Video 2020 European Virtual Conference: People-Centered Strategic Portfolio Management

November 5, 2020 | By Samantha Varner

You can watch the replay of Donna Fitzgerald’s full presentation, “Strategic Portfolio Management in Three Easy Steps,” below:

Donna Fitzgerald of ProSymmetry presented at the Tempus Resource 2020 European Virtual Conference on October 8, 2020

Your organization’s resource management tool is designed not only to manage your operations, but also to facilitate your strategic planning and execution. According to Donna Fitzgerald, Chief Product Evangelist at ProSymmetry, only about one-fifth of company initiatives actually get completely executed before a new strategy is set. In her presentation at the Tempus Resource 2020 European Virtual Conference, Fitzgerald urges organizational leaders to transform how they think about, manage, engage, and structure their people. Because “people are the new money. Money itself isn’t going to execute your idea. You need people and skills,” Fitzgerald states.

Focusing on the people

Use a strategic portfolio as your company’s “value planning tool,” is Fitzgerald’s first step toward a people-centered approach. Traditionally, leaders define strategy as a series of goals, and people propose projects to contribute to meeting those goals. But, Fitzgerald argues, no one project, no matter how well designed, can target multiple strategies the way we expect them to. Therefore, we need to get back to what we think of as value. How does the organization define value, and do achieving the stated goals bring us to that value? Once you’re guided by your value, you need a resource management tool that brings visibility and control over resources, money, and time and that is flexible enough for you to manipulate your strategy. Tempus Resource, Fitzgerald mentions, is powerful enough to weight your portfolio toward one strategy while still executing another.

“People are naturally agile as long as you set them up for success.”

-Donna Fitzgerald, ProSymmetry

From there, Fitzgerald advocates for some new approaches to Resource Capacity Planning. This is “the silver bullet for productivity” because burnout is just one of the many reasons people are not at optimal productivity. Even before COVID-19, they’ve been asked to do too much across too many places, without clear goals or a sense of accomplishment. Some best practices for capacity planning include, whenever possible: never putting a person on more than two major assignments at a time; structuring and balancing their time between work for enhanced focus and prioritization; providing adequate time and space to think about problems and use colleagues as resources; and including them on roadmaps so they understand their place, value, and contributions.

Building a culture for success

Finally, we need to rethink our company cultures to encourage and build stronger networks, and truly see our people as the key to strategy execution. Fitzgerald lays out four concrete steps to create cultures more conducive to productivity and collaboration. They include decentralizing decision-making; focusing less on formal rules and more on principles; creating a high degree of permeability; and establishing collaborative partnerships. All of these culture strategies are built toward what we know matters to people: belonging, autonomy, competence, answers, and safety.

“Culture is built one conversation at a time.”

-Donna Fitzgerald, ProSymmetry

When we build an adaptive culture with a foundation of networks (knowledge, relational, and organizational), we prime our most important assets—our people—to innovate and collaborate while also thriving. What’s truly exciting, reflects Fitzgerald, “is that today we have to tools to make your thinking and your networks all visible.”

To learn more about how Resource Portfolio Management can help your organization transform and optimize company culture, contact ProSymmetry, makers of Tempus Resource. And be sure to check out all of our speakers from the Tempus Resource 2020 European Virtual Conference.


Transcript: People-Centered Strategic Portfolio Management

I would like to chat about a three-step approach to strategic portfolio management.  Obviously a lot of you are going through the actual mechanics of what the tool gets to do, what the tool will do for you.  What I want to do is say now that we have tools like this, how does it change our basic business practice?  Because I’ve recently come to the conclusion that, as Greg said, I’m very focused on people, and people are the new money, so let’s go into this a little bit more.

Strategic Portfolio Management is Becoming an Operating Company

Today we all know that strategy isn’t quite getting executed the way people would like it.  Routinely companies get about their top 10 strategic initiatives done out of a list of maybe 50 and then they declare success and set a new strategy or walk on.  Operations is the dominant force.  So the insight I had the other day is that if I handed each of you a million dollars, other than celebrating, and then told you had to go spend it on an initiative that would bring great value to your company, the first thing you’d find out is that money, in and of itself, doesn’t do anything for you.  You’ve got to understand what the idea is, you’ve got to make sure the idea is structured right, and then fundamentally you’ve got to go get people and skills to do the work.  So, going forward it’s clear to me that we have to get focused on execution.  High-flying ideas isn’t going to do it anymore, and people and skills are what we have to focus.

