Middle managers in program and project portfolio management: practices, roles and responsibilities

113 Pages·2006·1.858 MB·English

by  Blomquist, Tomas, Müller, Ralf

Project Management Institute
M M
IDDLE ANAGERS IN
P
ROGRAM AND
P P
ROJECT ORTFOLIO
M
ANAGEMENT
Practices, Roles and Responsibilities
Tomas Blomquist, PhD
Ralf Mu¨ller, DBA
ISBN:1-930699-57-3
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Appendix C: Summary Tables 99
Questionnaire Variable Descriptions 99
Performance Differences by Governance Structure 100
Performance Differences in Projects, Programs and Portfolios
by Governance Structure 101
Summary of Research Questions, Hypotheses and
Results 102
Appendix D: Author Contact Information 103
List of Tables:
Table 1: Study Milestones and Deliverables 9
Table 2: Industry, Company, Country, and Role of
Interviewees 31
Table 3: Framework of Program and Portfolio Management
Roles of Middle Managers 33
Table 4: Quantitative Study Demographics: Age 36
Table 5: Quantitative Study Demographics: Years of Business
Experience 36
Table 6: Quantitative Study Demographics: Years in Current
Position 36
Table 7: Quantitative Study Demographics: Geographic
Dispersion 37
Table 8: Quantitative Study Demographics: Industries 37
Table 9: Correlations between Independent and Dependent
Variables 41
Table 10: Canonical Correlation Models 43
Table 11: Mapping Study Results against Elonen & Artto
(2003) Results 46
Table 12: Managers’ Time Spent on Different Tasks (1(cid:2)never
to 5(cid:2)full time) 50
Table 13: Differences between High and Low Performing
Organizations 51
Table 14: Perspectives of Project, Program, and Portfolio
Managers 70
Table 15: Organizational Perspective for Project, Program, and
Portfolio Management 71
Table 16: ANOVA of Differences in Success by Governance
Type 100
Table 17: Scheffe Test on Differences in Success by
Governance Type 101
Table 18: Summary of Research Questions, Hypotheses, and
Results 102
List of Figures:
Figure 1: Governance of Project Management in Context 3
Figure 2: BCG Market Growth / Relative Share Matrix 12
vii
Figure 3: Project Portfolio Selection Process (Archer &
Ghasemzadeh, 1999) 16
Figure 4: Goals—Methods Matrix (Turner & Cochrane,
1993) 24
Figure 5: High Level Research Model 27
Figure 6: Detailed Research Model 40
Figure 7: Canonical Correlation Model (all responses) 43
Figure 8: Canonical Correlation Model (low performing
organizations only) 44
Figure 9: Organizational Performance in Different Governance
Structures 48
Figure 10: Final Model 69
Figure 11: Broker—Stewart Model for Program and Portfolio
Manager (after Turner & Keegan, 2001) 72
Figure 12: Perspectives towards an Organization 73
Figure 13: Project, Program, and Portfolio Performance in
Different Governance Structures 102
viii
Appendix C: Summary Tables 99
Questionnaire Variable Descriptions 99
Performance Differences by Governance Structure 100
Performance Differences in Projects, Programs and Portfolios
by Governance Structure 101
Summary of Research Questions, Hypotheses and
Results 102
Appendix D: Author Contact Information 103
List of Tables:
Table 1: Study Milestones and Deliverables 9
Table 2: Industry, Company, Country, and Role of
Interviewees 31
Table 3: Framework of Program and Portfolio Management
Roles of Middle Managers 33
Table 4: Quantitative Study Demographics: Age 36
Table 5: Quantitative Study Demographics: Years of Business
Experience 36
Table 6: Quantitative Study Demographics: Years in Current
Position 36
Table 7: Quantitative Study Demographics: Geographic
Dispersion 37
Table 8: Quantitative Study Demographics: Industries 37
Table 9: Correlations between Independent and Dependent
Variables 41
Table 10: Canonical Correlation Models 43
Table 11: Mapping Study Results against Elonen & Artto
(2003) Results 46
Table 12: Managers’ Time Spent on Different Tasks (1(cid:2)never
to 5(cid:2)full time) 50
Table 13: Differences between High and Low Performing
Organizations 51
Table 14: Perspectives of Project, Program, and Portfolio
Managers 70
Table 15: Organizational Perspective for Project, Program, and
Portfolio Management 71
Table 16: ANOVA of Differences in Success by Governance
Type 100
Table 17: Scheffe Test on Differences in Success by
Governance Type 101
Table 18: Summary of Research Questions, Hypotheses, and
Results 102
List of Figures:
Figure 1: Governance of Project Management in Context 3
Figure 2: BCG Market Growth / Relative Share Matrix 12
vii
Acknowledgements
This study was initiated by the Project Management Institute
(PMI)asoneofitsactivitiestofostertheadvancementofproject,
program,andportfoliomanagement.Theauthorsaredeeplyindebted
to PMI for their support and guidance throughout the study.
