Enterprise Navigator

Controlling Operational Trajectory: Management Beyond Financials

This post reminds me of my childhood years as an overly-inquisitive and under-supervised twelve-year old with a proclivity for blowing things up. Now I know what you're thinking… "Every 12 year old boy has an appetite for that." Perhaps so, but I also had access. In retrospect, how enough little boys ever survive their own idiocy to propagate the human race is one of those amazing feats of nature; much like the way a few turtle hatchlings escape frigate birds as they scramble for the sea. By all rights, I should be minus at least one eye and some fingers.

Moving on…

This week we announced some powerful new features that are part of our new 10.1 release of Planview Enterprise. I will leave it to more appropriate vehicles to detail all of the new capabilities in this version, but there is one particularly significant element that bears further discussion, regardless of the tools you are using.

Although controlling money is arguably the most important management lever that you have, it is far from being the only one. In Taming Change, we define operational planning as the process of assessing performance, setting strategy, and managing human and financial resources. The interaction and information needed to analyze market and economic influences, determine product direction, shape new ideas into tangible opportunities and distribute enabling organizational capacities goes far beyond the ubiquitous annual budgeting exercise.

Operational planning does nothing less than set the future trajectory of your organization. Money is like organizational rocket fuel; you certainly want to use it efficiently and monitor its consumption, but it is just a means to a greater end. Somewhere, someone needs to be prepping the payload, setting a destination and controlling the flight. Otherwise you will simply waste fuel, accomplish nothing of value and end up somewhere other than where you intended.

In much the same way that early rockets were simply loaded with fuel and pointed in a general direction, some organizations still primarily manage their future by manipulating the budget. In both instances, the result is most often a lot of smoke, heat, noise and motion, but probably not expected results. Today, we plan the initiative and use sophisticated telemetry and guidance systems to ensure that we reach our intended target and achieve a specific goal. Fuel is only one consideration of the overall mission.

Effective, operational planning incorporates all of the information necessary to make wholly informed decisions by considering a number of different organizational perspectives. So, as you support how your organization sets its own trajectory, be careful that you don't lose an eye in the process -- you might end up taking a myopic approach that misses the target.

Be sure to check out how we are enabling organizations to do operational planning; I can safely say that it is unlike anything else on the market right now and a significant improvement over drowning in spreadsheets.

Taming Change Excerpt -- Just Where Does All of Your Resource Capacity Really Go?

Doesn't it seem incredulous (especially to your customers) that despite all of the staff you have in your organization, there always seems to be a shortage of people for project work? Or worse yet, those that are given project tasks are often unavailable just when they are needed to keep critical path on track.

So, just how much capacity really is available to innovate, compared to keeping the wheels on the operational wagon? This excerpt from Taming Change with Portfolio Management (shipping to book stores in June) offers you an idea of what actual capacity utilization analysis typically reveals. It also helps explain why using common availability assumptions may have some of you working sixty hours a week.

Understanding Total Capacity Utilization -- Where Does It Go?

Analyzing true staff capacity can yield surprising results compared to common utilization perceptions and assumptions. As an example, a staff of 500 can be broken down as follows (all values listed are typical approximations): Typical Staff Head Count by Type Count Staff Position 10 Department heads and executives 15 Administrative support and other non-technical staff 10 Senior managers 30 Resource managers (average team size is 15 members) 435 Individual contributors (including project managers)

For the 435 individual contributors, work availability breaks down as follows (in hours): Number of Hours   Work Availability 904,800   Total possible working hours (435 staff @ 40 hrs/week x 52 weeks) -87,000   Absence (vacation, holidays, illness, etc.; avg. 25 days/year per head count) -81,780   Non-work activities (general staff meetings, training, etc.; avg. 1/2 day per week) -27,144   3% annual attrition rate (lost effort and time spent training new staff) -141,900   80% efficiency factor (actually doing work vs. breaks, personal phone calls, etc.) 567,100   Total available productive hours remaining

