Welcome back to your virtual office and the realities of restarting your transformation program. There is a good chance you are dividing your time between required administrative tasks related to your year-end closing activities and starting everything new for the new year. In 2021, you are also reassembling your project team while still juggling pandemic-related issues.
As busy as January may be, you need to make important program decisions early in the year and remember that risk management is needed 12 months a year. Do not let additional business demands that come with January cause problems for the remainder of the year.
Manage Program Decision-Making, or be Managed by the Program Decision Results
The Stafford Group revealed there could be 1,000 decisions for every $1M of program spend.* While this math seems overwhelming and a momentous barrier to action, the difference between action and failure is dependent on how you manage those decisions. The health and viability of a program can be tied to the program management of decisions and risks.
Decision and risk management are fundamental program management tasks — only if done properly. Let’s look at a few points to start tackling this challenge.
Audit Your Program Processes for Decisions and Risk Management
President Dwight D. Eisenhower said, “What’s important is seldom urgent, and what is urgent is seldom important.” Does this statement reflect your current program situation?
An audit could reveal your program is on the road to deliver transformation and value, or it could uncover problems in your program’s decision-making capability, process, and depth. For example, the results could show that the PMO is stuck in a ditch, spinning their wheels on decisions or driving in circles because there is no GPS when it comes to risk management.
To evaluate how well your team manages project decisions, answer these questions:
- How do you and your team look at all decisions and identified risk? What is the certainty all items are assessed properly, using the same criteria for priority and impact?
- Can you confidently say important decisions are properly managed as “important” and urgent items are rare because thousands of timely decisions are made correctly and at the appropriate level within the program?
- How will your team leaders make high-quality informed decisions, or provide appropriate depth of analysis to support high-quality decisions to be made three levels up?
- What is the inventory of the crucial decisions needed to be made during the course of the program?
- How will the steering committee be kept informed during the program, and what are the processes in place that allow them to make high-quality tough decisions?
For the purposes of this blog, we will look at the first item — how your team manages and processes risk.
Don’t Treat All Decisions the Same
Not all decisions are created equal, so they should not be treated equal. You and your team should not look at all decisions equally with the same weight and potential impact since gaps could exist with people, process, program, etc. To test how your team makes project decisions, try these two exercises:
- Consistency in Process — Select a small group of individuals in the organization (5-8) including you, selected PMO team members, and selected project managers from technical and functional workstreams. This “test group” will individually review and prioritize a list of 5-10 randomly known program decisions or scenarios for priority and impact. You could also select known decisions or scenarios from a similar program within the company. Collect the results and compare the different responses.
- Consistency in Accounting Completeness – Review risk registers (RAID log, KDD, etc.) for completeness of entry dates, due dates, priority, impact, and closed/completion status. Also look at the percentage of incomplete records.
The Consistency in Process exercise is a simple measurement system analysis, also known as an MSA by people familiar with Six Sigma quality improvement processes. You do not need to be a Six Sigma expert to conduct the assessment, you only need to be interested in improving risk management processes. The results of this test will reveal risk management differences within the program, processes, and team members in terms of identification, quantifying, and management of risk within decisions.
Consistency process tests measure your team member’s understanding of documented program criteria for priority and impact. Review and discuss the results and share ideas how to improve either your processes or the criteria for priority and impact.
Some readers might realize they have no documented criteria for risk priority or impact. This is a problem that needs to be corrected as soon as possible with creation of the criteria and training the program team in the criteria.
The second exercise could reveal a few items including:
- Team members do not understand the intent or purpose of the risk registers
- Availability data to inform the register entry process is missing, and
- The lack of completeness of risk registers is a program risk. The completeness or missing data in the risk registers will provide an immediate grade on the active management of these important project management processes.
The timing of these audit exercises varies. The consistency in process exercise can be conducted early in the formative stages of your program but can also be done at any time if there are concerns or symptoms of poor risk management.
Consistency in Accounting completeness reviews should be done weekly until performance meets your expectations (please have high expectations). I would advise that processes are put in place to encourage consistency or prevent inconsistency. Remember, the purpose of your program is to deliver transformation and value to your stakeholders. These recommendations are to aid you in your role in delivering transformation and value to your stakeholders.
Why This Matters
The Project Execution Advisory Services (PEAS) team at UpperEdge supports transformation programs of various scale and in diverse industries to identify and mitigate areas of value erosion. We leverage proprietary analytical tools and data-driven processes to identify gaps and issues — including risk management and decision-making concerns. Our goal is to strengthen PMO’s and support stakeholder’s realization of their end objectives.
There are many scenarios that lead to value erosion, but a common ingredient is when decisions and risks are not managed effectively.
*Jim Johnson of the Stafford Group made this statement in The SCRUM Fieldbook, A Master Class on Accelerating Performance, Gettng Results, and Defining the Future by J.J Sutherland.