We should give particular mention to Dr. Harry Stefanou from
thePMIProjectManagementResearchProgramandtoProf.Dragan
Milosevic´ for their guidance, as well as Wanda Curlee and Shelley
Gaddie from the Project Management Research Member Advisory
Group (RMAG) for their valuable contributions. We are especially
gratefultoourResearchCoordinator,EvaGoldman,forhercontinu-
ous support during the entire life cycle of the study.
FurthersupportwasprovidedbytheResearchInstituteofUmeå
School of Business and Economics, Umeå University, Umeå, Swe-
den.Throughadditionalfundingandprovisionoftheschool’sfacili-
tiesandtechnology,wewereabletofinishthestudyinthetimeframe
setinthebeginningandreachourqualityobjectives.Specialthanks
areextendedtoProf.AndersSo¨derholm,Prof.MariaBengtsson,Prof.
KurtBra¨nna¨sandAssociateProf.NilsWåhlinfromUmeåUniversity
for their support of the study.
During our presentation of the study results to the research
community,wereceivedanumberofhelpfulrecommendationsand
hints.WealsothankattendeesofthePMIResearchConference2004
in London, UK, for their helpful comments on the subject.
Anempiricalstudylikethiswouldnothavebeenpossiblewith-
out the voluntary help of practitioners, who devote their time and
knowledgetotheadvancementoftheprofession.Wethank,inpartic-
ular,the intervieweesandquestionnairerespondents fortakingthe
time and effort to share their knowledge with us, as well as those
who provided further comments and descriptions of their program
and portfolio management practices.
Many more than we can mention here have helped us behind
the scenes, including our families and friends. We could not have
done this study without their help.
ix
Executive Summary
Whataremiddlemanagers’rolesandresponsibilitiesinprogram
andprojectportfoliomanagement?Whatarethebestpractices
of successful companies today? These questions are of increasing
interestfororganizationsoperatingwithlimitedresourcesandambi-
tiousperformanceobjectives.Moreandmoreorganizationsuseproj-
ects 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 objec-
tives:the deliveryofhighquality projectandprogram objectivesto
internalandexternalclients,andthemosteconomicassignmentof
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,howReturn-on-Investment(ROI)decisionsaremade,or
whichplanningtechniquesareappropriate.Thepresentstudylooks
at the middle managers’ roles and responsibilities in program and
portfolio management. Through that, the study takes an organiza-
tional-wide perspective towards the subject and identifies the best
practicesofsuccessfulcompanies.Tothat end,thestudyiscomple-
mentarytoexistingliteraturewrittensolelyfromaprogramorportfo-
lio management perspective, and produces the activities, processes,
and tools used for successful program and portfolio management in
an organization.
Resultsfromthestudysuggestthatsuccessfulcompaniesengage
inbothprogramandportfoliomanagementsimultaneously,inorder
tobalancethevarietyofrequirementsfromtheirinternalandexter-
nalclients.Successoftheseorganizationsissignificantlyhigherthan
fororganizationswithneitherprogramnorportfoliomanagement,or
those with only one of these two governance structures. Middle
managersinsuccessfulorganizationsaresignificantlymoreinvolved
insteering groupwork,resourceprocurement, identificationofbad
projects, handling of issues related to programs and portfolios, as
well as review and audit of troubled projects.
xi
The framework of program and portfolio management roles of
middle managers, developed through this study, shows how effec-
tiveness, 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 opportuni-
ties, 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,andprogramplanreviewstakeplaceinordertomanage
the programs of theorganization. During project execution, middle
managersareengagedinidentificationofbadprojects,participation
in steering groups, coordination, and issue handling.
