The real power of a corporate vision is realized only when everyone in the organization clearly understands the vision and recognizes how everyone contributes to its success. Easier said than done. In most organizations, only a handful of people really understand the mission and how it translates to corporate objectives, and how the objectives realize priority projects.
It is equally important for everyone to know how the company is delivering on the priorities. Project managers tend to see only their own projects, and they are unsure how the project they are managing supports the organization’s overall success. Many project sponsors don’t take the time to understand the status of project activities and are often unable to recognize the early warning signs of a project in trouble. Senior executives seldom conduct a check-in on the business plan as a whole to ask questions like these: Is it still the right plan? Does it require adjustment? Do we need to shuffle priorities? Are we properly resourced to deliver the priorities? And most staffers on the front lines do not really understand how their day-to-day efforts support the mission.
The PMO plays a key role in connecting the dots and communicating key headlines throughout the organization so there is a global understanding of, and commitment to, the successful delivery of the business plan. The traditional PMO typically focuses on communicating individual project activities, only after projects have launched. It is right for the PMO to focus on project communications, as this is the hub of their existence. However, the PMO also has a responsibility to communicate the portfolio as it is being developed and while it is being executed; sharing this information across the enterprise enables a heightened level of understanding, which further promotes plan success.
Once project status communications have been established, the PMO should expand the communication methods, tools, and practices to extend beyond projects, so all stakeholders in the organization — regardless of position and role — understand what is important to the organization and recognize how they contribute to the business plan’s success. The PMO is the most logical facilitator of this effort, as it has the most intimate knowledge of business plan details. However, the PMO must collaborate with others across the enterprise to produce a meaningful communications plan.
Lets look at a few ways in which the PMO traditionally communicates across the enterprise–
Portfolio reporting is the most common method of informing organizations about the progress of project activities. Similar to creating the corporate communications plan, the portfolio report should be designed with multiple audience needs in mind. Since different business stakeholders require different levels of detail associated with project plan activities, it is critical to create a report that is flexible enough to meet everyone’s needs. It is equally important to create a reporting mechanism that is easy to produce and conveys the least amount of information necessary to communicate key headlines, activities, or risks associated with achieving project/portfolio success. Producing more information than necessary is likely to cause confusion among recipients. Too much information may be viewed as superfluous, and will be cumbersome to manage. Once again, keep the process simple to be successful.
Know your audience’s needs before designing a report. If you are introducing reports for the first time, be extra-careful not to overload your audience with unnecessary information. Identify which elements are the most critical for stakeholders to know about and start with straightforward delivery. There is no “right” method of portfolio reporting. It really does depend on organizational need and style. Be careful of fancy portfolio reporting tools. They may mesmerize with fancy bells and whistles, yet they may be more than your organization needs. Regardless of how long your PMO has existed, be careful not to create a report that contains too much information too soon. Otherwise, your audience will drown in details.
Whether you fully automate your reporting processes (through an enterprise reporting tool) or you manage the information through home-grown tools and manual processes, be certain to create reports that provide minimal oversight to produce the minimum information necessary. Also, categorize what type and level of information are required by each audience and compare their needs to PMO needs. Some information is for public consumption, while other components are appropriate for the PMO only.
Priority corporate initiatives typically include a complex and complicated list of large, cross-functional assignments. Keeping the project status reporting process simple allows the PMO and key stakeholders to maintain a good sense of project status without becoming bogged down in the details. The portfolio report should consist a series of portfolio views, presented to a broad audience as a full package of information. The package includes both summary and detailed information; recipients have the option to review the package in its entirety or view specific details pertinent to their needs. The PMO collects, reviews, and publishes key project headlines, which include active project activities and project risks. The PMO also maintains a system of exception reporting to focus attention on those projects that are off-target and to describe mitigation activities. Through exception reporting, the bulk of the project portfolio proceeds under the charge of its team and the PMO without consuming executive oversight time.
Project Status Reports
Project managers are required to submit weekly project status reports to the PMO. The status report is a simple, standard way of consistently communicating project activities and allows project managers the opportunity to alert project stakeholders to issues impeding project success. It is imperative to have a clear understanding at the start of each project, including knowing the outputs and schedule of the critical deliverables anticipated from each project. Having this baseline sets performance expectations for each initiative.
The simple traffic light reporting system works. Otherwise known as the “Red-Yellow-Green” system, the reporting codes are simple to define and easy to remember. But don’t be fooled – even when each status is clearly defined, project stakeholders often need to be reminded of their meaning. The PMO should generate gentle prompts regarding status definitions on a routine basis. Keep the definitions basic, so not to confuse interpretation.
Green = all project activities proceeding according to plan
Yellow = corrective action is being taken
Red = senior management attention is required
Understanding true project status is critically important to the PMO, yet it is not always easy to decipher. In spite of simple definitions and instructions to project managers, it is not always easy to identify true project status or why a project has changed status. One simple request may solve this problem. When a project is Yellow or Red, ask for the reason for the change. Ask that all summary updates start with: “The project is Yellow/Red because: ” The summary should also include the game plan for getting back on track.
Project managers must understand the importance of accurate status reporting, as the information they publish each week is one of the best ways for a PMO to monitor project activity and to assess project health. Project managers must record accurate status on their project status reports (PSR’s), as the Red/Yellow/Green coding is an extremely powerful tool that acts as a ‘call to action’ for executives. For example, if you submit a project status as Red, the project will be in the ‘spotlight’ with all the executives in the organization. By moving the status from Yellow to Red, you have sent them a signal that your project is in need of something – a decision, more resources, etc. Through the PMO status reporting process, your project gets the attention it deserves and the focus of the executives to take action to turn my project back to Green. As a Project Manager (PM), you don’t want to abuse this tool — you could be known as ‘the PM who cried wolf/Red too often,’ and future projects you are attached to might not get the attention they deserve to be successful.
The ease of determining the ‘real’ status of your project depends on the complexity of your project and the size of your project team. It is always good to take a commonsense approach when you determine the status of your project before pushing the ‘submit’ button on your PSR. Follow the simple Three Status Rule: If your project status is Yellow for three reporting periods, evaluate the movement on the issues that originally turned it from Green to Yellow. If there has been no movement, move the status to Red. Three reporting periods is a very long time in the life of a project.
This approach depends on creating a business culture that supports early problem identification so issues can be addressed in a timely fashion and “no news” truly is “good news.” This system is effective only when senior executives publicly support early, honest declaration of project derailment. Project managers will not practice this behavior if they are not supported in their actions. Disclosing early warning signs must be promoted as a positive behavior, because an early signal often allows early intervention — before the situation becomes dire. This is a cultural challenge for many organizations, as most companies maintain the traditional stance of equating public disclosure of derailment with failure, rather than regarding it as a proactive plea for help.
Time to shed your sheepskin.
Lisa A. DiTullio is the author of “Simple Solutions: How Enterprise Project Management Supported Harvard Pilgrim Health Care’s Journey from Near Collapse to #1. You can find Lisa’s book online at iUniverse, Barnes & Noble and Amazon.