Impact through professional project behaviour
Implement Consulting Group has conducted a comprehensive study of Danish organisations’ development capabilities and performance in the area of project and portfolio management. The study for 2016 provides a clear picture of what is important in order to achieve success with projects, and how successful project organisations ensure effective governance of the total project portfolio.
High impact and results for private and public organisations in Denmark are increasingly achieved through project work. This challenges the managerial control and strategic approach to project and portfolio management as well as the organisations’ skills in project management. This study highlights the common trends in project behaviour and concrete practices of high-performing project organisations as inspiration for how Danish organisations can succeed in achieving the desired outcomes for their projects and portfolios going forward.
Since Implement Consulting Group’s first study of Danish organisations’ development capabilities and performance within the area of project and portfolio management in 2011, there has been a steady development in maturity within the participating organisations’ project organisation. We can detect a general trend for project work to be included in the overall organisational structures, and this is helping to increase management attention, strategic decisions and overall governance of projects.
We have improved our development capability with more focus on our project management model, supported with guidelines for how to do business cases and realise benefits.
Respondent in the study
A clear link between strategy and project portfolio: Organisations that are particularly adept at achieving the desired value and impact for the project’s customers or users have a clear strategic direction and a clear link between the strategy and the project portfolio. They succeed in translating their overall strategic objectives to project objectives, and they follow up on their projects’ impact. High-performing project organisations have an executive management that sets priorities in the project portfolio, thus ensuring its strategic focus.
Projects on time, on budget and with great satisfaction: High-performing project organisations are first and foremost characterised by succeeding in achieving the desired impact of their projects. Also, they succeed in achieving their deliverables on time, within the agreed budget and with the agreed quality, satisfying their customers and project participants as a result. Successful projects require a determined focus on all four performance parameters.
Resource allocation must be aligned with the strategic priorities: High performers focus on their criteria for selection and prioritisation of projects, and they utilise financial, business/strategic and regulatory criteria in selecting projects. They meet regularly in resource allocation committees, and they make sure that the resources are allocated in the right projects in relation to the strategic priorities.
Clear mandate for the project manager and timely steering committee decisions: An important feature of high performers’ formula for successful and professional project execution is the delegation of a specific mandate for the project manager and support for timely steering committee decisions.
Application of project management models produces results: Organisations should have classic project management virtues in place, such as a common project management model and standardised project tools, but it is especially the application of these models and tools that is essential for effective project execution. Capability development time should primarily be used to create a common language and apply project skills in real practice.
Common standards and monitoring of results are more important than certification standards: Xtra high-performing organisations have equally as few certified project managers as the low-performing respondents. However, xtra high-performing organisations are more likely to use internally established standards for the implementation of their projects and to monitor the projects’ impact with high frequency.
The overall project maturity has increased: All of the participating organisations in the study have matured their execution of projects since the previous study in 2013. In particular, the low-performing organisations developed in a positive direction, indicating that project work has become a larger and more central component of the organisations’ way of working. Low performers have greatly improved their ability to close projects that do not contribute to the overall strategy of the organisation. They have a clearer division of roles and responsibilities in relation to the organisation of projects, and they have established a common language for project work. These are all key parameters for developing a high-performing project organisation.
The 2016 study received responses from 149 private and 50 public organisations. During the 5-year period from the first study in 2011, the second in 2013 and the latest study in 2016, we can see a significant confirmation of the key parameters that characterise a high-performing project organisation. These parameters include a focus on prioritisation, management of value and impact creation and the application of proven internal standards for executing projects.
At the beginning of the study, each respondent indicated the extent to which the organisation succeeds in realising the desired value and impact for the clients (internal and external) through their projects. Based on their responses, the respondents were divided into three categories; low performers, high performers and xtra high performers (see definition of groups in the top). The subsequent answers to the questions about the specific project structure and behaviour are considered in the context of the respondents’ category in order to identify what it is that characterises organisations that succeed with their projects, and what organisations that achieve less impact from their projects can do differently.
Achieving success with projects and portfolios is fundamentally about effectively realising the strategy with the right projects done in the right way. It sounds simple, but the method is far from simple. Achieving success requires first and foremost that the organisation is geared to handle project work and to develop the parameters that affect whether projects achieve the desired value and impact.
Implement Consulting Group has conducted the study on Danish organisations’ project maturity based on three development domains (see figure 1) in order to identify the critical parameters that are necessary in order to ensure high performance in projects. In other words, how do organisations handle the management of their projects, and how do the bestperforming organisations succeed with their projects and portfolios?
