Managing portfolios of change
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Transcript of Managing portfolios of change
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Managing portfolios of change
Michael Young
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Defining Change
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The Changing WorldExternal• Globalisation & competition• Customer sophistication• Technological advances• Rapid change• Legal environment
Internal• Increasing complexity• Do more with less• Change weariness• Short-term focus• Generational differences
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Source: Antonio Nieto-Rodriguez (2012): The Focused Organization, Gower, London
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The Research Shows…$100 billion were invested in projects in the State of Victoria over the past decade without any evidence of improvement in their strategic goals
Leading organisations admit that as few as 10% of their strategies are implemented
¾ of mergers and acquisitions never pay off
Projects Success: On-time On-budget Standish
0%10%
20%30%40%50%
60%70%80%
90%100%
1994 1996 1998 2000 2002 2004 2006 2009
Successful Challenged Failed
Project governance in Australia is highly dysfunctional
Low performing organisations complete only 36% of change initiatives successfully
40% of an organisations resources are spent on strategic initiatives yet top executives pay little attention
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My department has
more pressing iss
ues..
I don’t have the budget for this..
I haven’t got time for this..
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P3M3 Maturity Levels
Control Governance Benefits Stakeholder Risk Financial Resource0
1
2
3
4
5
AVERAGE Project mgt Program mgt Portfolio mgt
P3M
3 M
atur
ity Le
vel
0Rqr7Sk2c0VJ7z37qQfsmR
2013 Maturity Levels – 2nd best agency
Control Governance Benefits Stakeholder Risk Financial Resource0
1
2
3
4
5
AVERAGE Project mgt Program mgt Portfolio mgt
P3M
3 M
atur
ity Le
vel
0Rqr7Sk2c0VJ7z37qQfsmR
2013 Maturity Levels – large agencies
Control Governance Benefits Stakeholder Risk Financial Resource0
1
2
3
4
5
AVERAGE Project mgt Program mgt Portfolio mgt
P3M
3 M
atur
ity Le
vel
0Rqr7Sk2c0VJ7z37qQfsmR
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Deliver them well
Select the right
initiatives
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The Right Initiatives
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Ideation
Customers
Partners
Markets
Scans
Open Source
Business Intelligence
Competitive Intelligence
Internal Database
Staff
Idea Generation
Ideation Events
DataMining
IndividualInput
Initial Screen
andReview
Ideas Portfolio Management Idea Transition
Strategic Fit
MeetsCurrent /Future
CustomerNeeds
CompetitivePosition
Conceptof
Operations
Revenue Potential
FeasibilityandRisk
Analysisof
Alternatives
Investment CostAnd
FundingStreams
Enterprise Capabilities
BusinessPlan
VirtualPrototype
WorthinessPartner
Alignment
Opportunity Pipeline
Business Unit Pursuit
Source: Boeing Corporation
Your resource capacity
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The best organisationsPfM3 - Management Control – Level 4 PfM3 - Organizational Governance – Level 5
1. Robust organizational framework for categorizinginitiatives, measuring and monitoringorganizational performance, and measuringcontribution from portfolio
1. Governance of investment management hasmoved from a programme/project-centricprocess to organization-centric
3. High-level reports on key aspects of portfoliomade available to Executive Board to supportinformed decision-making
4. Prioritization within portfolio based on priority ofstrategic objectives
6. High levels of operational engagement withdecision-making and direction of portfolio
5. Executive Board has clear accountability forstability of the organization and activelymanages portfolio to ensure sustainability andrealization of strategic objectives
7. Decision-making based on maintainingalignment and balance within portfolio,and its optimal configuration, to achievestrategic objectives
6. Organization proactively enables, supports andachieves business process improvement
9. Trend reporting on progress, actual andprojected cost, level of risk, and initiative andstakeholder confidence, are routinely collected,reviewed by Executive Board and used fordecision-making
10. Quantitative and qualitative measures andlessons identified are routinely used to improveeffectiveness of portfolio management
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IT Investment process (2011->2012 from $50Mpa -> $27M pa)
The theory … The practice …
‘decibel-driven’ processesMore productive and inclusive
Australia
Employment projects
Schools projects
Early childhood projects
Help …
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Key Changes
From ‘tunnel to funnel’– Concept Definitions (3p)– Detailed Proposals ($20k-50k)– logic needed to cull earlier in
the process• Analysis
– 4R, 6Q Governance
2 template changes• ValIT Categorisation vs ‘Essential’
1. Doing better things2. Doing more things3. Doing things better4. Keeping our promise5. Keeping lights on6. Keeping our job
• Value Risk Assessment (Existing)– Policy– Strategy– Savings– Risk
Timing 2012-13Cluster Employmentinvestment category (Multiple Items)Value AssessmentCount of cost pa Column Labels
Row Labels
Policy Strategy Savings Risk
Grand Totalimplement govt policy 3 3
support govt policy - clear & measurable benefits 2 2
support govt policy - intangible benefits only 4 4
No clear linkage to govt policy 1 1
implement dept strategysupport dept strategy - clear & measurable benefits 6 6
support dept strategy - intangible benefits only 1 1
No clear linkage to dept strategyROI > 200%ROI > 150%, <200%ROI > 100%, <150%ROI > 0%, <100% 2 2
no ROIwill reduce dept risk rated High or Extremewill reduce op risk rated High or Extremehelp reduce dept risk rated High or Extreme 1 1
will reduce dept risk rated Moderate or Low 1 1
help reduce dept risk rated Moderate or Lowhelp reduce op risk rated Moderate or LowNo linkage to risksGrand Total 10 7 2 2 21
Timing 2012-13Cluster Employment unaligned:
Alignment with investment priorities45% 26% 6% 19% 3%
Count of cost pa Column Labels
Row Labels
Policy Strategy Savings Risk
#VA
LUE!
Gra
nd T
otal
0 1 11. Doing New Things (Transform) 0%2. Doing more things (Grow) 2 1 3 10%3. Doing things better (Enhance) 8 6 2 2 18 58%4. Keeping our promise (Compliance) 4 1 5 16%5. Keep lights on (Core) 1 3 4 13%(blank)Grand Total 14 8 2 6 1 31
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Head of Projects
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Key Take-Aways
• Change’s are a significant investment – treat them as such• Understand and develop your organisation’s change
delivery capability• Prioritise! You cant do everything.• Create and reinforce a delivery culture• Don’t kill your change initiatives by under-resourcing them• Project sponsorship and governance are core skills for
executives• Stop initiatives that no-longer deliver any benefit