Given the 567,100 potential hours of effort remaining to accomplish deliverables, the following reflects typical effort utilization by general work type: Hours   Work Type 283,550 hrs:   (50%) Base services (routine ongoing operations, level-of-effort service delivery) 56,700 hrs:   (10%) Resolution of emergent (unplanned) issues 113,400 hrs:   (20%) Other planned work (informal projects and unique assignments) 113,400 hrs:   (20%) Available to plan and execute formal projects Thus, the typical net effective head count available for formal project work is only about 55 FTEs of the total 500-person workforce, or about 12 percent of the total staff effort available. In practical planning terms, this is enough effort to execute about a dozen medium-sized projects. While this analysis uses general assumptions, they are useful as working numbers until you can measure and analyze your own specific circumstances. You should be able to provide a reliable breakdown of net capacity by work type based on actual historical results to make accurate future forecasts and estimates.

Does Methodology Matter? Turn to Fashion for the Answer

Regarding PMI's monthly journal PM Network, this may stun some of you, but I generally do not devour it cover-to-cover. After a decade or so, I find that most special interest magazines start to repeat themselves. I usually scan the table of contents and quickly flip through it to size up the marketing budgets and skills of the advertisers.

However, a teaser on the January 2010 cover caught my attention and I immediately went on safari for the matching article on page 27 -- a one-page commentary by Jesse Fewell; "The Great Debate," subtitled, "It may seem like blasphemy, but methodology doesn't matter." By all means, read the article, but I want to continue the larger conversation.

Jesse and I firmly agree that methodology does not matter. But, why not? The article doesn't elaborate on that point. To answer, we have to first look to what a methodology is. Michael Hanford (whom I consider among the more brilliant of the Gartner analyst ranks), offers the following in a review of the new Prince2 update (also a great read -- ID Number: G00172256, dated 13 January 2010):

"Methodologies are a body of practices that prescribe an ordering of work within a discipline, while "best practices" describe successful or well-used work approaches. One view is that methodologies are adopted by organizations, while best practices are adopted by individuals."

In my experience, when organizations wholly subscribe to and adopt methodologies, they tend to breed zealots. Zealots get myopic and then other options and approaches start to get branded as 'wrong' rather than 'different.' Zealots are dangerous; that's how wars start.

This is where the world of fashion comes in to play. (What has Bravo and a house full of women done to me?) Like a good suit, methodologies seldom fit as they come off the rack -- they have to be tailored. Methodologies represent a general set of practices that must be applied to the context of a specific circumstance. They are also subject to interdependencies with other disciplines that are outside of their own scope (in other words, incomplete). As a result, all of them have to be adapted before they can be adopted.

Methodologies are like fashion lines. Even the most snobbish avoid limiting their wardrobe to the work of a single designer. Preferences are fine, but some situations call for Versace and some days you just need Ralph Lauren. Why on earth would you limit yourself exclusively to considering any one methodology? Mix and match -- it is OK to carry a Coach bag while wearing a DKNY blouse (however, no matter what you see on the red carpet, Armani with Converse is NOT OK).

Finally, like designers, any single methodology is probably lacking some essentials that make up a complete wardrobe; case in point, adopting ITIL exclusively without a good project management foundation is the equivalent of going out in your LBD without… well, um, let's just say certain prerequisites, and leave it at that.

Given the Texas weather, I am a big fan of the layered look; perhaps a basic process foundation, with a casual PMI jacket, and some Val IT accessories. Maybe I'll toss on a bit of agile if I'm feeling especially pretty.

OK, you get the idea -- methodologies matter about like fashion magazines matter. They are useful to browse while getting a pedicure or to glean ideas from, but let's face it folks, most organizations just don't have the body to pull off a closet full of Lean. Build a wardrobe of functional and comfortable options, and pull together an outfit that is age and occasion appropriate.

Economics Caused Executives to Shift Gears in 2009

Here is a link to a good article by the ever-prolific and thoughtful Linda Tucci, for SearchCIO: Tactical decisions outweighed IT strategic planning for CIOs in 2009. In addition to being a well-written piece, it contains some numbers you can add to your list of informal benchmarks. The gist of the article is likely no big surprise; 'when money gets tight, you curtail discretionary spend.' It's like reducing the number of Friday movie nights at the Super 14 Cinemaplex, in favor of more DVD rentals and a bag of Pop-Secret when you tighten the household belt.

