in creating strategies that pay off – with stronger results than ever. 

The PMO used to mean Project Management Office, but today some organizations find themselves without any projects at all! Instead, people turn to other descriptions of their work, like initiatives, epics and similar.

What happens to the Project Management Office if there are no projects to manage?

It doesn’t matter what we call it. It’s work that needs to be done, to be planned and executed, and reported on. That work might be a project or a program, an initiative, or even a team that is funded to handle a specific part of the work. At the core of this, is the people who do the actual work.

None of these people go to work to please the PMO. In fact, it’s the complete opposite; the PMO exists for them.

It is the job of the PMO to remove roadblocks and support the organization in achieving its goals – no matter the department, project, or team.

The challenge of hybrid

The challenge of the hybrid organization is to communicate strategy and then create space for existing beneficial workflows. At the same time, the good Portfolio Manager will stay plugged in gathering data and information to drive the organization forward.

The risk is that these decisions and strategies become disjointed from the rest of the corporation, i.e. the teams and employees actually carrying out the projects and tasks on a day-to-day level. Strategies and planning happen at a top corporate level and then the message is trickled down to the rest of the organization. 

Even the most well-thought-out strategy can appear vague or disjointed from the actual work in the teams. 

There is an issue in top-down communication.

Similarly, there is an issue in the bottom-up communication.

The project teams will be focused on the most urgent tasks, but it becomes difficult for the individual to communicate this on a corporate level. The data doesn’t actually show where people are spending their time or why.

Good portfolio management bridges the gap between strategy and implementation.

When designing a solution that can connect strategy to work it’s all about figuring out what data we need and how to collect it. This should be automated. The days of PMOs controlling and following up on unnecessary details in every project are in the past.

The PMO no longer pushes methods onto the organization but looks one step ahead and clears the road. The PMO is, essentially, a support for the organization. It shouldn’t slow people down by demanding data and specific ways of working, but clear roadblocks and ensure that an organization can produce good work while still leveraging its project selection and execution successfully.

Objectives and Key Results for the Hybrid Organization

Becoming aware of hybrid portfolio management brings the challenge of combining and connecting different methodologies inside the same strategy. An agile team will struggle to align their workflow with a waterfall or stage-gate team, yet they still work within the same organization, or maybe even within the same portfolio. The solution is to use OKRs to disseminate a coherent, straightforward goal that people can orient themselves towards.

OKR is short for Objectives and Key Results. It is a collaborative goal-setting framework used by teams or individuals to set ambitious goals that are measurable.

The main philosophy allows any person or team to connect directly into the strategy and be part of executing and delivering on those goals. It’s about tracking progress and encouraging engagement throughout the organization.

OKR overview

Objectives are often connected to your vision or your mission, something like achieving amazing revenue growth. The objectives are limited and easily summed up; they should be easy to communicate and something everyone in the organization can be proud of achieving. From the objective one or two key results are formed.

The key results show when the objective has been achieved; it must be measurable, a number, a percentage, or a monetary value. The baseline is noted so that we have something to compare the target to. It should be easily tracked in a transparent way.

An owner is assigned to each key result and a tracking frequency is defined.

So, if the objective is to achieve amazing revenue growth, then key results could be, “close 1 mio. in new deals” or “Win 40 new customers in APAC”.

We might note that we currently have 5 customers in APAC and wish to increase this, with a weekly tracking frequency until the end of the parent-objective.

The key results are then translated into your initiatives, that is the projects that are run in the departments or teams. Here there is a person driving the initiative, e.g., a project manager who has full ownership of creating the schedules as well as progress tracking and status indicators. These initiatives are then linked back to the key results.

The strength of using OKRs

Many businesses already have some element of tracking, such as KPI’s. A typical KPI might be to minimize employee sick days. Rather than a project or initiative to support this, it is focused on several processes, such as tracking hours with a timesheet tool each week. 

OKRs focus on new initiatives that create a common vision and meaning across the organization. 

KPI’s are focused on business as usual, and while important it’s less valuable within a PMO-setting. OKRs are an opportunity for the organization to push themselves and measure themselves against bold objectives.

The difference between KPIs and OKRs

Difference between KPIs and OKRs

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