Enterprise Navigator

Whether It's the Moon, Mars or New Markets, Vision Needs a Destination

Someone recently shared an interesting report from National Public Radio regarding the recent NASA budget hearings on Capitol Hill. Included in it was this fascinating exchange between Senator David Vitter of Louisiana and NASA administrator Charles Bolden:

"Somebody once told me a vision without resources is a hallucination," said Bolden. "If you look at where we were prior to the 2011 budget, we were living a hallucination."

But Vitter didn't find that convincing. "If vision without resources is a hallucination," he said, "resources without vision is a waste of time and money. And that's what I think this budget represents."

No doubt some version of this discussion is routinely re-enacted in board rooms around the world. Operational planning is all about enabling your vision. But, it is predicated upon a big assumption -- to be useful, that vision needs to represent getting to some future place as an organization. Too often, this basic premise can be a challenge.

Sure, someone may indeed have a grand plan, but does it constitute a clear destination or simply a loosely defined continuation of the journey? Consider a family trip to further illustrate the point:

"Come on kids, hop in the car!" "Where are we going Daddy?" "West. We're going west… and maybe a little north. Our goal is to get at least 25 miles per gallon, and to cover 500 miles a day." "But where are we GOING?" "Ah, don't worry about that, we'll know when we get there. The key is to make progress and get there efficiently."

In the case of NASA, it is a matter of convincingly defining its future objectives and strategies in the post-shuttle era as an inherent aspect of acquiring funding. The Constellation program had set its sights as returning to the Moon, but was under-funded. Now, Bolden is hinting towards Mars, but even he concedes he isn't sure how we will get there or what it will take.

For a corporation, such reconciliation is usually more pragmatic. In addition to being able to articulate in actionable terms where you want to be in 3, 5 or 7 years, you also have to assess if you can practically get there. It's all about defining your markets, producing the right products, and managing your capacities.

So, the key take-away is to make sure your operational planning process sets clear objectives, defines achievable strategy and allocates the needed funding and resources. Make it tangible; explain it in terms that establish why you would want to go there, and how it will be done. Then you can percolate it through the ranks to truly make your vision a commonly shared goal, and not just some hallucination.

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.

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?

Tales of Cliff Diving, Constructive Procrastination and Risk Avoidance

I was on an advisory call recently with the CIO of a well-known furniture manufacturer and retailer. The topic dú Jour was best practices for project selection and investment decisions. While we covered a lot of different considerations, one area that really resonated with him was how to better manage the uncertainties and sometimes wild ROI claims that accompany new project requests.

Many of the organizations that we come in contact with do not do a great job of controlling the execution risk of their initiatives, despite the fact that they often have a lot of management flexibility to defer or eliminate a good portion of it. Investment decisions need not be a binary, all-or-nothing event.

There is no greater period of uncertainty around a project, program or strategy than at its point of initiation. Even though preliminary analysis may further validate the merits and costs of a proposed opportunity, most of the unknowns remain unknown when a decision is made on whether to initially proceed. When it comes to taking control of risk, the question on whether to proceed should always include a keen consideration for 'how far.'

We have all witnessed a governance committee or a single executive make a substantial up-front commitment of time, money and resources to an endeavor, even though there is significant doubt about the outcome. Such decisions can seem like stepping off a cliff, trusting that wings will somehow sprout during the fall. Often times the reasoning is that it is important to reach the destination below quickly.

(This reminds me of an old joke about watching a person repeatedly climb to the top of a tall staircase, only to violently fling himself backwards and tumble back down the stairs. When asked why he was doing this, he replied, "Because it feels so good when I finally land at the bottom.")

The point is, sometimes it makes a lot of sense to climb a bit down the side of mountain to get a closer look at the valley before committing with the drama of a 'Thelma and Louise' move. These concepts are effectively illustrated in a book I am currently digesting, Project Valuation Using Real Options, by Dr. Prasad Kodukula and Chandra Papudesu. (In many ways, the heavy statistics and math featured in this book make it the 'Anti-Maverick' approach when compared to Audry Apfel's suggestion of downplaying financial metrics in project selection that was highlighted my March 4th post. However, when consumed together, they offer a splendid 'point-counter point' debate.)