The three development domains demonstrate the link between strategy and portfolio and compliance with project execution. It is vital in project execution to create a direct link to the desired impact, also called performance. Performance in this context means the realisation of value and impact for clients, employees or users of the organisation’s services or products. The study is based on the division of the participating organisations into three categories (see definition of groups in the top):
This study will focus on how organisations that are high performers in their projects succeed and therefore differ from low performers within the development organisation’s three domains; strategy & portfolio, projects and performance.
Since 2011, Implement Consulting Group has, in co-operation with major international companies and public organisations, used the three development domains as a starting point for an analysis of their project structure and practices. Afterwards the results of their project practice are benchmarked against the results from the study of the project practice of high performers. This has given the organisations the opportunity to explore the exact parameters that will ensure greater impact for their projects and portfolio. Contact the authors for the preparation of a benchmark report and details of the opportunities for your organisation.
The classic performance parameters for project management consist of the basic parameters in the project triangle; time, budget and quality. The study’s high performers succeed to a significantly higher degree than low performers in achieving the objectives of the project on time, within budget and with the agreed quality. This not only contributes to realising the organisation’s strategy, it also has a positive impact on satisfaction among the participants in the project and on the (internal and external) clients’ satisfaction with the project. Of the three parameters, there is a correlation between the degree of quality in Execute and measure eect the project and the satisfaction with the project among clients and project participants. High performers are therefore not only successful on one parameter, but have the ability to link the project’s performance parameters. It is therefore interesting to follow their project behaviour in order to be inspired by their professional project practice.
When we analyse xtra high performers, the link is confirmed. Performance on the classic parameters of time, budget and quality supports a higher level of impact of the project. Graph 1 shows how high performers and xtra high performers distinguish themselves from low performers.
As in our previous studies, the results of the survey in 2016 confirm that high performers are particularly skillful at establishing a clear link between project objectives and the organisation’s strategic objectives (please refer to graph 2). They succeed in translating their overall strategic objectives to project objectives, and they follow up on the impact of their projects. High-performing project organisations have an executive management that sets priorities in the project portfolio, thus ensuring its strategic focus.
A total of 88% of high performers have a project portfolio that reflects the organisation’s strategy, while only 28% of low performers have a clear link between the overall strategic level and the project level in the project portfolio. The trend from the previous studies shows that both low performers and high performers have increasingly focused on the link between the strategy and the portfolio.
Half of the high performers have a clear link between the organisation’s KPIs, while only 10% of low performers succeed in establishing such a link. At the same time, low performers are poorer at monitoring the impact of ongoing projects. Only 10% of low performers perform regular monitoring, whereas half of high performers regularly monitor whether or not their projects create impact for the organisation. It is still a challenge for the majority of project organisations to close or reprioritise projects that do not contribute to their overall strategy. However, it is interesting that although most high performers in 2013 were very likely to close or lower the priority of projects that do not support their overall strategy, the 2016 study showed a decrease in the number of projects that were closed or given a lower priority among the high-performing organisations.
Clear strategic objectives, which are linked to the overall vision, have been the way forward. We have developed tools to assess whether projects match the portfolio in relation to the company’s vision.
There was an increase from 4% in 2013 to 19% in 2016 among low performers who have become better at monitoring their projects’ impact creation in relation to the overall strategy and closing or reprioritising projects that do not create the required impact. The proportion remains small, but the trend here suggests that some of the low-performing organisations have increased their maturity in relation to accepting the consequences of a project without clear strategic impact creation. The project is then closed or reprioritised, while it appears that many high-performing organisations do not encounter this strategic challenge to the same extent as previously.
The study clearly demonstrates that successful project organisations implement projects with a constant focus on the project’s desired impact. It is therefore essential that the portfolio management is able to incorporate this aspect into their work, and that it is made clear who in the organisation is responsible for monitoring the projects’ progress and impact creation. They should continually question whether the project is continuing to create impact. A new problem arises in this respect, as it can be difficult to close a project, even though it is not creating impact. This can happen, for example, when the project is a “favourite” of the project owner, or when many resources have already been invested in the project, which makes it more difficult to decide to terminate the project.
In order to mature the organisation to work professionally with projects and ensure that there is a link between the project portfolio and the strategy, it is essential to establish a project organisation that is responsible for the governance of projects and for the portfolio. In short, project governance provides the framework to define who decides what. A component of this is also the formulation and dissemination of basic rules, roles and responsibilities as well as conditions for the work with development initiatives on the project organisation’s various levels (e.g. programmes, projects, prioritisation and resource allocation committees).
