Episode 269: Portfolio Management and the Strategic Project Management Office (SPMO) (Free)

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John Donohoe (http://de.linkedin.com/pub/john-donohoe/3/545/24b) is the Director of Project Management at Star Alliance, and portfolio management is his passion.

He says that many corporations don’t fail when they are developing a strategic plan but instead, they fail in the execution of that plan. This is basically because executing strategy consists of two main components, which are doing the right projects and doing projects right. Once you have this down, then effective portfolio management enables companies to do the right projects by ensuring that all projects are aligned to the overall strategy.

And this again means that Strategic PMOs (SPMOs) are quite well  positioned to do more than just ensuring that projects are done right. Instead they will also be able to maximize your corporate portfolio as well as provide the bridge between project demand and resource supply.

This interview with John not only discusses this in detail, but we’ll also look at some best practices in regards to managing your project portfolio and we’ll talk about what we all can do to ensure strategic alignment of our projects in an organization where there are no PMOs that support us.

John Donohoe has 30-plus years of experience developing IT systems in various roles.  He has lived in the US, Canada, Belgium, Tokyo and for more than 20 years has called Frankfurt, Germany home. As the Director of the Star Alliance PMO, he successfully implemented an Agile approach to complement the waterfall project management methodology.  Additionally he refreshed Star Alliance’s stage-gate and project governance processes. For the past two years his focus and passion has been helping Star Alliance better execute its strategy via portfolio management.  John takes a holistic view of executing strategy with the PMO as a key partner in the overall process.

John Donohoe will be speaking on the topic of the SPMO and on April 28th at the 2014 Project Zone Congress in Frankfurt Germany. So if you are listening to this interview before then, you can find out more at http://projectzonecongress.com/ [Update: the template website is no longer available, so we removed the link]

Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only. 

Podcast Introduction

Cornelius Fichtner: Hello and welcome to Episode # 269. This is the Project Management Podcast™ at www.project-management-podcast.com and I am Cornelius Fichtner. Thank you for joining us today.

John Donohoe is the Director of Project Management at Star Alliance and portfolio management is his passion. He says that many corporations don’t fail when they are developing a strategic plan but instead they fail under the execution of that plan. This is basically because executing strategy consists of two main components which are doing the right projects and doing projects right.

Once you have this down then effective portfolio management enables companies to do the right projects by ensuring that all projects are aligned to the overall strategy and this again means that strategic PMOs, SPMOs, are quite well positioned to do more than just ensuring that projects are done right. Instead, they will also be able to maximize your corporate portfolio, as well as provide the bridge between project demand and resource supply.

This interview with John not only discusses this in detail but will also look at some best practices in regards to managing your project portfolio. And we'll talk about what you and I can do to ensure project alignment to the strategy in an organization where there are no PMOs that support us.

And here's a little bit more about our interview guest today. John Donohoe has 30+ years of experience developing IT systems in various roles. He has lived in the US, Canada, Belgium, Tokyo and for more than 20 years has called Frankfurt, Germany his home.

As the Director of the Star Alliance PMO, he successfully implemented an Agile approach to complement the Waterfall project management methodology. Additionally, he refreshed Star Alliance's stage-gate and project governance processes. For the past 2 years, his focus and passion has been helping Star Alliance better execute strategy via portfolio management.

John takes a holistic view of executing strategy with the PMO as a key partner in the overall process. And by the way, John Donohoe will be speaking on the topic of the SPMO on April 28th at the 2014 Project Zone Congress in Frankfurt, Germany. You can learn more at www.projectzonecongress.com [Update: the website is no longer available, so we removed the link] .

And now, when was the last time that you looked at your company's strategic plan? Enjoy the interview.

Podcast Interview

Female voice: The Project Management Podcast’s feature Interview: Today with John Donohoe, portfolio management specialist and public speaker.

Cornelius Fichtner: Hello John and welcome to The Project Management Podcast™!

John Donohoe: Hello, Cornelius! Glad to be here.