The Real Options approach to managing risk and uncertainty with calculation-based analysis may not always be the most appropriate mechanism or your particular cup of tea, but the underlying message is universally applicable: manage uncertainty and risk by applying a graduated method to making commitments. Such iterations can often be effectively applied using a qualitative approach as well -- it just takes some critical thought.

For example, let's say you are considering a somewhat risky project to implement a new and untested business application that is estimated to cost $5 million to design, develop and deploy. Why, why, why(!) would you ever commit to the total cost up front? What can be done to structure an initiative so that the bulk of the risk is mitigated before most of the money is sunk? Catalog the major risks as part of the initial analysis; consider the WBS and overall timeline, mapping when each significant risk can be eliminated or reduced. Look for ways to move up key activities to eliminate risk earlier in the project. Defer as much of the expense as long as possible while working feverishly to remove as many unknowns from the equation as soon as possible. Build in gate reviews at each milestone to formally reassess progress and risks and the decision to proceed. At each point, you will reach a higher level of confidence in the probability of the outcome and can decide whether to commit additional funding for the next phase. If it becomes a good idea gone bad, then you have successfully minimized sunk costs.

It's called active governance.

I know the urge to take that one great leap into the air may seem enticing -- "Why, what an exhilarating feeling! It's as if I could fly!" But eventually gravity and the laws of terminal velocity will have their way with you. Better to plot a potential path and climb down the side of the cliff; it's more work and perhaps a less rapid descent, but it is controlled. At least if you get stuck or begin to realize you are heading somewhere you don't want to be, you can always choose to climb back out. It sure beats drilling into the floor of the canyon that time forgot -- besides, you always have the option to jump the rest of the way down once you can verify a safe landing.

I Can't Tell You What Business Value Is, But I Know It When I See It

(…with all due apologies to Justice Stewart)

Lately I've been revisiting some content on benefit realization, thinking about the investment analysis process in general, and mulling over different approaches to making business decisions. As part of that, I reviewed a lengthy but interesting paper from Audrey Apfel of Gartner, titled, "A Maverick Approach to the Business Value of IT" (G00157347, dated 29 April 2008). While the paper was directed specifically at IT, many of the points she makes are more broadly applicable.

The common thread of all the aforementioned subjects is that defining value is much more elusive than defining costs, whether planning for them, forecasting outcomes or measuring the actual results. It is a good day when you have an initiative that has unambiguous linkage to quantifiable revenue generation, but those days can seem few and far between.

The key take-aways I got out of Audrey's work was:

• It is almost impossible to effectively and accurately convert all potential benefits to hard dollar values, and financials alone don't tell the whole story
• There are too many unknowns and variables to make an accurate up-front assessment
• Ultimately the value of any undertaking is substantially shaped by perceptions rather than by more objective measures
• Perceptions and objective measures often have strong correlations anyway…
• …so why not assess perceptions when it comes to determining potential and actual value?

Let me be quick to say that your take on the 18 pages may yield different results; closed course, professional driver, etc., etc. I never claimed to be an 'A' student.

Uh oh -- now I have that song stuck in my head; "don't know much about his-tor-y, don't know much about geog-ra-phy…"

Audrey offers an interesting (if somewhat jaded) view of current corporate valuation techniques, in that sometimes executives will send those doing valuation assessments back to the well until they arrive at the pre-conceived value that sponsors have in mind anyway. My question to you is, do you see that happen in your corner of the world?

Regardless, the underlying theme is clear, whether prioritizing work, making investment comparisons or measuring results, it sometimes takes a combination of subjective and objective considerations to measure business value; yet another example of the juncture between science and art along the highway of business management -- it's a craft, not a software application.

Don't calculate proposed initiatives to death with overly sophisticated and labor-intensive financial measures exclusively; they are probably fictitious numbers in the final analysis (literally), and could shorten your lifespan from sheer frustration. Make some room for a controlled mechanism to measure gut feel; whether you call it a Perception Index as Audrey does, or term it as the Right Lobe Wobble Factor, subjective assessments are a viable sanity check of the basic ROI/NPV/IRR math. If the two elements end up at opposing points on the value spectrum, that is cause for further rumination.