The studies from 2013 to 2016 show a generally increased level of maturity in project governance for both low performers and high performers. In particular, the low performers achieved a noteworthy increase in relation to clear roles and responsibilities in projects (from 7% in 2013 to 45% in 2016). Similarly, there has been an increase from 26% in 2013 of low performers to 45% in 2016, which supports that there is a common language for projects in the organisation (please refer to graph 3).
The increased maturity in relation to a common language and clear roles and responsibilities is often due to a higher priority by the executive management. This is supported by the findings of the latest study, where all the participants show an increase in how many have an executive management that is involved in the prioritisation of the project portfolio.
A structured approach to portfolio management with a clear governance structure and training of project owners and steering committee members has enhanced our development capabilities.
Every organisation has its limitations with regard to how many projects it is possible to execute simultaneously. This means that the decisions of which projects should be initiated and which should wait or even be closed are critical for the success of the project organisation. As Implement Consulting Group’s framework tool for development organisations shows (please refer to figure 1), the key issues are to “prioritise the project portfolio” meaning to add, close and reprioritise projects that do not create impact.
High performers are precise in their criteria for selecting and prioritising projects (please refer to graph 4). About half of the high performers have defined criteria for prioritising, where this was an increase of 25% from 2013 in low performers’ ability to define clear criteria for how they select projects. This may be an indication that low performers’ increased maturity in relation to having clear roles and responsibilities in the projects and a clear common language also helps them to define clear criteria for project selection.
There was also an apparent increase from 2013 in the ability of high performers and xtra high performers to involve the executive management in prioritising and create committees for setting priorities. It is clear that high performers’ prioritising committees include the involvement of the executive management, and the setting of priorities thus becomes an active strategic decision on the organisation’s development initiatives and direction.
High performers largely continue to use financial (e.g. cost/benefit) and regulatory (legislative) criteria when prioritising their projects and are less likely to allow political criteria and organisational constraints to influence their priorities (please refer to graph 5). A particular point of interest in relation to the study of 2013 is the increase of 16% for high performers with regard to focusing on business factors (e.g. strategic match) for project selection. One reason for this increase may be the increased involvement of the executive management in the prioritisation efforts, which means that the projects are more closely linked with business requirements.
The portfolio overview has provided us with a greater degree of transparency in our decision-making process.
Prioritising one’s development initiatives is one thing, but allocating resources to the prioritised projects is something else entirely. Allocating resources requires an overview. It is important, therefore, to “gather a resource overview” of one’s development resources in order to be able to compare the prioritisation with the capacity and thus manage one’s portfolio actively.
The results from 2011 and 2013 were validated by the study in 2016, and they highlight that more than half of all high performers have a solid basis for allocating resources, because they allocate based on an overview of resource capacity and load (please refer to graph 6). A total of 62% of high performers have established a formal resource allocation committee to maintain an overview and monitor the prioritisation. This is an increase of 11% from the 2013 survey. The general trend towards increased project maturity among low performers is also apparent here. The study shows that 22% of low performers feel that their resources are allocated to projects in line with their strategy. This is quite an increase from 2013, when only 4% had this perception.
However, the 2016 study also verifies another thought-provoking result, because although high performers are better at establishing a resource overview, we can detect that while it was assessed in 2011 and 2013 that prioritisation was considered as more important than the allocation of resources for both high performers and low performers (more prioritisation committees than resource allocation committees in both groups), the result for 2016 is more equally distributed. This does not mean that they have become better at achieving a balance between prioritisation and allocation, but rather that there has been a decline in the prevalence of prioritisation efforts.
The correlation is clear, however, and it sounds trite, but no matter how good you are at prioritising your criteria, if the allocation of resources does not match the prioritisation, your efforts will be wasted. It is vital, therefore, to find a good balance between prioritisation and allocation that can also be translated into everyday practice. This calls for an elaboration of how skilful the respondents of the study are at managing the link between prioritisation and resource allocation, also known as active portfolio management.
We have established a comprehensive overview of the resources necessary to keep the operation running. The overview has provided us with a better understanding of how much resources are available for project work.
This is where reality (capacity) meets the vision (prioritisation). Many managers are overly optimistic, initiate numerous development initiatives and hope that the organisation will be able to find the appropriate balance.
