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Delivering on the Promise of Enterprise Portfolio Management

July 20, 2022 | By Donna Fitzgerald

“The intent with EPM (enterprise portfolio management) is to link strategic planning and the realization of key strategic plans, objectives, and goals while not getting distracted or bogged down in lesser initiatives. Central to successful EPM is the ability to move from output-oriented approaches to targeting specific outcomes that benefit and vitalize businesses strategically to drive innovation and competitive performance.”

Melinda Ballou – IDC

Melinda hit the nail on the head with this comment. In order for EPM to work, it needs to stay focused on the big picture. And let me be clear that the big picture is not executing the most projects; rather, it’s about executing the right projects at the right time to deliver on the organization’s overall strategy.

Define enterprise portfolio success

For a strategy to be effective, it must be composed of a series of outcomes that, together, deliver a fundamentally new business reality. And of course, the way we achieve that series of outcomes is through the project portfolio.

This seems like a simple concept, but it’s where many organizations fall short. If you work in PMO, let me ask you this: do you understand what each investment in the portfolio is supposed to deliver and what will be required to ensure success? In my experience, the answer is often no. Usually, it’s because no one has asked you to.

A successful EPMO (enterprise portfolio management office) is one that can find the answers to the questions no one is asking. If the goal is strategy realization—and why would an organization ever implement a strategy unless they intended to realize it?—then every project in the portfolio needs to deliver a piece of that strategy. The EPMO must therefore be an advocate not for specific projects, but for the strategy itself. 

Power dynamics in enterprise portfolio management

If this seems overly simplified, that’s because we haven’t yet touched on one of the biggest roadblocks facing every organization: politics. Strategy execution is a game of influence, negotiation, stealth, and a commitment to get the right work done at the right time. And there is nothing straightforward about it. 

We need to start acknowledging that a process-heavy command and control gatekeeping organization is nothing more than a power play. It’s also incredibly inefficient. People are hard-wired to wiggle over, under, and around any rule that doesn’t contribute directly to their survival or happiness. The mental model for anyone running a future-oriented organization must be a willingness to alter, simplify, or even abandon processes in order to get work done.

If processes or politics are dictating which projects receive priority, that’s an immediate red flag. Project prioritization should be based first on what piece of the overall strategy each one delivers and second on the availability of the resources required to get the work done.

Explain better way to get there

At its best, the EPMO brings a neutral, cross-divisional perspective to discussions about strategic and operational issues. But whether or not the EPMO is able to function this way comes down to the structure of the organization itself.

I believe we should start looking at the EPMO as a Strategy Realization Office (SRO). If you’re familiar with SROs, then you know their function is to view projects and the overall portfolio not in a vacuum, but by how they support the planning and execution of the strategy. The SRO’s purpose is to ensure that the current work actually aligns with the organization’s strategy. An SRO contains an implicit commitment to deliver, whereas an EPMO does not.

Executing the right work at the right time

So what should you do if current or planned projects aren’t delivering on the overall strategy? How can you direct work and reallocate resources to the right projects? And, most importantly, how do you handle the power dynamics that are inevitably behind certain projects?

Your strongest option is to convince others your goal is not at odds with theirs. Remember, humans are programmed to resist following processes or rules that they don’t see as contributing to their survival or happiness. This is where lightweight business cases that help people realize the project they want to do is solving the wrong problem can go a long way. 

Enterprise portfolio management, by definition, requires having a seat at the enterprise level. The head of the EPMO must be able to openly communicate with the C-suite about strategic and operational issues. The only way to deliver on the promise of the EPMO is to trust that its top priority is sequencing the portfolio and allocating resources in order to realize the organization’s overall strategy, not cater to power dynamics.

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