CHAPTER 1
Introduction
1 Introduction
To survive and prosper, organizations must continually improve their ability to respond to changes in their environment. Investing in incremental change programmes in order to realize tangible benefits is a way of doing this.
The rate and scale of change experienced by organizations continues to increase. Words such as volatility, uncertainty, complexity, and ambiguity are often used to describe a fast-paced and changing world where the path from the current state to the desired future state is not linear and cannot be predicted with any certainty.
What is VUCA?
The acronym VUCA (volatility, uncertainty, complexity, and ambiguity) is commonly used to refer to the dynamic and fast-changing nature of the contemporary business environment. The purpose of the VUCA label is not to explicitly define the individual terms, nor to describe how each affects organizational survival. Rather, the label is used as a warning that organizations must develop greater awareness of, and readiness for, the unexpected in order to survive.
Leaders need to decide when to invest to address drivers for change. For example, when to:
• embrace disruption and emergent technologies and trends
• build new physical infrastructure
• respond to societal expectations and policy changes
• build more effective working partnerships across supply chains
• use scarce resources as efficiently as possible across the organization’s diverse range of projects and processes.
Often project management is used to define and deliver new capabilities. In other circumstances, change is managed through continual improvement of ‘business as usual’ (BAU) processes. Programme management is recognized as an approach that brings together multiple projects and other work associated with delivering outcomes of benefit across organizational boundaries. The programme management approach shows organizations how to adopt appropriate governance, pace, and focus to enable them to move ahead.
The purpose of this guide is to:
• describe an adaptable set of programme management approaches, leading to the creation of outcomes of benefit in an incremental way
• provide an integrated framework that guides the work using three lenses:
• fundamental principles
• governance themes
• processes across a programme lifecycle.
The guide is intended for those who are involved in the direction, management, support, and delivery of programme work. It will also be useful to those who sponsor programmes, lead programmes, manage projects or processes within a programme environment, or support programmes (e.g. by providing assurance or working in a programme office).
The wider use of MSP
This deals with the requirements in a product brief to make MSP relevant to work that is called other things but which could benefit from a programmatic approach.
It is common for different terms to be used to describe the work managed to deliver beneficial change. Some organizations use the term ‘mega-project’, typically to describe work that has a high investment commitment, vast complexity, and a long-lasting impact on the economy, the environment, and/or society. Others use terms such as ‘major projects’, ‘strategic projects’, ‘strategic initiatives’, ‘transformation projects’, ‘change portfolio’, or just refer to ‘major change’.
This guide assists with the management of the delivery of any beneficial change that cannot be achieved through the management of a single project, as described in methods such as PRINCE2® or PRINCE2 Agile®.
Definition: Programme
A temporary structure designed to lead multiple interrelated projects and other work in order to progressively achieve outcomes of benefit for one or more organizations.
Programmes can exist for many years. Sometimes, they can appear to have a permanent place in the organization structure. However, a key feature of programmes is that programme governance has the primary purpose of adding specific value, and that there will always be a point in time when governance is no longer warranted.
1.2.2 Lead multiple interrelated projects and other work
Project work or process-focused work creates the outputs and capabilities that enable outcomes of benefit. Programme management goes beyond coordinating the collection of necessary work and is focused on making choices of what work is done and when.
1.2.3 Progressively achieve outcomes of benefit
Programmes are designed to deliver outcomes of benefit to stakeholders throughout the programme lifecycle using an incremental approach. Programme management requires the design and redesign of the progression towards the desired future state with a focus on achieving measurable benefit as early as possible. The incremental approach also allows for the intentional alignment with new information as the programme progresses. This enables organizations to be responsive and flexible. Such responsiveness and flexibility is often referred to as enterprise agility.
Definition: Enterprise agility
A condition of an organization that is able to be flexible and responsive to drivers in its environment. Programme management enables enterprise agility. Also called ‘corporate agility’ or ‘organizational agility’.
The fact that programmes require an inherently incremental approach does not imply that programme management relies on implementing agile ways of working. Projects within the programme may adopt agile ways of working where it is optimal to deliver outputs iteratively; the schedule is then organized through timeboxes where as much scope as possible is delivered with a fixed set of resources. Programmes do not progressively realize outcomes of benefit through fixed timeboxes, but rather by designing multiple interim landing points that are spaced to reflect a step-change in capability and benefits realization.
Chapter 7 on the structure theme discusses how programmes work with projects and other work that are using multiple modes of delivery, including pure agile ways of working, linear or waterfall approaches, and a range of hybrid solutions to fit the needs of the programme.
1.2.4 One or more organizations
An organization in a programme context may be a separate legal entity, public-sector department, or business unit or function within a larger legal entity. In all cases, programmes work across organizational boundaries and are concerned with ensuring that the needs of stakeholders are understood and maximized within necessary constraints. MSP uses the term ‘investing organization’ to refer to the body that carries the risks associated with funding the programme and realizing the outcomes of benefit.