"…but I do know that I love you, and I know that if you love me too, what a wonderful world it would be…"

Down Economy PMO Survival Guide: Five Actions You Should Be Taking Now

I'm not even going to try and wax philosophical about the current market -- there are plenty of others doing that and it is well past the point of finding any humor in it. It is what it is, and while the pundits banter about what 'it' is, the one thing we all know for sure is that it is getting pretty dicey out there for many organizations.

The whole situation can be quite depressing unless you put the nightly news in context; the most sensational failures, pessimistic guests and worrisome statistics are going to grab the headlines -- misery sells. But just like in politics, there are only local economics; some verticals are faring better than others, and many businesses are weathering the storm OK… so far. Nonetheless, even among the fortunate it pays to be realistic and assume that significant impacts are looming. I think it is a safe bet to say that any reasonably managed organization either already has, or is in the middle of creating contingency plans for several different and mostly negative long term scenarios.

As a result, even successful PMOs might find themselves between the stadia lines of the hidden cost control snipers that are scanning the horizon for likely targets. With that in mind, I thought it might be useful to discuss the measures that the PMO should already be taking to proactively support in-progress or potential future cost containment moves, even if you haven't been asked. Should some sniper start pulling the trigger, doing these things now just might help save your bacon, instead of them becoming your last act of defiance.

1. Make sure the leadership team has a clear view of what is going on. Managers need to know where Point A is, should they have to figure out how to get to Point B, as in Bummer. If your current report battery does not yet have work classified or graded by what is discretionary, mandatory or base work activities, make sure you have appropriate categories defined and work accurately flagged. Similarly, if not already done, now is the time to start looking at how that work lines up by market, product or service line, or similar dimensions appropriate to your environment and scope. Summarize the financial and resource capacities being consumed in each category and get it in front of the executive team, and be prepared to deliver supporting details on demand.
   
   
2. Identify what is the minimum required to keep the organization functional. This is when it pays to be a PMO that looks at ongoing operations as well as project portfolios. Assume that funding for transformational work is going to dry up for all but the most critical projects. This means that the leadership will turn their focus on what is left and how to conserve expenses further. Assess what it takes to just run the business as-is and nothing else, should the organization have to tread water a few quarters. If the storm worsens, map headcount and work activities further to denote scenarios for cutting first into the meat, and then to the bone.
   
   
3. Identify cost reduction opportunities and implications. With last weeks post in mind, do not forget that the PMO has a unique cross-functional perspective of the organization that is unlike any other. This is allows you to see things that others can't. Take the initiative to objectively assess the organization from your vantage point and offer any meaningful thoughts on how the belt might be tightened. The PMO is also in an excellent position to identify the possible consequences of any cost saving measures that either you or others uncover. Volunteer your analytical capabilities to the cause.
   
   
4. Get staffing and utilization information up-to-date and in the right hands. Resource costs make up the majority of spending in a knowledge worker environment, either directly as salary and benefits, or indirectly in supporting infrastructure and services that the staff needs to function. Sadly, as the unemployment figures bear out every month, people are bound to be affected as part of any significant cost control measures. Help the leadership team make these unbelievably difficult decisions wisely by making sure they understand how to best reduce the workforce with a least impact on operations. Leverage your insights into how staff is being used to identify critical skill sets required to maintain core functions viable, key resources that would be difficult to replace, and flag the areas where reductions can be made with minimum long term effects.
   
   
5. Identify & communicate the minimum operating requirements of the PMO. If you are successful at doing items 1 through 4, you will again remind the leadership team why they need the PMO to begin with. Regardless, if things break bad, the PMO will be impacted just like the rest of the organization, so be prepared when you see the train coming down your track. Start thinking now about what will be required in the PMO should some version of a worst case scenario eventually play out. Formulate options and the business case to negotiate something other than total disbandment and have these discussions with your sponsors well before decisions must be made. Here is your argument:
   
   There is a lot to be said for being able to maintain continuity of PMO assets and functions, even when greatly scaled back, rather than having to reinvent the wheel from scratch a year or two later while on the road to recovery. Prepare a list of critical services that the PMO can provide to help keep things operational in a lean environment, as well as how the PMO will speed up the bounce back -- being the first mover coming out of a recession has historically proven to be one of the greatest advantages a business can have. This means that all of the processes and infrastructure you have painstakingly put in place will need to be ready to rock when the arrow starts pointing up again. It is unlikely that a new manager tasked to restart the PMO 18 months from now will embrace past systems, tools and processes -- without PMO continuity, you lose the knowledge base as well as the ability to your keep management assets maintained in a functional state. In the end, it will cost far more in lost opportunity and PMO rework than the additional savings of cutting a few headcount.