Cornelius Fichtner: So you will be speaking at the Project Zone Congress on executing strategy, portfolio management and the strategic project management office, the SPMO. So what problems does the SPMO try to fix?

John Donohoe: Good! Thank you very much, Cornelius. First of all, I'm the Director of the Star Alliance Project Management Office and we're looking to mature our methodology.

So what we're doing right now is we're implementing portfolio management. When I did some research and particularly when I look at Star Alliance in particular, I'm looking at some of the problems that our management face particularly looking at, we have a strategy but being able to execute it is really a challenge. And so, there seems to be a bit of a disconnect I would say between the strategy formulation and the execution of the strategy.

And so when I look at some of the reporting particularly from PMI, I did a survey in 2013 with the economist, what they found was fairly surprising is that 56% of all of the strategic initiatives are successful. So that leaves a big gap between those really important initiatives and not being successful at them.

Cornelius Fichtner: Alright! Let's take a step back here and let's take a look at the other acronyms that people are likely familiar with. There's the PMO. There is the EPMO and now the SPMO. Can you give us on a high level maybe, a bit of understanding of what the differences are between those three.

John Donohoe: Yeah, happy to. First of all, if you actually go and Google project management office is you'll find that, or Wikipedia I would say, there are three types really. One is a departmental. The other one is an enterprise which is the EPMO and the other one is really a special purpose.

And so really when I talk about, when I use the S in front of that, the strategic, what I'm looking at is really the scope of the project management office. And so if I look at particularly an enterprise PMO, an EPMO, that tells me like the PMO we have here which is supporting basically all the business units across the enterprise. They may do that by providing project managers methodology, tools and the like, to really support the enterprise in their projects.

But what I'm looking at and for me, that's really what I call doing the projects the right way and doing them the most effective and efficient way possible and really maximizing the benefits realization. When I think about strategic project management office, it's really looking at the other side. It's really doing the right projects and the best way that I've seen is via portfolio management.

So when I say about SPMO, it's yes, doing projects the right way but it's also looking at the strategic plan and making sure that we're supporting and providing a framework I would say for doing the right projects and doing right projects for me is really what portfolio management is all about. So I may refer to executing strategy throughout this podcast.

When you look at what the definition of executing strategy is, it's really spending money on programs and projects in order to advance your strategic plan. When I talk about strategic project management office, it's really becoming more deeply involved in the planning of the projects, picking the right projects and making sure that we're maximizing value. We have a balance across the number of different dimensions that we have, the things are strategically aligned and last but not least, the second half or the big piece of portfolio management is making sure that we have the resources in place to be able to execute it.

Particularly I know in our organization as well as some other organizations, this is at least particularly where we can do a much better job and for me at least, portfolio management is a really great way for us to make sure that we're doing not too many things I would say and that we're focused on delivering the projects and what I call throughput. It's getting those projects done in a timely manner and not really overloading the system and having people work on too many things because I think is to have well bettered out particularly theory about, that just slows everything down. We're focused on really working with particularly the governance, those people who are formulating a strategy and deciding on which projects and really supporting them just providing information to make intelligent decisions. Portfolio management for us is the best way to go about that.

Cornelius Fichtner: So if I see this right then, it’s more about the services that the PMO provides that makes it SPMO. So PMOs normally, they are supportive, directive and you're saying, the SPMO offers a service of strategy and helps the strategy to be implemented in your organization. It doesn’t really matter where you are located organizationally.

John Donohoe: Yeah absolutely. The fact is at least from my understanding, there's a lot of different definitions of what a project management office is and what they support and they come in all shapes, sizes and flavors. But hopefully I think every successful PMO are really aligned with the organization, culture, strategy and direction and be able to support that. And so, yeah, absolutely. What I'm looking is it's an extended role backing us up from not just executing the projects, but backing us up into helping to support the decisions on the projects and programs that we work on.

Cornelius Fichtner: You've mentioned portfolio management just a moment ago. How does portfolio management fit in to the SPMO?

Above are the first few pages of the transcript. The complete PDF transcript is available to Premium subscribers only.