CHAPTER 10

How to Manage Multiple Projects in an Interdependent Portfolio

“Making a good plan and thinking about strategic issues is obviously important,” Sarah observes. “I still wonder about the actual management, however. What if things don’t go as expected? What about outside pressures? Will my team stay motivated? In other words, how do I manage the portfolio and achieve the goal?”

Sarah’s concerns include:

How can I keep my team focused on the goal without either panicking or getting distracted?

How can I make sure my team chooses the right balance between ongoing work and this important move?

How can I keep crunch time from becoming a disaster?

As with our other project portfolios, the management phase is different from the planning phase. Take a look at the special issues involved in managing a successful interdependent project portfolio.

DEFINITIONS

Here are the key terms you will need to know in this chapter.

An esclating objective is a project situation in which the agreed-upon objective grows during the process (also called mission creep).

A change order is a change in the project objective requested by the customer (internal or external).

The Godzilla principle states that if you catch a problem early, it is easier to solve.

The pop-up principle states that when you solve a problem, the solution itself usually contains a problem.

THE ART OF MANAGING THE INTERDEPENDENT PORTFOLIO

The process for managing multiple projects is additive: you need to do all the elements of managing the task-oriented portfolio and the independent portfolio, and then add the special features of the interdependent portfolio on top of them.

The interdependent project portfolio is defined as a large project with major divisions important enough to be considered projects in their own right. The first key to managing this type of portfolio is not to allow any individual project to fail without fundamentally compromising the success of the portfolio.

The Smithsonian National Air and Space Museum was both a large project and an interdependent project portfolio. Each individual exhibit gallery clearly qualified as a project; each aircraft restored was a project; the construction of the building itself was a project. The failure of any project within the portfolio would compromise and possibly destroy the success of the entire portfolio. For example, if all the exhibit galleries had been successfully completed, but the building construction had been delayed, the museum would not have opened on time. Essentially, the quality of the galleries would have been irrelevant if there had been no building in which to put them.

As Ed Harris said in the movie, Apollo 13, “Failure is not an option.”

YOUR ROLE AS PORTFOLIO MANAGER

From a management point of view, one of your critical responsibilities is to help your individual project managers stay focused on the goal. It is all too easy to become distracted by the individual requirements of a project within the portfolio and pursue them in a way that is detrimental to the interests of the portfolio as a whole.

What is best for an individual project in the portfolio is not necessarily best for the portfolio itself. For example, in the portfolio involving the computer center move, there is an obvious conflict between Manage transition and Manage installation. The manager of the transition has primary responsibility for ensuring that critical functions run smoothly. The manager of the installation has primary responsibility for ensuring that the installation is successful. There are numerous steps that each manager may take to make his job easier—at the expense of making the other manager’s job more difficult.

Maximizing either project at the expense of the other can be damaging to the portfolio as a whole. If you make the transition run perfectly by interfering with the installation, you may have a late and trouble-filled installation. If you make the installation run perfectly by interfering with the transition, you may fail to keep up with critical ongoing functions.

The right approach strikes a happy medium. Neither project manager gets everything she might want in order to make individual projects perfect. How do you reach a perfect balance? Following are some management suggestions.

  Face conflict early. Search your plan for potential conflicts, and have a meeting with the affected project managers. Ask them to participate in identifying the right balance and the compromises each must make to achieve the goal.

  Set up coordination systems. Have the project managers meet regularly (with or without you) to work out strategies and agreements on potential conflict areas. Hold them accountable for working together smoothly.

  Make decisions as needed. One key responsibility of the portfolio manager is to resolve areas of conflict when individual project managers cannot. Perhaps there is a policy issue at stake. Perhaps one project has to suffer much more than another does. Perhaps both performance objectives cannot be met at the same time, and something has to give. Those decisions are yours. Make them clearly.