Reverse Engineering Your Reality

Let's see if I can't get back on my game here a little better today. We are back from a worthwhile event in Chicago at CampIT, where over a hundred professionals gathered to spend a day focused on the intricacies of IT PPM. We had some insightful presentations and lots of great follow up discussions with a very engaged group of participants.

But the 60 degree temperature swing between there and Austin did nothing to help shake a nagging cold that is starting to impede my normally ebullient attitude. There is nothing quite like flying with a congested head -- not even tried and true submariner tricks for equalizing ear pressure worked, and I am still dealing with intermittent reception on the starboard side. To top it off, the collapsible handle on my favorite rolling computer bag blew out. Ah, the glamour of business travel.

Back to the topic at hand. The speaker that followed my opening presentation, Michael Menard of The Gensight Group, said something that caught my one good ear and triggered this post. Michael was discussing prioritization of the project portfolio and early on made a bold and nearly profound observation that I will loosely relate as best as my Sudafed-soaked memory allows: it is not mandatory that you have a defined strategy to guide the project portfolio -- the contents of the portfolio itself defines what your strategy is.

How true.

It immediately reminded me of a similar point that we make in our best practices for Application Portfolio Management. When talking about aligning applications to architectural standards, we indicate that if you do not have such standards formally established, then the applications you have serve to create a set of de facto baseline standards for what your current state architecture is. Once you reverse engineer your existing standards from them, you can then adjust those standards to guide future changes in application architecture direction.

Everywhere we look, we see examples of how the realities of our organization effectively reflect back to us who and what we really are, regardless of what might be otherwise stated in some obscure document. Back to Michael's point, even if we have a strategic plan, how we really expend our capacities is ultimately the true measure of our strategic direction. Similarly, how the organization acts day-to-day to achieve certain outcomes is what defines current processes, not boxes and lines on a flowchart. Finally, on an individual level, how we spend the majority of our time every week constitutes our job description. This is a distant cousin to, "You are what you eat." Along those same lines, I believe it was Forrest Gump who quoted his mother as saying, "Stupid is as stupid does."

So, with all this in mind, it occurs to me that this whole idea can be put to practical use as an exercise in self-checking. For example, when faced with a situation that Michael describes where the project portfolio is comprised of projects that were approved without benefit of an overarching strategic plan, there is some benefit to reverse engineering what the imputed strategic direction is. The result might be, "do a lot of really risky internal improvements" or, "approve only the requests from the business unit that makes the most revenue."

Boiling things down to their as-found state and categorizing them based on their attributes brings some factual illumination to how things really are compared to internal perceptions or intentions. If there is a mismatch, then you have a basis for making improvements and changing your reality.

Putting the Planning Horizon to Work

In my previous entry, "Onward Through the Fog", I introduced the concept of the planning horizon. I could have extended that one quite a bit more, but it was getting pretty long in the tooth as it was, so I had to stop. I'm struggling a bit reconciling the whole, "it's a blog not a novel" thing.

However, there is one important aspect that I want to follow-up on while the topic is fresh and before I head off on family vacation. Otherwise, I will undoubtedly forget about it. (See, I've been putting off a two thousand mile driving trip until the price of premium gas got high enough. The Beast only gets about 21 mpg at best, and only if we are going 45 mph downhill with a stiff tailwind. Oh Joy.)

But I digress.

So, if the idea of employing the planning horizon concept on a daily basis seemed a bit esoteric to you, allow me to ground it with some real world perspectives and create some incentive we can all appreciate — less work.