When project managers and experts talk about “actively managing the project portfolio” (see figure 1), in practice this generally entails comparing the portfolio prioritisation with the available resources at appropriate intervals. This includes, as a minimum, a list of the projects and an overview of the progress (please refer to graph 7). High performers have a list of projects showing which projects they have initiated, while low performers are challenged in this respect. When it comes to the overview of progress within the projects, the difference is the same, and more than 2/3 of high performers have an overview of the project progress.
When we look at the balance between the number of projects and the resources allocated to the projects, only 6% of low performers considered that there is balance. This figure is about six times greater among high performers (42%). However, this is not an impressive percentage, and it indicates that one of the biggest challenges facing high-performing Danish project organisations lies in finding the balance between prioritisation and the capacity allocated to the development initiatives. In short: High-performing project organisations are in control of their portfolio of projects, but they are nevertheless challenged to prioritise the projects in relation to the capacity of the organisation and to manage the portfolio actively.
However, in their active portfolio management, high performers are increasingly capable of linking the strategy and the portfolio (please refer to graph 2). High performers have a clear link between the strategy and the projects’ KPIs, and the impact of the project is monitored frequently. The result is astonishing: In 88% of cases, high performers have succeeded with a portfolio that reflects the strategy. This would suggest that the portfolio overview has an impact on executives’ assessment of the projects and thus on the prioritisation.
We have achieved an effect with the implementation of a prioritised portfolio overview. The overview is used actively by the portfolio management to obtain a balance between development initiatives and operations and to handle challenges concerning e.g. the use of resources.
Strategy and portfolio management determines which development initiatives the management chooses to initiate in the project execution process. Excellent project execution is not simple, but it is evident that the classical project approach and virtues make a difference. Excellent project execution includes, among other things, “diffusion of the project management model” (see figure 1), which defines the framework for project execution. The formulation of a project management model includes different phases for the project work. Each phase ends with a “go/no go” decision meeting for the project’s continued progression. These decision-making meetings have a strong link to the roles and responsibilities that are defined in the project governance. For each phase transition, there should be a well-defined and common accepted foundation for decision-making, such as a project charter or similar.
The survey shows a trend within project execution. In both 2013 and 2016, a crucial parameter for achieving impact with projects was a strong mandate to the project manager and timely decision-making in the steering committees. In order to be successful, the project manager must be given a real mandate to execute the project within the agreed project management model. This is the situation for as many as 73% of high performers, and it therefore provides a basis for clear roles and responsibilities throughout the project organisation (please refer to graph 8). At the same time, high performers have steering committees that are able to take on responsibility and make timely decisions that help the project to progress. This creates momentum in the projects and provides greater likelihood that the projects will be delivered on time.
We have achieved more flow in the decision-making process. This has provided clearer resource prioritisation and faster decision-making, thereby increasing the speed of project execution.
The next step in the project execution domain is to “choose specific project management tools” (see figure 1). In this phase, tools are developed for among other things, project planning, execution and monitoring as well as processes for the formulation of the project’s baseline, change management and reporting.
High performers are better at the classic project approach and virtues, such as having a well-documented project management model and standardised tools for project work, because they use them more frequently. More than half of the high performers use the internal standards actively. However, we can detect that the number for low performers (please refer to graph 9) has increased significantly since 2013. In other words, it is the combination of having project management models and tools available as well as making use of them that form the basis for project execution with impact. The study also shows that low performers largely employ standardised tools and project management models, but they do not achieve the same impact from them. This indicates that if a common language and framework that support the tools and the models have not been established, it will not be as effective. By using tools, standards and project management models based on a “minimalist but militarist approach”, a high degree of usage is supported.
We have been successful in defining principles and a project management model that applies to everyone working with development in the organisation.
A key ingredient for achieving success with project execution is that the organisation has a “common language and competences” (see figure 1). This means that there is shared knowledge about the application of the internal project management model and standards in the organisation. In reality, this is a challenge that should be taken extremely seriously, as behavioural changes for an entire organisation are not an easy task. Efforts to establish a common language therefore require initiatives such as involvement, workshops, networking meetings and skills development, such as education, on-the-job training and certification in project management standards such as PRINCE2®, PMI® or IPMA®. These efforts should therefore be focused to support a transformation of the organisation’s project culture to become more professional.