Programme management does not replace the need for competent management of the project-based and process-based work that is grouped together within the programme. Programme management adds value by ensuring that work is coordinated and optimized, i.e. the right work is done at the right time to satisfy the priorities of the investing organization(s).
1.3 Why use programme management?
Programmes are temporary structures used by organizations to lead investments in change. Multiple organizational objectives may be served by the investment. Rather than referring to different types of programme which suggests that all programmes fall into one type or another, MSP refers to reasons for the investment in change. The scope of a programme often includes more than one reason. Common reasons include:
• Innovation and growth A response to the opportunity to build and exploit new physical or knowledge-based capabilities.
• Organizational realignment A response to mergers, acquisitions, or divestments, or a drive to restructure how resources are deployed.
• Effective delivery A response to demands from customers, regulators, or other stakeholders to improve compliance and/or performance.
• Efficient delivery A response to sharing scarce resources requiring prioritization to gain the best outcomes for the least cost across multiple projects and processes.
Figure 1.1 provides a visual representation of the reasons for using programme management.
Figure 1.1 Reasons for using programme management
1.4 Overcoming common challenges
MSP is specifically designed to address common challenges that organizations encounter when leading investments in change. These include:
• insufficient support from decision-makers in the investing organization(s)
• unclear decision-making
• unsustained focus on outcomes and benefits
• poorly defined, communicated, or maintained narrative that supports the vision
• lack of clarity about the gap between current and future states
• unrealistic expectations about the capacity and ability to change
• failure to engage and influence stakeholders
• complex dependencies obscuring an integrated approach
• inability to influence the prevailing culture
• difficulties in keeping effort focused at the right level of detail.
A programme is a major undertaking for most organizations, putting significant demands on already busy resources, and requiring substantial funding and change for the organizations involved.
Programmes always exist within the internal and external organizational context. Externally, the ecosystem of stakeholders (e.g. customers, citizens, regulators, pressure groups, suppliers, and competitors) provides opportunities and threats. These shape the organizational objectives and their related strategies, policies, investments, and targets. Internally, the permanent organization is designed to deliver strategy through the ways of working embedded in BAU organizational routines. Changes to strategy inevitably need embedded ways of working to change and this has to be done in the context of the prevailing culture and power structures. As a result, programmes are often seen as disruptors within an organization, and programme management needs to establish the right balance between leading change and understanding and respecting the established paths to value.
Uncertainty is a feature of most programme environments leading to a diverse range of risk types that have the potential to influence programme objectives. In addition, external and internal contexts are unstable so programmes need to adapt to emerging information and keep a focus on the most affordable and achievable ways forward. Figure 1.2 illustrates a programme environment.
Organizations have choices about how they manage their investments in change, and adopting the MSP programme management approach is one choice. Some organizations will judge that a project management method (such as that defined in PRINCE2) is sufficient for the work because the path to achieving the desired outcomes is clear and can be defined at the start. Other organizations may choose to adopt a portfolio management approach (such as that defined in Management of Portfolios or MoP®) because their primary focus is to keep their extensive collection of individual investments in change efficient and focused on strategic objectives. Some organizations may use all three approaches. If the investing organization(s) is ready to invest in the necessary governance and processes, the MSP programme management approach can bring significant advantages.
Figure 1.2 Programme environment
National rail network programme
In the national rail network programme, the programme environment is characterized by major economic, societal, and sustainability drivers for change. As it progresses, the programme is also likely to encounter numerous political challenges.
Key drivers from the external context include:
• the increasing importance of the environment and the use of sustainable energy
• the need for a better service in an already congested rail transport system
• the availability of innovations in rolling stock designs and signalling technology
• an awareness that other departments are also seeking additional investment funding from the government treasury.
As a result, the government’s organizational objectives are to implement the national transport policy, driving through aggressive targets for improvement and integrating this work into a single programme.
Consequently, the governance structures and approaches to managing existing rail programmes will need to change. This is expected to be problematic as there are historic conflicts between the people leading the existing programmes. The integrated programme will need to move quickly to:
• create a unified programme organization to bring existing programmes together into one
• analyse the effect on other forms of public and private transport, including rail freight services that share infrastructure with public services
• identify the enabling technology that will be essential for success.
Charity organizational realignment programme
The programme environment in this scenario is characterized by disruption from the wider sector. This has resulted in a need to redesign the organization and significantly change the ways in which staff and volunteers work.
Key drivers from the external context include:
• the effect of advances in technology on methods of fundraising, service users’ needs, and the service offered
• responding to issues of public trust following some high-profile cases where that trust has been broken
• an increasing number of people in need of the charity’s services.
As a result, the charity’s organizational objectives are to realign the organization with a centrally coordinated operating model that has:
• standardization around key compliance areas (e.g. safeguarding* of service users, staff, and volunteers)
• an approach to investments in technology that supports fundraising in the first instance, but building capability to look at technology-enabled responses to some aspects of service delivery in the future. This could include support through virtual centres of excellence.