The Strategic Portfolio is our Value Planning Tool

So, starting with the portfolio.  Rather than the classic list of projects that we have in a portfolio, and I’ve been doing portfolio management for a lot longer than I want to admit, I think we need to look at the portfolio as a value planning tool.  That means we’ve got to define what value is.

To Assure Execution

So, let’s go back to where we actually start getting off the rails with our strategies execution process.  Most organizations define strategy as the bluish turquoise line you see at the top of this chart.  We want to save on capital, we want to reduce costs, we want to be more innovative, we want to do something with service levels.  Fine.  High level stuff.  According to HBR, most strategies are just fine.  They’re good enough, but what happens is then senior management goes back to each of the business units, everybody puts together a list of projects that they think can contribute.  And what is even more insidious, and if I’m going to be talking about a process that many of you use, I hope you’ll understand why I don’t recommend it going forward.  People put in projects and they say that it will reduce capital, it will reduce costs, it will increase innovation, it will do service level, it will do something with staff and then they get points for saying one single project is going to do all these strategic initiatives, and they go up to the top of the list.  Well, common sense would tell you that a well-designed project may stay within keeping of some of those strategic initiatives, but it really can’t be targeted.  A project can’t be targeted at doing the standard three to five strategies that every organization has.  So, the first thing we need to do is understand as an organization is that we need a middle layer.  That’s the green and the orange lines.  We need to have people in all business units come together to talk about what the conceptual implementation plan is for any strategy.  Once we start to do that we’re going to walk down the list so here’s an example.  We want growth.  We’re going to go gain market share through the growth.  We’re going to do faster time to market.  Okay.  This faster time to market makes sense for the mythical company I’m talking about because they sell software and they hope that by coming up with new whiz-bang features, new functions, new applications, they’re going to grow their market.

Now, there are many ways you can do that, but in this example, by the way, all of this will be appearing in a white paper I’ve written that should be coming out sometime early next week.  So, the example I was writing about in there is, we’re going to pick automation, machine learning.  So, we’re going to go through all the stuff on Google Play and Apple and we’re going to have the machine learning read all the reviews for us, for our nearest competitors, and it’s going to give us a list of feature functions and maybe some of the more subtle things that people are asking for that our product management may not have occurred, and by producing more of that we will get more people buying our product, which will let us gain market share, which will give us growth.  That clearly delineates that what we’re looking to do is get more product to market faster by way of automation.

What-if Planning by Strategy and Availability

Assuming we do that with everything and we start putting the list of proposals into our strategies, we can finally start to see what we’re doing.  And right now, rows and columns, I’ve seen people fix them.  So, let’s take an example of what you really can do with what-if planning.  And I know everybody loves the what-if planning at ProSymmetry and that’s what really struck me here.  I looked at that and I said, wow, wait a minute.  I really can move my strategy around.  I really can look at my resources, and I can do things today with ProSymmetry that I couldn’t do with any of my financial tools when I started my career.  Now I can define an option that says, “Increase throughput for enter new markets in the front half of the year.  I can make a decision to weight my portfolio very strongly to one strategy rather than another and yet still do two strategies or three during the year.  I can decide I want to increase my gross margin in the second half of the year.  I can hold operational effectiveness, which is where I would say the normal improve operations, I could hold that constant.  I can model that.  I could go to option two.  I can complete all open operational projects in Q1 and then straight line spending.  One of the things we saw at Gartner was, and this is clearly IT, that we had a lot of focus in IT and operations.  Basically 70 percent of all spending in IT at the time was operational, and only 30 percent (we won’t even call it strategic) was some form of new project.  The rationalization was that if we wanted to really execute a digital transformation strategy, that number of 70 percent was going to have to go down to 40 percent.  Well, no one can cut cold turkey, but now we have tools that can help us say let’s finish up everything and then let’s say we’re only going to spend so many people or so much money on operation and maybe we go 70, we go 60, we go 50, whatever transformation curve we can run.  At the same time, we can say, let’s increase our new products.  Let’s spend up to 30 percent in dollars in manpower.  Again, it transforms how we look at it because we have a mental model now that we’ve never had before.  Unless any of you share my background in finance, the impact of this may not be quite as exciting to you as it is to me.  But to have a tool that puts resources, money, projects, how are we going to handle all this together and keeps them locked and loaded, to me is a very exciting thing to have happen.