Lessons from the University of Hard Knocks

The hardest lesson for me to get my head around when learning how to manage a dynamic knowledge worker environment was the impact of not respecting the planning horizon. When I inherited work management for the engineering group, I was coming in from a background of planning and managing nuclear refueling outages. We would spend about a year building a ridiculously complex schedule, and if all went well, execute that puppy in about 45 days.

We're talking about ten thousand+ activities in the WBS, with enough relationships and constraints to gag a goat. With a half-million bucks a day in replacement electricity costs and 1000 extra contractors on site, the name of the game was absolute schedule control; we're talking about "calculate the top 5 critical paths three times a day" control.

I once authorized chartering a private jet in the middle of the night to go to Alabama to get a valve part we had to have.

Really. It was on critical path, so a $10,000 shipping fee for a $500 part looked like a bargain.

So, imagine how I first went about trying to schedule engineering work. I had my staff of planners trying to make individual assignments for 200 engineers to detailed work plans about six months in advance. Of course, the results of all that effort wasn't worth the media it was magnetized on, because everything out past six to eight weeks was garbage. It looked really good, but it was a complete waste of time.

Engineer responsibilities would shift around, people would come, people would go, new work would come in and work backlog would get cancelled. Priorities changed, and unplanned shut-downs would totally screw things up.

So I had them re-do it all.

It fell apart again. My staff was burning me in effigy. It took a few months for Dan Dudek to finally bang through my thick skull what was going on. Duh. It's all about respecting the planning horizon, stupid.

The Case of the IT Shop Closed for Business

Flash forward a several years later to an assistance visit with a customer managing a few hundred IT resources at a financial institute. One of the first things I always look at is the rolled up histogram of all the resources. The histogram knows all, tells all.

Like a blinding flash, the sharp violin screeches from the movie Psycho started pounding in my head; there before my eyes was the entire staff fully allocated to detailed assignments to 100% of capacity for the next 12 months.

Three letters immediately came to mind that I got used seeing written across the results of my nuclear physics exams — GCE.

Gross Conceptual Error.

I casually asked, "So, are you all planning on getting any more work requests in this year?"

"Of course, we get in new requests all the time", the VP replied.

"Will all that new work have to wait until next year to get done?"

"No, we'll have to do quite a bit of it shortly after it is requested."

"Oh." "Well then, who is going to do it?"

"Our Staff"

Well, you get the idea…we had a good discussion about things like the planning horizon, keeping capacity in reserve for "known unknowns", etc. They're doing fine now.

So there you have it. If you plan past the limits of the planning horizon, not only will you be mostly wrong — you have to do all that planning over and over again! Stop it, stop it, stop it.

Now — I gotta go see the loan officer about a tank of gas…

The Resource Planning Horizon: Onward Through the Fog

Stop for a moment and think about how little in our lives we can catalog under the heading of "certainty". The 7-day weather forecast is a joke. Social Security is looking iffy, as is making significant gains in your retirement account this year. Marrying into both money and true love is highly unlikely, and even making it home tonight in one piece for dinner is somewhat questionable (especially if you have to get on I-35).

My operational definition of certainty is "probability of fact beyond a reasonable doubt." We can pretty much skip the category altogether with respect to our jobs, organizations and all things work-related. In this day and age of the CEO du' jour, mergers, buyouts, takeovers, restructuring, layoffs, spin-offs, economic volatility, the cost of oil, political ambiguity and technological leapfrogging, things have become a tad bit ADD in the business realm. Our president and COO Greg Gilmore is prone to describe the situation by injecting, "Look, there's a chicken!" into the middle of a conversation gone awry.

On a more tactical level, daily life in the PMO is fraught with bugaboos and things that go bump in the night; vexing pixies, mischievous leprechauns and other apparitions inject uncertainty into the presumed order of things. Oh, I dunno, stuff such as key staff vaporizing into new jobs, or the boss coming down with the latest "must-do immediately" initiative. Things like finding out that the hardware ordered last month for that big global ERP implementation isn't actually ordered yet, or that there is a calculation error in the interface program that does month-end reports — and that it's been there for 28 months. By the way, the internet is down due to a com failure in Prague.

Despite this, we still have to deal with those who insist upon certainty when it comes to things such as distant milestones, initial resource estimates, and Rev. 0 baselines — probably the same folks who declared that latest initiative as "must-do immediately" with nary a glance at the consequences.

