In Step with Projects

In Pace with Progress

Measuring and Increasing Program Management Maturity

Back

Author: Michel Thiry     Source: PMR

For many years, organizational project management maturity models like OPM3 have worked on the assumption that, because portfolio management was placed at a higher hierarchical level in the organization, it required more maturity than program management. My own experience is that program management maturity requires more effort because it involves a deeper behavioural change and more fundamental structural change than portfolio or project management.


We must stop thinking of programs as big projects; the success of a program is measured through its ability to deliver business strategies. In today’s VUCA (Volatile, Uncertain, Complex and Ambiguous) world, strategies are continually realigned to fit an evolving context. The program management process must allow for continuous realignment or termination, if necessary. Therefore, programs are inherently agile; they deliver benefits in cycles or waves, where the program’s value is appraised continually. 


Organizations that adopt program management still rely too much on a project approach and should adopt a more agile perspective that includes change management and a formal decision management process. These are two of the fundamental elements of good program management.


The planning process of a project is essentially an uncertainty-reduction exercise aiming to reduce the ratio between facts and assumptions; it assumes a cause-effect relationship. In the planning process, data is gathered, and reserves are built to account for risks. Once the project plan is complete, it becomes the baseline of the execution process. Portfolio management is the ongoing allocation of resources to the most rewarding business initiatives; its practice is steeped in budget allocation and financial management. These two processes are generally quite mature because they are part of the fabric of the “modern” organization. Program Management Maturity is worth more attention. 


Barriers to Program Management Maturity

For many years, programs were thought to be bigger projects; today there is a consensus that programs have an added degree of complexity and cannot be predicted accurately from the start. 


The biggest hurdle in program management maturity is the assumption that there can be a set baseline from the start of the program, offering no leeway for adjustments along the road. The consequence of this approach is that costs and schedule typically end up in default and the program objectives cannot be achieved. Programs are benefits-driven, not time or cost-driven, so there should be a recognition by executives and senior managers that they must get more actively involved in the regular decision-making and cannot expect to baseline more than the next cycle. Programs need to offer leeway to adjust to unforeseen circumstances or changes in context in order to deliver a strategy. If they are too constrained, program managers can only deliver set results, not benefits.


A second hurdle is that many programs stop when the last component project is completed and there is no scope for transfer and integration activities. The program must include the transfer and integration of capabilities delivered by component projects into business as usual; this will ensure benefits sustainability.


Finally, programs, like projects, require dealing with uncertainty but also with ambiguity; ambiguity-reduction is very different from uncertainty-reduction in the sense that ambiguity is reduced through decision-making and decision management. Whereas a large number of alternatives increase ambiguity, a sound decision process will help reduce it. This requires sensible stakeholder management and governance as well as an iterative decision management process.


Program management maturity requires a capability to deal with both uncertainty and ambiguity, as well as possess a business and strategic perspective.


Program Management Maturity Model
Over the years, our organization, Valense Ltd., has developed a proven maturity model that is based on what we have called “Program Functions”.


Structure and Culture

Structure and culture are two essential and often neglected elements of program management maturity. If organizational structures are siloed and systems are bureaucratic, requiring additional time and resources to process decisions and creating obstacles to innovation and creativity, program management will not achieve its objectives. One of our partners, Olivier Lazar, calls this situation “organizational inertia”. The greater the inertia, the more time and resources are required to make decisions and the less responsive the organization is. 


Program management requires simple systems where decisions can be made by the right people in time to respond to an evolving context to achieve what business authors have called “Transient Competitive Advantage”. Structures should allow for strong horizontal networks that foster innovation and creativity by allowing cross-functional teams to consider diverse options and seek the best alternatives.


In terms of culture, blame should be avoided, risks allowed within reason, and a learning attitude encouraged. Program maturity also encourages knowledge sharing and a team approach over knowledge hoarding and individual competitiveness. These latter elements are part of the “modern” organization’s make-up and are difficult to get rid of. Typically, organizations and projects encourage competition and segregation. Program management maturity requires a simplification of systems and horizontal integration.


Strategic Alignment

One of the keys to successful programs is the delivery of strategic objectives and their contribution to a well-stated value proposition. In a mature organization, programs deliver strategic objectives which are measured based on critical success factors (CSF) that are defined as the benefits that need to be delivered by the program team. The program will end when benefits are sustainably delivered into the business.


The program plan is based on business case and stays flexible during the lifecycle as circumstances and therefore objectives may evolve. Finally, sponsors conduct an achievability analysis of the program based on financial capability, parameters and constraints, resource availability and expertise, and complexity issues to assess whether it can deliver its intended benefits and value.


Stakeholder Engagement

The program is based on a mix of strategic objectives and requirements of key stakeholders who are involved in program decisions on an ongoing basis. The program team uses active communication to inform, monitor and consult all stakeholders during the program.