Portfolio Planning is About Assessing Value Early and Often

With that said, does the portfolio change as we’re doing all this?  I think it does because what we can do now is start to look at what’s value.  When I started my career the goal was to write 50-page business cases and do all sorts of things and generate as much paperwork as possible as a best practice.  Now, I started my career in Silicon Valley and we never did that because it didn’t make any sense.  You needed to ship product; you needed to make money.  The key is we can change our concepts from standard things like ROI, which often means how much money does it bring in being applied to things that actually don’t have a clearly traceable return on investment.  We want everything to have a return, but the classic calculation doesn’t really help us.

So we need to start moving to what’s value.  What is the lever we really wanted to move? We’ve got to be much clearer as we go through the timeline what we’re getting, so we start with what’s the value.  We’ve got a roadmap.  We can start sequencing.  Then we look at how many FTEs.  What’s the timing?  What are the changes?  And we start realizing we can’t start everything in January, so again we’re starting to model and we’ve never been able to build these models flexibly enough that as we get more information, we can.  So, the linearity of portfolio management doesn’t change, but our ability to iterate the model as we go through every one of these does start to change significantly.

Resource Capacity Planning

We get good, old-fashioned resource planning, which everybody on this call I hope is doing.  This is really the silver bullet because we do all this great work on the portfolio and we get our prioritized list, and then we have to figure out usually financially where we’re going to draw the line.  Now we can really say who’s doing what work.  We can start with time sequencing projects around the resources.  And if we have the value focus that I mentioned in the last slide, we can start to say (and this is an important thing that gets missed) if I’m doing a project or developing a product and it truly has value, aren’t I better off if I can deliver that value quickly?  So, if I have 12 months and I can bring something valuable online after 90 days, then I have three quarters for that fiscal year to recognize the value.  If I do too much work and all of my value-oriented projects finally end up finally completing in Q4, well I sure didn’t get much value out of any of that investment because I only have one quarter to do it.  So value and time sequence projects.

Then we have to staff for productivity.  We’re burning our people out.  There’s Covid, work from home, whatever.  We were burning people out and I will say everybody else’s organization out there is perfect, but across the world we’ve been burning people out for a long time.  We’re doing that by asking them to do too much at any given time.  We put too much work on their plate.  We may not be asking them to work more than eight hours, but if you put more work than somebody can see the end of in their queue they never have the opportunity to feel a sense of accomplishment.  They literally start feeling like they’re on the hamster wheel going and going and going.   So, if we want to staff for productivity, I’m going to propose, and I know a lot of people think this is unreasonably draconian, that you never put the average person on more than two assignments at any one time.  Now, there’s some jobs where this isn’t true and I’m not talking about those jobs.  I’m saying someone where you would, in a perfect world, put them on a project fulltime, you never put them on two large pieces of work and you try to structure that.  So, if they’re on project A and project B, maybe they work Monday, Tuesday, Wednesday on project A, they work on project B the rest of the week.  Maybe they do mornings, maybe they do afternoons.  It isn’t that someone is watching them to ensure they do that, it’s to establish a protocol that says, “Yes, you personally can manage your time.  We’re not worried about it.  What we want you to do is understand that of the available time you have, whatever that is, you are keeping it balanced between these two pieces of work.  And if you can’t keep it balanced, please come to us and tell us that it’s really nice that you said to do this, but this particular activity is taking four times longer than anybody else ever thought, and I’m going to be able to do it.  So get me more help, reassign it to somebody.”  Then we start to know right away what’s going to keep us productive.

The next thing is try to keep the same staff on strategic programs and our next section will be about using strategic programs.  Again, task switching costs go down when people become experts.  Once you work, and this is where the whole agile fix team came from and it’s gotten very, very convoluted in the agile community, but the key premise was I need to know who my teammates are.  I need to understand their strengths, I need to know what they know, they need to know what I know so we can build a mutual expertise in the work that we’re doing.  Again, people who are fragmented, people who are running around don’t actually have the time for their unconscious to be thinking about the problem and we forget about those things.  True innovation comes out of thinking about something, going to a coffee shop, ignoring it for a while and coming back and going, “Oh my God.  This is how it works.”