  Be alert to politics. Do not be surprised if one, or both, of the affected project managers decides to use a strategic approach to get what she wants. It is the job, after all, of a project manager to achieve the project goal, and political maneuvering is one way to attain it. It is not necessary to punish someone for being political, but ensure that you make firm decisions and justify them in terms of portfolio needs.

NO-FAIL BUDGETING IN THE INTERDEPENDENT PORTFOLIO

Another key management issue in the interdependent project portfolio is resource allocation. Given the reality that resources are always limited and opportunity is unlimited, you must allocate the available resources to the projects in your portfolio. To ensure that you meet your most important objectives, you should allocate resources in a two-pass process.

First, identify the minimum acceptable performance level for each project in the portfolio and the resources necessary to achieve that minimum level. This is called no-fail budgeting. Allocate the minimum resources. If you have no more resources, the minimum is now the best you can do.

Second, allocate any remaining resources to achieve maximum portfolio achievement. Do not allocate resources evenly across your projects, because some of your projects do not improve portfolio quality once they have achieved the minimum. For example, in construction, no one paints the inside of the drywall, because it does not add to the quality of the building as a whole.

COPING WITH THE ESCALATING OBJECTIVE

While certain management problems can affect any manager in any situation at any time, one particular nightmare for the project portfolio manager is the circumstance of escalating project objectives. This occurs when the initial project objective, although properly approved, starts creeping upward as the project progresses. Time compresses, budget shrinks, and performance criteria increase.

Changes in projects lead to change orders. Whether change orders are formal or informal, they tend to be common to project management experience. You must learn how to cope with the change.

Try the following techniques, especially at the beginning of your project.

  Do the entire triple constraints process. This may be the source of some problems if you have not fully negotiated and explored the triple constraints. Too many project portfolio managers neglect identifying the underlying project reason and the management, organizational, and customer issues that influence it.

  Identify the players. As part of the triple constraints process, remember that a project has a central objective and often secondary objectives that are the related interests of all those who form the project constituency. You must discover who your project constituency is, interview him, learn his goals and perceptions, and integrate as many of those goals as possible without compromising the central objective. Do not forget personal as well as external motivations.

  Put it in writing, and shop it around. A good goal is a written goal. Make sure people know the goal in advance and in writing and have an early opportunity to challenge that goal. Although it can be difficult to negotiate a workable compromise, it is much easier than coping with a late-project major change order that virtually guarantees disaster. Although people can change a written goal, it is harder than changing an unwritten goal. As a famous Hollywood mogul said, “An oral contract is worth the paper it’s printed on.”

  Show others your plans, schedules, and budgets. You cannot assume that others in management will understand the consequences of a proposed project change as well as you do. Document the consequences of a change clearly and objectively. When a change is requested, print out a current plan and budget. Next, integrate the change into the existing schedule, and print out the revised plan and budget. Third, brainstorm the most proactive ways of achieving the new goal. Revise the schedule and budget to accommodate the change. Print that out. Now, go to management or the customer. Show them the three versions: 1) no change, 2) integrate the change and proceed, and, 3) best ideas to integrate the change while achieving the time, budget, and performance goals. Ask for suggestions. You may still have to make the change, but you may better negotiate the corresponding changes in time, budget, and performance.

  Build change into the process. In many projects, the nature of the work makes change orders inevitable. It may not be possible to identify all the real needs until the work has progressed to a certain point. In this case, you need to schedule change in the process. Set milestones in your project schedule for customer review and expectation development, tasks for integration of requirements changes, and redevelopment to accommodate changes. Build this into your initial schedule and budget. If it is inevitable, plan for it.

PROBLEM-SOLVING STRATEGIES

The first—and still the best—problem-solving strategy is to avoid the problem. Effective planning, including the control point identification chart, reduces both the number and the severity of project problems.

Here are a few additional pointers to help you in solving problems.

The Godzilla principle. In Japanese monster movies, there is frequently a scene where the monster du jour (Godzilla, Mothra, Gamora, and so on) is a cute baby monster. People say, “Oh, what a cute little monster!” Obviously, no urgency exists. They ignore the monster.