The implications are significant for staff and volunteers. Conversations with management have raised strong concerns regarding the distinctive culture of the organization. Decisions need to be made quickly to:
• define how much they want to change at this time (the ambition for significant change exists at board level)
• understand the implications for staff, volunteers, and service users and make a judgement about the ability to engage and motivate the team
• identify the enabling technology that will be essential for greater centralization to be effective
• establish an organization structure for the programme that enables the team to succeed.
*Safeguarding means protecting the health, wellbeing, and human rights of people at risk, allowing them to live safely, free from abuse and neglect.
Bank compliance and adaptability programme
Here the programme environment is one of considerable change and challenge. Key drivers from the external context include:
• regulatory change that opens up access to banking data and enables customers to use innovative financial applications. Some regions have been early adopters of changed regulations in this area, with many parts of the world intending to follow
• the challenge of new, more agile competitors who are able to bring products to market much faster than the bank. These are noticeably taking market share, particularly in developing markets
• falling customer satisfaction.
The bank is keen to improve its offering to customers to regain their loyalty and to ensure great service, as well as complying with the new regulations. However, as an established player in the global market, it has the constraint of being heavily reliant on legacy processes and systems, which are difficult to navigate and slow to change. The programme has the dual challenge of regulatory compliance and the creation of innovative new products, enabling customers to view their own financial data across multiple bank accounts and investments worldwide, using information from the bank and its competitors.
The internal challenges associated with this are significant and can be summed up by the perspectives of two members of the executive committee:
• The chief risk officer is concerned that, just by complying with the regulations, the ability to prevent money laundering is at risk.
• The chief information officer (CIO) is very excited about the possibilities of this programme. The legacy systems limit innovation and prevent the bank from exploiting new financial technology and the programme will address this.
The CEO and the board agreed that the programme needed to both ensure compliance and build a solid platform for the future. They hoped that the programme would help to solve the problems with customer loyalty.
Utilities maintenance and improvement programme
The programme environment in this scenario is characterized by the need to prioritize and schedule maintenance and improvement works to efficiently make use of limited resources and minimize public disruption while the works are carried out.
Key drivers from the external context include:
• public concerns about the reliability and safety of ageing equipment, particularly old wooden electricity poles that are becoming unsafe
• public concerns around the level of disruption, particularly the duration of planned electricity outages during maintenance works
• pressure from the regulator to provide network redundancy so that the network can better withstand and continue to supply electricity during extreme weather conditions.
In previous years, all work within the infrastructure portfolio was treated as a series of stand-alone projects and prioritized according to a single set of investment criteria applied to the portfolio. This caused some internal problems that the programme needs to resolve, these being:
• maintenance gear and crews being over-allocated in some months and under-allocated in others
• works causing more disruption than necessary because of inefficient scheduling. A recent example of this was when local streets were closed and electricity was cut during excavation works to install new electricity cables, then disrupted again later when new poles and overhead cables were installed.
The decision to use MSP means that planning, coordination, resource allocation, and reporting will be managed at a programme level, providing greater visibility for the organization but less autonomy for local teams. The outcomes of benefit should be the ability to do more maintenance and improvement work to build resiliency in a less disruptive way for the public and at no additional cost.
1.6 How MSP fits into AXELOS Global Best Practice
MSP is part of a portfolio of global best-practice publications aimed at helping organizations and individuals manage projects, programmes, and portfolios consistently and effectively. MSP can be used in conjunction with all the other best-practice products, and international or internal organizational standards. Where appropriate, guidance is supported by a qualification scheme and accredited training and consultancy services. All best-practice guidance is intended to be tailored for use by individual organizations (see Further research for a list of AXELOS best-practice guidance).
This guide is not intended to be read from beginning to end. It is a reference guide designed to help those involved in programme management to shape the work of the programme so that value can be delivered to the investing organization(s) and other stakeholders. It also provides the basis for the MSP qualifications. The foundational information is contained in Chapters 2, 3, and 11, and you are recommended to read these chapters first.
A summary of the content is as follows:
• Chapter 2 outlines the seven MSP principles: the guiding obligations that are continually required to achieve value from programme management.
• Chapter 3 outlines the seven MSP themes: the essential aspects of governance that are required to ensure that the programme is aligned with the principles across the programme lifecycle.
• Chapter 11 outlines the seven MSP processes that are applied across the incremental MSP lifecycle. Processes are a structured set of activities that define the sequence of actions and their dependencies to achieve a specific objective. All of the themes are applied across all of the processes in order to deliver value from programme management.
• The other chapters are a deeper dive into either one of the themes or one of the processes:
• Chapters 4–10 describe each of the MSP themes and the controls that are essential for upholding and driving value from the principles.
• Chapters 11–17 describe each of the MSP processes and how the different roles within the programme organization ensure that the controls are effective within each process.
Working together, principles, themes, and processes provide an integrated framework to guide the management of programmes. Figure 1.3 illustrates the three lenses through which the MSP framework is viewed.
Figure 1.3 The MSP framework and the three lenses