Now, for those of you in IT or you have a mixed environment between something like maintenance and enhancements and strategy and you’re doing agile, please do not let all of that stuff go in the same backlog list.  I’ve seen multiple organizations do this and it’s really crazy.  So, what happens?  All the little small stuff, all the little urgent stuff, everything else gets pulled down first and the important stuff doesn’t, and because theoretically that’s how they’re managing their backlog and no one can say anything.  Nope.  If you want to do two backlog streams, if you have another way of doing it where somebody’s on a project and then they’re half-time on maintenance and enhancement, make them change groups.  Again, you want one switch.  You want to know I’m doing A, I’m doing B.  You don’t want A, B, B, B, B, A to where no one’s sure what they’re doing.

The Strategic Portfolio Consists of Programs

So, we talked about the stuff that really influences the portfolio, but one of the other things that’s happening is so significant now is that program management, which is a concept that people know about theoretically, but somehow the world lost it.  Unless you have a consulting company background, you probably have not had an opportunity to see good program management.  It’s something we’re going to have to reinvent.  Specifically, why?  Well, take a look at what the portfolio would look like if it consists of programs.  This is a reformatted portfolio.  We have our strategies at the top.  We have the benefits by category, if you want to call it that.  Does it have a direct financial benefit?  Is it customer facing?  Is it a better way of getting work done?  Is it the company culture?  Is it innovation?  We can break that down, if you want to split things around or re-title the rows.  It really doesn’t matter.  Those are concepts that work for me because I know exactly how to discuss them with someone.  You take the proposals, you put them in.  You’ve got the column which says, “My current efforts to increase gross margin are investment 5, 10, 2, 9 and 17.”  This is how much it’s going to cost and I am spending x percent of my people/available money on increasing gross margin.  That is a simple concept, straightforward, and after dealing with many, many senior management groups, it just makes the discussion so easy.  I could sit down with any operating committee, put this together and say, “Do you like it?  Is it working?  What are you really thinking in the back of your head?”  Once we get this signed off, and notice there’s one little thing down at the bottom of the slide.  I hope you can see it.  It says percent done.  Strategies should, because we talked about tactics, be very specific and there should be a measure of the completion of that specific strategic goal.  So, it’s not just enter new markets.  It’s enter market X, market Y and market Z over the next three years.  Now, all of that could change tomorrow and that’s something that people don’t understand any more.  The world’s not steady.  We cannot do this and think we’ve got a five-year plan.  We have a plan that we think might take us three years to implement with a goal of where we will be in one year and reality can intrude at any time and we will shift around and make whatever changes we have to make.  That’s the approach we all have to make today.

Roadmaps Become the New Gantt Chart

Another concept that I really love, I’d say roadmaps are the new Gantt chart.  So now that we know we can manage a strategy by making it a program, we can also look at all the activity as a roadmap and clearly see the sequence.  The more we show people roadmaps, the better it is to get them to understand why starting everything in January makes no sense.  Does project A have to come before Epic A?  Yeah, it might.  It really might.  You can’t develop the software before you develop the hardware it’s going to run on, for example.  And the TBD?  That’s okay.  It means I know I’ve got to do something else but I’m not sure.  I want to keep my program team together to do that so I put it in there.  The key here is that it organizes what used to be a list of 50 projects.  I walked into, I don’t think telling this story is out of school, I walked into the Australian Department of Defense.  They had pulled together the entire project list for the whole Department of Defense.  There were 2,000 projects on it.  It was printed out on old green bar because you know the military always has stuff like that, and it was taped to the top of the wall and ran all the way down to the white board and was sitting on the floor.  I asked the head of the PMO what do you do with this?  It’s really interesting.  How are you making sense out of 2,000 projects?  And he said, “Well, we look at it.  At least we know we have 2,000.”  And that was his serious answer, but the human brain can’t process that amount of data, so we’re trying to cut things up, trying to make it obvious, trying to give everybody, and I do mean everybody in the company, a holistic view of what we’re doing to enter new markets, who’s doing what, when they’re doing it.

Use Adaptive Program Management for Strategy Execution

I won’t belabor this, but there are ways to do program management and they’re not bureaucratic, they’re not weighty, they’re simply very straightforward ways we look at things.  They’re very agile.  I’ve got research.  Gartner has all of my research, so you can get it from me, you can get it from Gartner.  It’s really simple.  It’s really straightforward and it should help.

