Executive Summary

What are middle managers’ roles and responsibilities in program and project portfolio management? What are the best practices of successful companies today? These questions are of increasing interest for organizations operating with limited resources and ambitious performance objectives. More and more organizations use projects as the building blocks for their business in order to deliver unique products or services to their clients’ specific requirements. At the same time, organizations are required to optimize the use of their resources to achieve their own business objectives. These project-based organizations have to balance two competing objectives: the delivery of high quality project and program objectives to internal and external clients, and the most economic assignment of their resources across all projects in the organization.

The majority of past studies looked into program and portfolio management to identify which project selection technique is most successful, how Return-on-Investment (ROI) decisions are made, or which planning techniques are appropriate. The present study looks at the middle managers’ roles and responsibilities in program and portfolio management. Through that, the study takes an organizational-wide perspective towards the subject and identifies the best practices of successful companies. To that end, the study is complementary to existing literature written solely from a program or portfolio management perspective, and produces the activities, processes, and tools used for successful program and portfolio management in an organization.

Results from the study suggest that successful companies engage in both program and portfolio management simultaneously, in order to balance the variety of requirements from their internal and external clients. Success of these organizations is significantly higher than for organizations with neither program nor portfolio management, or those with only one of these two governance structures. Middle managers in successful organizations are significantly more involved in steering group work, resource procurement, identification of bad projects, handling of issues related to programs and portfolios, as well as review and audit of troubled projects.

The framework of program and portfolio management roles of middle managers, developed through this study, shows how effectiveness, efficiency, and coordination are achieved through a set of activities prior to and during project execution. To manage their portfolio of projects, middle managers identify business opportunities, look for synergies between projects, and plan for and select required resources before projects are executed. During the same time, business planning, project selection, resource planning and procurement, and program plan reviews take place in order to manage the programs of the organization. During project execution, middle managers are engaged in identification of bad projects, participation in steering groups, coordination, and issue handling.

Results show further that organizations apply these roles to balance the complexity and dynamics of their environment. Low performing organizations show a lack of adaptability to situational changes, which leads to an imbalance in their ability to handle product, time, and complexity requirements from their clients.

This report is written for a wide variety of readers, such as senior executives and middle managers in larger organizations, program and portfolio managers, PMO members, consultants, and researchers. These groups have different perspectives towards the subject and expect different information from this report. To meet their specific areas of interest, we provide a short summary of each chapter. This allows readers to quickly identify those parts of the report that meet their information needs and expectations. However, to comprehend the study in its entirety, it is suggested that one reads the whole report.

The following summarizes the chapters in this report.

Introduction and Background

This chapter describes the motivation and context of the study. By taking an organization-wide perspective, the chapter describes program and portfolio management as a governance structure for project-based organizations. Individual projects within this structure are seen as transactions, which efficiently and effectively convert “input” to “output.” To accommodate the different governance structures required for management of a variety of simultaneous projects in an organization, the study takes on a Transaction Cost Economics (TCE) perspective. Based on this theoretical foundation, the chapter outlines the research questions, which set out to:

• Identify the impact of an organization’s complexity on the application of program and portfolio management
• Identify the practices, roles, and responsibilities of middle managers in program and portfolio management of successful organizations.

Following that, the study’s plan, schedule, milestone deliverables, and team are described.

Literature Review

This chapter summarizes the underlying literature of this study. It starts by outlining definitions of portfolios and their management, then the literature is grouped by popular project selection techniques, different planning and management techniques and their associated problems, and competencies needed for portfolio management. Similarly, the program management literature is reviewed by outlining the objectives of programs and program management, and then categorizing literature into groups addressing aspects of program organization, program life cycles, and competencies needed for managing programs of projects.

Neither programs nor portfolios exist in a vacuum. Therefore, the literature on project types, as well as organizational complexity, is briefly reviewed to identify factors that may impact the application of program and portfolio management structures in an organization.

The chapter ends by outlining the four hypotheses of the study, which address:

• The relationship of an organization’s complexity with the use of program and portfolio management
• The correlation of different project types with different program and portfolio management roles and responsibilities
• The difference in governance structures for program and portfolio management in low and high performing organizations
• The difference of middle managers’ roles and responsibilities in program and portfolio management between low and high performing organizations.

Methodology and Analysis

This chapter outlines the multi-method approach underlying the study. It starts by describing how a first qualitative study with nine interviews was used to build a grounded theory, which was then confirmed through a global qualitative study with 242 responses, and triangulated with other study results. The underlying research paradigm, development of the different data gathering tools, and samples of the studies are described, together with the techniques used to analyze the collected data.

Analyses of the two studies are described in detail. They begin by showing the development of a framework for roles and responsibilities through the first study. This framework identifies the different ways that middle managers engage in program and portfolio management prior to and during project execution to coordinate tasks, as well as manage effectiveness and efficiency of project work. Analysis of the data from the second study confirms this framework. It shows the roles and responsibilities of middle managers and the organizational program and portfolio management structures of successful organizations, and how these are impacted by an organization’s complexity. Modeling the relationship between organizational complexity, project types, and program and portfolio management roles identifies the situational adaptability of an organization as a key factor in structuring an organization for high performance. Results triangulation is done by mapping the present study’s results against those of other studies, in order to identify overlaps and differences.

This chapter is mainly written for readers interested in the details of the underlying research process and analysis techniques. The results of the various analyses are described in the next chapter.

Managerial Implications: What Middle Managers in Successful Organizations Do

This chapter summarizes the results of the two studies and describes:

• The practices, roles, and responsibilities in the framework developed in the prior chapter
• The differences between high and low performing programs and portfolios
• The impact of organizational complexity on the structures to successfully organize for program and portfolio management.

Managerial implications and recommendations for organizations and middle managers are discussed. Recommendations for further reading are provided.

Theoretical Implications and Conclusions

This chapter sets the study results in context of the research questions outlined in the introductory chapter. A contingency model is developed, which is derived from the research model described in the methodology chapter. It shows the impact of project type and organizational complexity variables on variables for middle managers practices, roles, and responsibilities in program and portfolio management. Theoretical implications are elaborated from this, and the study’s contributions to existing theories are provided. Strength and weaknesses of the study are provided, as well as suggestions for future research. The report finishes by setting the results of the study in a wider context and a vision for the future.

The Appendices provide the interview questions, the global Web-based questionnaire, and some of the statistical summary tables of the data analysis.