To manage expectations about certainty in the planning process, I like to use the analogy of driving through fog. Organizations, their missions, and their projects are akin to vehicles on an ongoing journey, and to manage them is to be in the driver's seat. On a macro level, we can clearly define the next intended destination, do a reasonable job of understanding our current location, and plot a general path to get there.

But, in the here-and-now of our travels, we can't always see as far down the road before us as we might like. While we can encounter refreshing (and all too brief) periods of clear skies on our quest, more often than not our visibility is limited by the fog of the unknown. The further out we look, the more fuzzy things become until finally we reach the operational limit of being able to visualize and counter obstacles in our way. At that point, we have to accept that we can no longer anticipate what lies ahead with certainty, and adjust our driving accordingly.

The operative word here is "acceptance". If the reality of a given situation is that we are dealing with copious amounts of uncertainty that causes variability in our plans, then to ignore that fact is to be unrealistic — or put more bluntly, to be in denial. Banging fists on the table and demanding that a schedule "not move" is akin to cursing the wind for blowing.

In part 2 of the PMO 2.0 whitepaper series, I briefly describe the Planning Horizon. It's also on my short list of topics whenever presenting key concepts for integrated work and workforce management, and the subject can be found as Best Practice MIC-08 in our PRISMS Management Integration Center Guide. To get to the essence of the planning horizon concept, it is all about understanding that tipping point in your plans and forecasts where projections exceed the probability of being at least half-right, and conditioning yourself not to go beyond it.

Because if you aren't at least half-right, then you are mostly wrong.

This is a critical point. If you put bad information into your planning system, someone will see it, believe it, and try to make decisions based on it. No data is better than incorrect data. One could argue that knowingly putting in information that is probably incorrect is a malicious act.

But that doesn't mean you can't or shouldn't plan well in advance; it's just a question of how much detail you provide. The outer limit of the planning horizon shifts based on the level of planning granularity employed. For example, you could probably feel good that the approved project list for a strategic portfolio will still contain at least half of those items 18-24 months from now. You can likely plan a major project at the phase level 6-to-12 months in advance and be generally correct in your assumptions. And, as far as planning out what specific work activities are going to be done, you should be able to produce a reasonable rolling 12 week plan.

Over the years, I have always taken the opportunity to ask first line managers how far forward they can plan on a named individual actually accomplishing a particular assignment within a one-week window of time. The vast majority answer, "three to six weeks, max."

In my past life, I used to facilitate a "Five Year Strategic Plan". Things got really sparse after the first two years, and there was nothing in it out past year three. The absence of information spoke volumes — it was an admission that we didn't have any idea what was over that 36-month horizon. To plan that far out these days requires pentagrams, Ouija Boards and bleached chicken bones.

Violation of the planning horizon is one of the most common errors that I encounter when conducting assistance visits. It is a hard habit to break, driven by our lust for certainty and short memories for historical performance. Addiction to long range planning often forces the PMO to be complicit in a futile exercise that generates bad information and dilutes the veracity of planning information in general. Once dubious information is allowed into the planning system it can create doubts about the validity of the entire pool of data when it is discovered. I would much rather see that energy put into better planning those things that can be reliably managed in the near- and mid-term, rather than stretching questionable prognostications past the breaking point. The result would be a more accurate portrayal of that which we know, as well as a healthy admission of that which we do not.

So, be zealous guards of the planning horizon and enthusiastic about having others do the same — confidently and completely plan as far forward as you can, but respect the point where you have reached your practical limit.

I like to characterize to the whole uncertainty element under the heading of "business dynamics", which sounds so much more professional than "I haven't a clue". This whole line of reasoning is not intended to be a convenient and plausible excuse for why dates are missed, but rather to foster recognition that "stuff happens". What really matters is not so much the happening itself, but rather our keen awareness of it and active response to it. To accept our dynamics as reality and adjust our thinking to it is to create a nimble environment that is comfortable on the balls of its feet, able to deftly respond to whatever is thrown at it.