High-performing project organisations are distinguished in more than half of all cases by uniting around a common language for their development practices (please refer to graph 10). The common language in project and portfolio management consists of the project governance foundation, clear roles and responsibilities, a project management model and standardised tools. As in the 2013 study, it is evident that all three groups have roughly equal numbers of certified project managers. However, it appears that the impact of projects is achieved by focusing on the project organisation’s behaviour and competency development on-the-job. A total of 47% of high performers focus on the daily practice, and they are not necessarily certified in project management. We therefore still stand by the opinion that certification contributes to a documentation of individual competence, whereas it produces a higher organisational impact to educate on-the-job and ensure competence development generally based on the common language, where you rely on simple methods and fixed standards for professional project execution in one’s own organisation.
Looking ahead, we need to further strengthen our project managers’ skills and increase our ability to implement the projects in operation.
When Implement Consulting Group’s framework for professional project organisations states “execute and measure the impact” (see figure 1), it is referring to organisations’ capacity to take action and succeed in making their strategic intentions happen in reality. This is where the best performers differ significantly by creating high value for their clients, users and employees through their development initiatives. The value is reflected in their ability to navigate their projects to impact, creating momentum among the execution forces and using the organisation’s energy constructively. All this to adapt to a dynamic reality in which we are constantly getting smarter.
We have made it simple by focusing on conducting short projects that focus on the benefits.
High performers are adept at realising the desired value and impact for their clients (internal and external). They do this specifically by comparing an overview of the progress on the projects with regular monitoring of the business impact (please refer to graph 11). It is important to find the time to evaluate and adapt the plan to reality, collecting experiences and using them going forward. High performers systematically gather experiences and learning from implemented projects. The vital aspect is to create a project culture that will share lessons learned and recognise the importance of monitoring the impact. Understanding that being a little flexible with regard to the deliverables can create more impact over time is essential.
The recipe for being able to execute projects to achieve high impact can be seen in the cross-comparison of xtra high performers in graph 11. Creating an overview of the projects’ progression (this increased by 21% for high performers in 2016), and combining this with continuous monitoring of the impact of the projects while sharing lessons learned seems to be the key to generating high-performing project organisations.
The final discipline in Implement Consulting Group’s framework for professional project organisations concerns “supporting the project organisation”. This implies project support and continuous development of the organisation’s project practice from portfolio management to programme and project management. This practice is often performed by a portfolio management office or similar staff, where tasks are carried out that relate to the active management of the portfolio and the reporting flows that are necessary in this regard. The tasks assigned to the portfolio management offices vary depending on the level of maturity, but they usually include updating the progress overview for prioritisation, development of standard project tools and training of project managers and steering committee members.
High performers are more likely to use an organisational support function for projects and portfolios (e.g. a portfolio management office) than low performers (please refer to graph 12). This provides a spin-off in relation to making the organisation use the internal project management standards as it is often the task of the portfolio management office to facilitate this process. The difference is striking when we consider xtra high performers. A total of 73% of the group use a support function and succeed better than the others.
The difference between high performers and low performers has been reduced in relation to the establishment of a portfolio management office. The characteristic feature among high performers, therefore, is not only that they have the office and the support processes in place, but that they utilise the resources to actively monitor the impact of projects, to support and implement internal project management standards and to drive prioritisation and resource allocation for projects.
We have ensured robust cooperation between functional PMOs. Implementation of common guidelines for management of projects across the enterprise has been key.
The study shares insights into what it takes to become excellent at generating impact from development initiatives in Danish organisations. It requires alignment between strategy, portfolio and project execution. This can be facilitated by establishing project governance, running prioritisation committees at regular intervals and creating a strong mandate for the project organisation.
Having read this report – you might wonder – how is my organisation doing? Implement Consulting Group uses the framework in this study to analyse specific organisations. It provides an opportunity to benchmark your organisation against similar organisations. We have developed a light version with six key questions you can use for an initial “self-assessment”. The six questions will hopefully inspire you in terms of which areas could need more attention, e.g. in relation to resource allocation, project management standards and training.
Implement Consulting Group’s framework for professional project organisations covers all aspects of working with strategy, portfolios and projects and is thus more detailed. This miniature self-evaluation can provide an indication of where in the framework you should focus. It is a good start in itself. Many aspects of the framework are interconnected and by focusing on one or two aspects, a dialogue on the next step comes easy. Implement Consulting Group has worked with many organisations, where the framework is an element which, together with qualitative data such as interviews and status reports for projects in the portfolio, all contribute to a common picture of what we need to do more of to leverage professional project behaviour. Benchmarking can be of assistance here in providing clarity in the organisation about what you want to do in order to achieve higher impact from your projects.
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