Resultsshowfurtherthatorganizationsapplytheserolestobal-
ance the complexity and dynamics of their environment. Low per-
forming 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.
Thisreportiswrittenforawidevarietyofreaders,suchassenior
executivesandmiddlemanagersinlargerorganizations,programand
portfolio managers, PMO members, consultants, and researchers.
These groups have different perspectives towards the subject and
expect differentinformation fromthis report.To meettheir specific
areas of interest, we provide a short summary of each chapter. This
allowsreaderstoquicklyidentifythosepartsofthereportthatmeet
their information needs and expectations. However, to comprehend
thestudyinitsentirety,itissuggestedthatonereadsthewholereport.
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-basedorganizations.Individualprojectswithinthisstructure
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.Basedonthistheoreticalfoundation,
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
●Identifythepractices,roles,andresponsibilitiesofmiddleman-
agersinprogramandportfoliomanagementofsuccessfulorga-
nizations.
xii
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,
thentheliteratureisgroupedbypopularprojectselectiontechniques,
differentplanningandmanagementtechniquesandtheirassociated
problems,andcompetenciesneededforportfoliomanagement.Simi-
larly, the program management literature is reviewed by outlining
theobjectivesofprogramsandprogrammanagement,andthencate-
gorizingliteratureintogroupsaddressingaspectsofprogramorgani-
zation, program life cycles, and competencies needed for managing
programs of projects.
Neither programs nor portfolios exist in a vacuum. Therefore,
theliteratureonprojecttypes,aswellasorganizationalcomplexity,
isbrieflyreviewedtoidentifyfactorsthatmayimpacttheapplication
ofprogramandportfoliomanagementstructuresinanorganization.
Thechapterendsbyoutliningthefourhypothesesofthestudy,
which address:
●Therelationship ofan organization’scomplexitywith theuse
of program and portfolio management
●Thecorrelationofdifferentprojecttypeswithdifferentprogram
and portfolio management roles and responsibilities
●Thedifferenceingovernancestructuresforprogramandportfo-
lio 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.Itstartsbydescribinghowafirstqualitativestudywithnine
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
byshowingthedevelopmentofaframeworkforrolesandresponsibil-
itiesthroughthefirststudy.Thisframeworkidentifiesthedifferent
waysthatmiddlemanagersengageinprogramandportfoliomanage-
ment prior to and during project execution to coordinate tasks, as
xiii
wellasmanageeffectivenessandefficiencyofprojectwork.Analysis
ofthedatafromthesecondstudyconfirmsthisframework.Itshows
the roles and responsibilities of middle managers and the organiza-
tional program and portfolio management structures of successful
organizations, and how these are impacted by an organization’s
complexity.Modelingtherelationshipbetweenorganizationalcom-
plexity,project types,andprogramand portfoliomanagementroles
identifies the situational adaptability of an organization as a key
factor in structuring an organization for high performance. Results
triangulationisdonebymappingthepresentstudy’sresultsagainst
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.
Theresultsofthevariousanalysesaredescribedinthenextchapter.
Managerial Implications: What Middle Managers in
Successful Organizations Do
Thischaptersummarizestheresultsofthetwostudiesanddescribes:
● 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.
Managerialimplicationsandrecommendationsfororganizationsand
middlemanagersarediscussed.Recommendationsforfurtherread-
ing are provided.
Theoretical Implications and Conclusions
This chapter sets the study results in context of the research ques-
tions 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
organizationalcomplexityvariablesonvariablesformiddlemanag-
ers practices, roles, and responsibilities in program and portfolio
management.Theoreticalimplicationsareelaboratedfromthis,and
thestudy’scontributionstoexistingtheoriesareprovided.Strength
andweaknessesofthestudyareprovided,aswellassuggestionsfor
futureresearch.Thereportfinishesbysettingtheresultsofthestudy
in a wider context and a vision for the future.
TheAppendicesprovidetheinterviewquestions,theglobalWeb-
based questionnaire, and some of the statistical summary tables of
the data analysis.
xiv