To Ensure Strategy Gets Executed, the Culture Must Support a New Paradigm

Now, back to culture.  We’ve always talked about culture, but culture has been so nebulous.  It’s been airy-fairy.  You call in organizational development specialists.  You call in change management specialists.  Well, every one of you on this call is a change agent.  Every one of you determines your company culture.  Every action we all take determines the culture we live in, so I would like to advocate that we all start focusing on things that we know will help build the environment that leads to maximum productivity going forward.  We need to decentralize decision making.  If you have a high command and control culture, give me a call.  I’ve seen some techniques that absolutely make decentralized decision making work and yet make the happiest command and control culture feel that it’s clearly delineated, who’s got authority to make what decision.  You want to keep levels of formulization low.  It’s always been a dichotomy between principles and rules.  If you want agility, if your management wants agility, that’s a principle-based culture; it’s not a rules-based culture.  You don’t want rigid boundaries.  The thing we know, and we’ll cover this in another second, is that everybody needs a network in their company and you need to know lots of people who don’t work in your department and they’ve got to be people that, were we able to see each other in person, that you can go to lunch with and that you can chat with to keep those connections good.  And then, again, strategy gets executed by cross-functional teams.

People Are Naturally Agile, As Long As You Set Them Up For Success

I don’t know, for those of you who are model builders like I am, this is my variation on the work that David Rock did as to what’s really important to people.  So, belongingness.  Human beings are tribal and most people think that’s a negative concept and think that’s violent or something, but it’s not.  We like to hang with people that we’re comfortable with, so teams and work groups meet that human need.  People want to belong.  Let’s let them belong.  We want to belong.  Nobody’s different from us.  At the same time, they want autonomy; they want to be self-directed.  What I’ve been talking about here is that you set the guardrails and then you let people work within them.  They’re completely able to do their work.  Autonomy is critical.  It says autonomy is required for a strong, entrepreneurial orientation, and what we know is the most successful companies allow their people to almost manage their work as if they were a small business owner, as if their job was their side hustle.

Confidence is critically important and now that ProSymmetry has skills, we can just move mountains.  Skills are the best thing in the world, as Sean knows, because he’s had to listen to me talk about them incessantly.  Human beings want certainty; I believe it’s more answers.  It occurred to me after having worked on this for about several decades is that mental models can give human beings certainties.  So, if any of you have looked at the maturity model I’m working on, and I keep stressing mental models.  What do they do for us?  They are fast decision making tools.  They are also fast tools for conceptualizing what’s going on.  If you add mental models and open communication, because clearly your mental model can always be wrong, you keep people in a place of comfort.

And finally, safety.  Safety is really the freedom to take appropriate risks.  Cultures are not agile if they don’t understand that some things are going to go wrong.

Culture is Build One Conversation At a Time

Finally, and this is really a recap.  What we’re trying to build to maximize our portfolio, to maximize our strategy execution is an adaptive culture.  We want relational networks.  We want to encourage people to know each other, and eventually we want tools, and I think skills will help us do this and who’s been on what project.  Where we start to understand not only who knows what, but who knows who else.  We can start to work out teams that work well together.  We need knowledge networks.  Human beings learn through tacit knowledge.  That’s somebody else’s experience.  There’s lots of things we can do for communities of practice, for other things, and having built all this stuff in other companies, you just sort of build it on the sly.  You just kind of get people together in a room and have them talk about stuff.  How can we make this better?

Nothing I’m advocating here takes a lot of authority, takes a lot of permission.  You all know your culture very, very well and you know what’s appropriate, and don’t let anybody talk you out of the fact that your knowledge trumps any advice from anybody, including me.  So, you start with this puzzle wherever you think things will move and you just nudge.  And you talk to other people and say, can we nudge this?  Can we make it better?  I think, for the first time, we have tools that allow us to make things visible that when I started my career it was all stuffed in my head.  My management had to trust me sometimes when I went in and said, blah, blah, blah.  If we do this and this and this, it will all work out.  I was very fortunate.  They did trust me and I was right often enough and I was allowed to do things, but that’s luck.  I’ll be real clear.  That’s luck.  Now we have tools that allow you to make your thinking visible, that allow you to make the networks visible, and I think it’s a really exciting opportunity.

If there’s anything that caught anybody’s interest that you’d like to continue the conversation on, drop me a note.  I would love to chat with you.  Thank you.

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