Modern Business Management: Managing Reality
Modern business management can only succeed if it has a full and timely understanding of what’s happening at the front lines of the organization.
In the last post of this modern business management blog series we looked at the importance of connecting strategy and execution and how to optimize effective communication between the top-level decision-makers and the front lines of project teams where the work is happening. However, that communication channel must be two-way—effective management also requires timely information to flow from project teams to leadership to facilitate decision-making with the best possible information. With numerous projects underway at any given time, and with each of those initiatives operating in a dynamic environment where performance is constantly shifting, the focus must be on ensuring only information relevant to decision-making is getting to leadership, and that the information has an appropriate context. This is the heart of “bottom-up” modern business management and has several elements:
- Standards for communication of information: Regardless of whether projects are being executed using agile, hybrid or waterfall techniques, the information provided must be consistent to allow for effective decision-making and comparison across multiple initiatives.
- Filters for what is communicated: Not every decision on every project requires leadership involvement and anything that doesn’t contribute to effective decision-making creates noise and reduces the ability to make the right decisions.
- Effective communication channels: Information from project teams must get to the right decision-makers with the right background and analysis within a timely manner so that decisions have the best possible chance of not just being the right ones, but also made in time to be effective.
Each of these elements requires an effective portfolio management function operating to maintain and enhance the modern business management environment. Let’s look at each of them in more detail to see how that works.
One of the most critical contributors to modern business management success is the ability to create standards for project assessment and decision-making that can be applied across all initiatives. With the focus on value attainment there cannot be noise created by different project execution approaches supplying different information or formats for communication. Portfolio management must create and manage standards to ensure not only that consistent performance information is provided for all projects, but also that the information is meaningful. This should drive the focus to value delivery—regardless of how the project is delivered, the intent is always to optimize value and cost of value, and that is the key factor in project decision-making.
The second and third elements, filters and communication channels, must be considered in combination. Portfolio management and the PMO must determine what information is going to be communicated and whom it is being communicated to. Project teams won’t have (and shouldn’t be expected to have) the full context of what needs to be communicated to whom. Instead they provide relevant information and allow portfolio management to determine whether to:
- Route the information to all leadership stakeholders as received if it is high level and important information that supports immediate decisions or educates stakeholders on vital project information.
- Route the information to specialist stakeholders as received if it is important information but only for a subset of stakeholders (financial data for example).
- Retain the information for internal analysis and reference if it educates and informs the portfolio management function’s ability to manage the delivery of strategy.
In addition to this routing, there also needs to be a “value add” function performed by portfolio management whereby the portfolio manager supplements project information with additional context and interpretation before passing it along. Only when this happens can portfolio management ensure the right leaders have the right information at the right time, to make the best possible decisions for the portfolio to optimize value delivery—the heart of modern business management.