What this article illustrates however, is the importance of being able to see and respond to changes as they surface, not just for the CIO, but across the whole organization. So, what role should the PMO play in maintaining situational awareness? I contend that the PMO has a unique vantage point that allows it to spot certain emerging changes that others may not be able to see.

As a part of the organization that is usually sandwiched between the executive and working levels, the PMO is well-positioned to identify and alleviate disconnects between the two. The PMO also operates across organizational silos, enabling it to identify coordination issues between groups or departments. The PMO is also usually the broker of performance information; as a result, its analysis should be the first line of defense in identifying emerging trends.

Going back to Linda's story, the PMO also plays a significant role in how the organization responds to changes; deciding to pull back on strategic initiatives is one thing; reallocating resources, shifting tactical priorities around, and generally rearranging the furniture is another. Intent has to be translated into action.

It's just something to think about -- is your PMO actively posting lookouts as part of navigating the enterprise, or are you simply waiting to respond after you run aground?

Business Management Practices: Out with the Old, In with the New

So here we are, on the threshold of the first year of a new decade.

Wow, that was fast.

Yes folks, that new car smell may have already faded from the 21st century, but the tires and upholstery are still in pretty good shape. Let's change the oil and move on.

As I loudly sang 'Auld Lang Syne' the other night, I found myself nagged by the fact that I still had no idea what that meant.  If you believe everything you read on Wikipedia, the phrase is interchangeable with 'once upon a time,' or alternatively, 'a long time ago in a galaxy far, far, away…' Nevertheless, let us take stock in what the last decade provided us in business management terms, and prognosticate what we have to look forward to.

Retrospect

We began 2000 with an immediate sigh of relief that the technological world did not screech to an abrupt halt and ended 2009 thankful that the world economy didn't either (so far). Perhaps history books will characterize the recession as Y2.1K.

In between, we commoditized and became wholly dependent upon computer technology. We quickly shed our dial-up accounts for broadband. Then we globalized business and as a result, we transferred a massive amount of wealth from one side of the globe to the other.

As the world got flat so did our TV and monitor screens. The personal computing capability that we began the decade with is now in our pockets. We are now virtual, on-demand and real time. We de-regulated, re-regulated, de-regulated some more and are now re-regulating (Remember SOX?).  We also transitioned from data warehousing to performance management. We traded in 1.44 megabyte floppy disks for 256 gigabyte thumb drives, and quit folding maps in favor of GPS. We went from socializing to social media.

In many respects, the last decade saw the rise and fall of project management; the practice was in its heyday though most of the decade, but it too is now increasingly being treated as a commoditized skill set in favor of asking bigger questions, such as "Why are we doing this?" I could have just as easily themed this post as "out with the tactical, in with the strategic," eh?

Circumspect

For all of the technological advances and changes of the last ten years, many of the top business management issues remain remarkably consistent. These include compliance, governance, organizational alignment, prioritization, communications, information and knowledge management, performance management and resource and demand management. In other words, even though the airframe of business is now fly-by-wire, it seems our piloting skills are not quite keeping up.

Prospect

So, what lies before us in this, the coming decade? From a business management and PMO perspective, I predict…

1. Cross-functional business integration will become a key consideration for managing the continued onslaught of change as a seamless series of routine events.
2. This will drive continued end-user transparency between different applications and platforms, ultimately merging them into a single super-system.
3. The PMO as we understand it will be known by another term. It will be institutionalized as an integral part of the corporate organization structure. It will own business integration and manage the associated system(s) and information.
4. Eventually, this function will merge with IS, finance and HR to provide overarching corporate systems information, automation and coordination.

Disclaimer: This assumes the Mayan calendar has been wildly misinterpreted by Hollywood.

If we do not at least partially accomplish these items, then the top business issues in 2020 will include: compliance, governance, organizational alignment, prioritization, communications, information and knowledge management, performance management and resource and demand management. Again.

And surely you'll buy your pint cup!
And surely I'll buy mine!
And we'll take a cup o' kindness yet,
for auld lang syne.