The program manager and receiving organization’s representatives are both part of the governance board and actively participate in all decisions. Both positive and negative stakeholders are encouraged to voice their views and raise issues when required.


Benefits Management

The program business case contains a clear value proposition and justification for the investment based on the alignment to strategy and a full achievability analysis (see Strategic Alignment). 


Mature program organizations develop a benefits map that clearly links project outputs, program outcomes and benefits to the stated strategic objectives. This hierarchical diagram is also called Benefits Breakdown Structure (BBS) or Program WBS. A benefits register including CSFs and KPIs (Key Performance Indicators) is used during the course of the program to assess benefits realisation.


Realisation and sustainment of benefits are part of the program scope and ultimate success will be measured in the medium or long-term.


Governance

In mature organizations, governance consists of three elements: 
1. a clearly stated vision and mission for the program, 
2. a commitment to provide the program manager with the necessary resources and structures to achieve its objectives and 

3. a decision management process aimed at ensuring that the stated objectives and goals of the program are achieved. 


An executive sponsor will drive the governance board and engage other key members in all parts of the program decision management process. The receiving organization’s representative collaborates closely with the program manager to elicit stakeholder needs and integrate new capabilities. Value management is an integral part of the governance process aimed at achieving best value (ultimate benefits) for a range of business stakeholders.


The program manager is empowered to make change decisions and manage resources across the whole program irrelevant of their reporting area. The program team has responsibility for the successful execution of the program benefits, but the sponsor has final accountability.


Decision Management

Because the program is cyclic, it requires a tiered business case process before initial deployment approval and continued approval at each cycle. The Value Proposition, Program Mandate (Charter or Brief) and Program Management Plan are all developed with a business case approach, they are three levels to justify approval for the program to proceed further.


Most decision-literature and practice focuses on the making of the decision and neglects its implementation and the measurement of its results. Two of the key issues in decision management are the fact that decisions are made without making sure results are achieved and that authority is not in line with accountability.


Program reviews at the end of each cycle or wave should use CSFs and KPIs to measure benefits realization at agreed milestones as well as responsiveness to changes in an evolving context. Intermediate results are driving decisions on the program direction. Change decisions should be seen as a way to redirect the program in the context of an evolving environment.


The program manager should have full authority on the program, as long as they stay within scope and consult the program board regularly. 

Leading Change

Sensemaking is the time and activities allocated for change recipients to make sense of the change and express their concerns. In a mature organization, regular sensemaking activities must take place from formulation to closure to allow stakeholders to get engaged. These sensemaking activities will enable the program manager and receiving organization’s representatives to gain insight into the organizations’ readiness for change and will impact the pace and scope of the change and program cycles.


Transition is considered part of the scope of programs and outcomes and capabilities are integrated into business-as-usual as part of the program, which requires the program team to conduct change activities with operational personnel in collaboration with the business. In order to achieve this, the receiving organization’s representatives will be closely involved as part of the program team.

Life-Cycle Management
A program consists of a series of cycles that are paced according to the organization’s readiness for change and the predictability of the cycle’s outcomes. 
Since programs end when benefits are delivered into the business, there can be a number of cycles and the end cycles may require additional resources that can only be committed if the organization recognizes that programs are subjected to both uncertainty and ambiguity.


A typical cycle will be divided into three stages: 

1. Definition (Formulation and Preparation),
2. Deployment (Capability delivery, transition, integration-benefits realization, and benefits appraisal), and

3. Closure (Cycle closing and transition to next cycle).


Although the end of the program cannot be accurately predicted from the start, each cycle should allow for a relatively high level of predictability. At the launch of a program, sponsors will commit to a budgetary envelope, but for each new cycle they will allocate funding and resources at the beginning of the cycle. Therefore, at the end of each cycle, achievement is measured against predicted results and sponsor commitment is secured for the next cycle. 


Conclusions

Over the last twenty years, and especially in the last five years, I have witnessed a surge in program maturity, I have associated it to the rise of agile management and the realization by managers that strategies need to continually evolve and that decisions are subjected to constant realignment. As program maturity grows in organizations, they will be able to undertake more complex and volatile situations, like disaster recovery and socio-economic situations. Just to give a few examples: earthquakes, floods, refugee crises, wars, Brexit, and such. Currently, all these situations are managed in a knee-jerk reaction approach and leaders can seem utterly confused. Program management, because of its focus on benefits and cyclic approach, can probably offer workable solutions to manage those crises, but there is still a lot of work to do to get there.


I hope that the future will bring a uniformity among the program management standards and practice. I also hope that the practice of program management will include a more focused position on the management of value beyond the delivery of capabilities and, finally, the universal recognition of its cyclic agile nature as well as a consistent and organised decision management process focused on innovation and creativity, which are both essential in a VUCA environment. 

Follow Us

WECHAT

Scan the qr code to pay attention to our official WeChat.

Linkedin

Click on the left image to enter our linkedin page.

京公网安备 11010202007990号

京ICP证13028000号-3