They wait until the monster is full-grown and busily stomping downtown Tokyo, then they shout, “What are we going to do?” The answer is, of course, nothing. When Godzilla is rampaging through downtown Tokyo, there is very little you can do about it. The best option is past.

On your projects, spend time on baby-monster patrol. Every time you find a little problem with the power to later grow into a big one, stomp on it at once.

There are three opportunities when problem solving is possible: 1) when you first think of it, 2) when you first detect it, and, 3) when it actually happens. The rule of problem solving is, the closer you get to the problem, the fewer the options available to solve the problem.

If you are planning a summer picnic, and rain is a possibility, you can schedule a rain date. You have solved the problem at the moment you thought of it.

Perhaps you missed that opportunity, but you heard a weather report forecasting rain a few days before the picnic. It is too late to recall the invitations and set up a rain date, so you rent a tent, increasing the cost. At least people will be dry. You have solved the problem when you first detected it.

Perhaps you do not watch the news, and you missed the weather report. You wake up the morning of the picnic, and it is raining cats and dogs. Now you are madly scrambling for umbrellas, changing activities, and trying to keep the picnic from becoming a complete muddy ruin. You have solved the problem when it happens.

While you cannot anticipate everything or solve every problem, you can improve your problem-solving effectiveness by using this strategy.

Pop-up principle. Every time you solve a problem, something else pops up.

Schedule a rain date for the picnic? New problems pop up, such as extra time, effort, and cost to book the site for a rain date—loss of perishable food and some loss of available guests on the second date.

Rent a tent? New problems occur: additional costs and activity cancellation.

Pop-ups do not invalidate a problem-solving strategy; they present one more challenge to overcome. When you come up with a solution to a problem, ask yourself, “What are the pop-ups? What negative consequences can arise from this solution?” Sometimes, the negative consequences are minor, even insignificant. In that case, you can ignore the pop-up. Sometimes, the cure is worse than the disease. If the solution is worse than living with the problem, do not choose that particular solution. Sometimes, the negative consequences of the pop-up can be minimized. Look for ways to adjust the solution. Of course, this can create another pop-up!

Use the triple constraints. Every problem affects one or more of the triple constraints; that is what makes it a problem. A problem may be one of the following four types.

1. Time problem: Tasks take longer than expected.

2. Budget problem. Tasks cost more than expected.

3. Performance problem. Tasks are not delivering the expected result.

4. Resource problem. Resources are not available to do the work—this causes problems in one or more of the constraints.

Because the triple constraints are always in priority order, the seriousness of a problem depends on which constraint is affected. If a problem affects the driver, it is very serious and must be solved. If a problem affects the weak constraint, it may not be worth the effort required to solve it.

For the picnic, imagine you are thinking about renting a tent. If budget is the driver, the tent may cost too much. It is not an acceptable solution. If budget is the weak constraint, the extra cost may be irrelevant. Use the order of the constraints to determine the seriousness of problems, and use the flexibility in the weak constraint as a tool to help you solve them.

A FINAL WORD ABOUT MANAGING MULTIPLE PROJECTS

The futurist Alvin Toffler predicted that the concept of bureaucracy would give way to a new organizational strategy, the ad-hocracy. He might have been talking about project managers of single and multiple projects.

As a project manager, you traditionally have more responsibility than authority. In fact, you are often in a situation when you need the willing and voluntary cooperation of people over whom you have no authority if you are to achieve your goals. You do this through persuasion, negotiation, planning, communication, and professionalism. You do this by developing your skills and knowledge. You do this by using the tools of project management and fitting them to the circumstances of your organization and your work.

When you do, you will find yourself fitting the traditional definition of a project manager:

People responsible for doing something that has never been done before, for people who don’t know what they want, who must first predict the unknown, make a plan to cope with the unforeseen, and execute the plan with too-limited resources that they do not control, and who are held completely responsible for the results, even if miracles are required.

You can do it. Good luck.