Elevate Your Thinking -- Managing Beyond Projects

Some technology organizations have become so numb to project failure that they have fallen into collective indifference about crappy project execution of crappy ideas, and utterly complacent to the impacts that such an attitude wreaks across the enterprise. Any report on the success rate of technology projects will back up the fact that this is a commonplace situation. I've been recently incorporating into my presentations some information from a Hackett Group study, "Core Competencies of Financial Top performers: Managing the Business Value of IT". Every time I see those numbers I am again reminded of the disparity between the top performers versus the norm and it really infuriates me — there's just no reason for so many organizations to have such mediocre project performance.

For anyone that has attended one of our PMO 2.0 Leadership Forums or heard one of my presentations lately, you know that I am a strong advocate of ensuring that projects are always placed into 1) proper perspective, and 2) business context. Both of these help combat project portfolio lethargy.

First is proper perspective. Recognize that a project itself has no inherent business value. In fact, worse than simply being neutral, it is a massive negative drag on the organization, by virtue of it also costing time, money and resources. Projects consume an inordinate amount of managerial oversight, invite considerable risk and greatly distract from otherwise normal operations.

Whoa, them's fightin' words. Remember the Alamo, and Annie Get your Gun!

But it is true. From the moment it is conceived until the day it is finished, a project is a worthless, costly disruption, and too few ever amount to anything else. Every year a huge amount of energy goes into analyzing and estimating proposed projects that end up getting tossed aside like a crate of salmonella-laden tomatoes. Still others may make it through initial funding and design, only to never get the green light for development. Finally, too many projects that run to completion never adequately fulfill the promise offered in their charters. Projects fight a war of attrition at every step along their treacherous journey towards delivering potential value.

Fortunately, a project does have a chance to make amends, but only posthumously. A project runs a long gauntlet of potential mishaps and hurdles to actually provide deliverables that generate substantially more business benefit than it cost to create them. Only then can we can finally look back on it and attach some modicum of redeeming merit. "On time and under budget" may reflect tactical ability to manage projects, but they are meaningless measures when it comes to whether business value was reaped from the results.

That perspective leads us to placing projects into business context. Given that projects themselves hold no intrinsic business value, what are they good for? They are transformation mechanisms. Projects give us the vehicle for changing the status quo of our products or services. That's it. They can either create or modify a product or service, or some combination of the two. End, period, next.

By adopting this point of view, we approach the decision to pursue and execute projects relative to the bigger, value-based picture. If you manage your environment from the vantage point of analyzing and understanding your current portfolio of products and services relative to their contribution to the goals and objectives of the organization, then you elevate your thinking to whether products and services must be transformed, and what is to be achieved. By concentrating on the lifecycle of existing products and services relative to strategic imperatives, the process of identifying, analyzing and making go-forward decisions on projects is accomplished with a sharp focus on outcomes.

This linkage must be articulated and maintained throughout the life of the endeavor, or you run the risk of perceiving project portfolios as disconnected entities. And, by life of the endeavor, I mean achievement of intent — delivery of business value. Once a project (or portfolio of projects) becomes decoupled from business outcomes, it invites a gambling hall mentality where a certain expectation of routine failure is allowed to incubate. Attitudes about projects become more of a game of chance, where a roll of the dice dictates whether you will lose or win, rather than viewing each and every one as critical investment that must be carefully considered and nurtured to further organizational missions. That's not to suggest that you become so conservative that you quit taking risks, but you should be deliberate and methodical about what the risk-reward scenario is at a business level, and make a conscious effort to stack the deck in your favor to minimize attrition.

Project deliverables must also remain tightly coupled with business outcomes to ensure effective follow through after the project itself ends. These outcomes may take weeks or months to emerge, so it is critical that a mechanism is in place to continue to move the effort forward into an operational state. See my post on Benefit Management.

So, the next time you initiate, evaluate, fund or execute a project, remember that it's only value is as a transformation agent applied to products and services, and that change comes at a considerable cost. Then think about why you need the transformation, the intended outcome that is to be achieved, and remove failure as a regularly acceptable option within the collective project management culture.

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OK folks, glad I got that off my chest; I feel better. Print this entry out, snip along the line above, and attach it to the agenda for the next quarterly meeting of the steering committee. I bet you a beer that proposals on the docket receive a reinvigorated dose of discussion and scrutiny.